Virtual Credit Cards: Your key to payment efficiency

As accounts payable (AP) departments try to create more streamlined and efficient functions, they are focused on:

BT documentation & messaging 40

Converting from paper to electronic payments: 53%

BT documentation & messaging 60

Finding more efficient ways to handle existing tasks: 62%

BT legal 107

Improving connectivity and collaboration with their vendors: 30%

BT currency & payments 103

Increasing the use of virtual credit card: 33%

What is a Virtual Card?

A virtual card is a credit card or debit card that contains the following account details needed for payment:

  • Account number
  • Expiration date and CVV

Virtual cards, sometimes referred to as VCards, eliminate the need to safeguard a physical card. These cards also provide needed efficiency gains for cardholders and vendors making and receiving digital payments

Cards – both physical and virtual – are ubiquitous payment types that businesses and consumers are comfortable accepting. Networks like Visa and Mastercard are well-known and trusted payment networks that transmit card payments, and adopting a virtual card should make inroads to your supplier community easier and more straightforward.

Virtual Card 101 EBO Paymode X Payment Types

 4 Top Benefits of Virtual Cards

Virtual cards are gaining momentum — and with good reason. They provide additional security and controls that aren’t available with payment types like check and ACH, and are easy to use. Plus, vendors love the convenience, speed, and ease of using virtual cards, as well as the detailed remittance data that certain virtual cards provide.

Here are just four of the ways your AP function — and your vendors — benefit from adopting virtual card.

1.  Security and control

Virtual cards with 16-digit, randomly generated card numbers, expiration dates, and CVVs can only be used once. That limits fraud risk significantly if your data is breached.

Virtual cards also use built-in security and controls for card networks, which are usually very robust. Issuing virtual cards for a specific amount means no one can pretend to be your vendor and get their hands on cash that isn't theirs.

Security And Control
Efficiency And Cost Savings

2.     Efficiency and cost savings

As a digital payment, virtual credit cards cost less than checks, period, with none of the risk of lost checks and stopped payments. Straight-through remittance delivery helps vendors automate cash application, too, strengthening your partnerships. They also typically receive payments faster, too, and they'll never say no to that. 

Adding virtual cards to a broader payment mix can improve AP efficiency even further. As part of an integrated payments solution like Paymode-X that includes all payment types and connects to your ERP, your process becomes much more efficient and much less troublesome. 

3.     Rebate generation and working capital optimization

In addition to being efficient, virtual cards allow you to earn cash back on AP spend. Your organization can optimize working capital by providing payment terms flexibility, plus the ability to pay earlier while holding on to cash. With integrated reporting and analytics, you can demonstrate your organization's ROI with rebates earned, and make it easy to do so.

Historically, AP has been viewed as a drain on a business's budget. Virtual cards help make AP a revenue driver, elevating your strategic value. 

Rebate Generation
Increase Vendor Satisfaction

4.     Increase vendor satisfaction

Virtual cards streamline AP, reduce fraud risk and costs, and a lot more. They also make your vendors happy, which is a bigger win than you might first suspect. Efficient credit card payments mean your vendors get paid faster and email notifications can prod vendors to process payments before expiration dates. The best solutions on the market today also offer value-added AR tools, including the ability to track payments and receive robust remittance detail.

Having that level of detail available reduces inquiry to your AP team, which saves time and resources for you and your vendors. That benefits both parties and makes for a better partnership. 

Why Paymode-X?

Virtual cards streamline the AP process and reduce both fraud and costs for AP departments, but this payment method also benefits your vendors and their AR function.

A vendor enrollment program accelerates adoption

Your organization may be concerned that your vendors won’t be receptive to adopting the cards, perhaps due to a poor past experience with credit card payments or general resistance to change. Educating vendors on the value of virtual cards will drive increased acceptance.

To accelerate adoption, work with a payments solution provider that is committed to your vendor onboarding effort. For those vendors that are not currently accepting cards, customized vendor enrollment campaigns designed to meet your payables optimization goals will be critical.

If you have implemented a solution that offers virtual card and ACH, your solution partner can offer ACH to vendors who are unable to accept virtual card to ensure you maximize overall payment automation.

Bolster your payment strategy with Paymode-X virtual card solutions

Virtual card is a valuable payment method to have in your mix, as we've outlined, but it's just one of a number of payment types you'll utilize. Premium and traditional ACH, check and sometimes wire payments are also key.

To maximize savings and streamline your AP processes, your organization needs a truly integrated payables solution. The flexibility and versatility of a balanced payment strategy can help you meet business continuity challenges head on, as well as evolve and grow as needed.

With 425,000+ businesses using the Paymode-X network, using the solution can drive significant adoption of virtual card and ACH payments from your vendor community, saving money and earning rebates for your organization. With Paymode-X, you'll gain efficiency, bolster security, and realize better AP outcomes than you will with other electronic payment solutions.  


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