Virtual credit cards for business: control and secure corporate spend

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In the world of business, checks and cash are simply inefficient. They’ve been replaced by more convenient digital payment methods, which offer several advantages for businesses both large and small.

Virtual cards, for example, simplify expense management across remote teams and give you greater control over where your resources go.

Read on to learn how virtual cards can help scale your business.


What are virtual credit cards for business?

A virtual credit card is no different from a regular credit card—except that you don’t have a physical copy of it. A virtual card has all of the same card details and identification information as a physical card, including the:

  • Cardholder’s name
  • Credit card number
  • Billing address
  • CVV
  • Expiration date


When making an online purchase, it functions identically to a Visa, Mastercard, or any other physical card. This ease of use, among other factors, has quickly led virtual cards to become one of the most cost-efficient, convenient, and secure e-payment methods, particularly for online transactions. A study by Accenture discovered that:


“Virtual card spend for purchasing activities is projected to grow at 19 percent (from $207 Bn to $251 Bn) annually" 


Virtual cards can be digitally created on-demand and then used on a one-off basis, to settle a specific transaction issued for a set dollar amount, or can be issued for recurring payments. In the latter case, the user could continue to use the card until they hit the set monthly business spend limit.

Virtual and physical card approvals typically follow an identical process. The only difference tends to be the company offering the card program (as well as the underwriting requirements).


What are the benefits of virtual cards for business?

There are a variety of reasons why more companies than ever have turned to virtual e-payment solutions over traditional business credit cards.

Check them out:

Optimized accounts payable

The goal of any AP department is to optimize and streamline its accounting workflows.

Virtual credit cards eliminate the slow and error-prone manual accounting processes associated with traditional payment methods like ACH payments or wire transfers. You shouldn’t have to provide bank details, or manually process invoices and enter them into your AP or ERP software.

Payment settlement happens immediately instead of taking days, giving you and your finance team real-time visibility on your cash flow data, and allowing you to make better-informed budget decisions going forward. Furthermore, the fast settlement helps fortify the relationship with vendors or suppliers. Put transaction limits in place to avoid surprise fees or surcharges and simplify vendor management.

With the right card that offers integrated accounting tools, you can automate 80% of manual data entry and reconciliation right out of the box. You can create rules that map transactions to your general ledger and a chart of accounts to automate the entire workflow.

Improved security 

Although virtual cards are still susceptible to fraud, they provide greater security than a traditional card. Why? There are several reasons:

  • They can’t be physically stolen – Since the card isn’t physical, it’s not subject to theft or loss.
  • The personal information isn’t stored – Vendors and retailers tend to store card information from physical payments, which is then potentially subject to being exploited or exposed via a hack or data breach.
  • One-time use and limits – When virtual credit cards are issued for single-time use, they are more like prepaid corporate cards or single-use cards, as they have a predetermined dollar amount and are tied to a specific invoice. The set spending limits can help prevent an overcharge even if a malicious actor did somehow get control of the unique identifier. Further, you can set an auto-lock so the card automatically becomes unusable once the maximum amount has been spent.
  • Virtual credit cards are easy to cancel – You can instantly freeze or delete a virtual card if you fear that the information has been compromised. Once deleted, simply request a new card to be generated. In contrast, a physical card can take several days to cancel and reissue.  

Although they’re not free from risk—no digital payment method is—a virtual card can greatly help reduce your overall risk profile.

Simplified vendor management

While the process for generating a virtual credit card for business may vary among issuers, it tends to be relatively simple. This makes it easy to quickly add a virtual card (or several) to your existing accounts.

If you’re using a modern card provider, you should be able to issue virtual credit cards to your employees in just a few clicks. Employees simply make the request, stipulate the money limit, the time limit, and whether they want it to be locked to an exclusive merchant, vendor, or account.  

Issue as many cards as you need to track different online payments and vendors. Having vendor payments on virtual cards means you can more easily track vendors being used across your team (avoiding subscription creep) and how much you’re spending per vendor.

Some virtual credit cards for business providers offer tools that let you track total spend across all vendors, when bills are due, and how costs are trending in real-time. The best tools even simplify SaaS subscription management, offering automated insights on redundant subscriptions, rising costs, and new partner discounts. No need to juggle different AP software and scattered invoices that make it challenging to get a complete view of your spend.

Cash back and savings

You might not consider accounts payable to be a revenue-generating accounting activity, however, virtual credit cards make it simple to get money back via cashback programs. Unlike other cards that offer points, cash rebates empower your business to instantly earn back money each month.

Ramp, for instance, has a 1.5% cash back on every single expense. On top of that, our virtual credit cards for business are built to help you improve spend management and find immediate savings. For a large company, that could mean tens of thousands of dollars saved every month (and for small businesses, the margin differences can be even more critical). Companies that use Ramp save up to $600k annually on cashback alone.

Most vendors accept credit cards for transactions up to $50k. Some major vendors like Plaid & Microsoft accept credit cards for transactions up to $250k.


Virtual credit cards for business and credit score

The term “virtual credit card” can be confusing for some. A virtual card doesn’t have to replace any credit cards that you currently own. It’s merely an added layer of protection.

So, if you’re wondering, “Does a business credit card affect personal credit?” The answer is—it depends.


If you have a corporate credit card separate from your personal bank account, then this virtual credit card won’t affect your credit score. In fact, it can even help you out since it provides greater protection against fraudulent charges that would otherwise harm your personal credit.


Ramp: the best virtual card for your business 

Virtual credit card adoption is skyrocketing—and for good reason. Virtual cards offer heightened security, full integration with your accounting system, greater flexibility, and cash back rebates. If you’re curious for more information on how virtual cards can help scale your business, check out our e-book, Why virtual cards are the future of B2B payments.

Few can compare to Ramp’s virtual credit card for business and spend management automation. Ramp’s integrated financial services offer a variety of ways to manage and protect every transaction; saving you money every step of the way.

Contact us today and find out how Ramp can partner with your business.

Learn how Ramp strengthens your finances.

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FAQ

What is a virtual business credit card?

A virtual credit card allows businesses to gain complete control and visibility over company spend. Finance teams can track, limit, and monitor expenses, ultimately uncovering more versatile and safer payment options for the business.

Can I use a virtual credit card in-store?

Depending on the payment system the retailer is using, you may be able to use a virtual credit card in-store. Some stores will allow you to pay over the phone or enter your card information into their payment processor and if you store the card information in your Apple wallet, you may simply be able to hold your phone near the card reader to pay with a virtual card. Bear in mind that this is at the store owner’s discretion, and is often dependent on the existing relationship they have with the customer.

Can I use a virtual credit card at an ATM?

Virtual credit cards cannot be used to withdraw cash or access account information at a cash point.

More resources

Best business credit cards for startups: automation is key
Create an expense policy in under 3 minutes
How to create a balance sheet: A step-by-step guide
A small business guide to business credit cards