How To Incorporate Virtual Cards Into Your Business
Like any credit card, virtual cards make for a very convenient and easy-to-use method of payment. However, virtual cards offer a lot more than your average plastic. That’s why businesses have started to look into this new technology as an opportunity to help them increase efficiency and ultimately save money.
However, such decisions are not made lightly. Businesses should take the time to review all the different kinds of online expenses, indirect expenses, and new kinds of expenses from online platforms that they currently face. From there, they can start to look at the ways they can leverage new payment options.
Virtual cards offer a number of advantages over the alternatives, and so are quite versatile. This means that there are plenty of uses cases where their strengths can come into play and change the way your business approaches payments for the better.
Use Cases for Virtual Cards
Across industries and verticals, virtual cards are starting to show their value. After all, essentially anywhere online payments are concerned, they can be used – and often for the better.
But the more interesting utilizations of virtual cards stem from the way they improve upon current payment methods.
Taking both single-use and multi-use varieties in mind, here are some examples of how virtual cards are being used in corporate settings:
These days, businesses are heavily reliant on all kinds of software to keep things running. More often than not, these kinds of digital platforms require a subscription - recurring payments, most often on a monthly or yearly basis.
The Covid-19 pandemic only intensified the move towards Cloud services. Companies saw an increased need for new collaboration tools and software to help connect the decentralized workforce. Meanwhile, the shift from on-premises licensed software to subscription-based models also played into this.
Finally, companies are feeling the urge to move from legacy infrastructure operating models to more digital flexible solutions.
Our research found that 32% of companies using virtual cards were doing so to streamline the process associated with software spending in the form of licenses, apps, domains and more .
This is possible as virtual cards can pay software licenses yearly with a one-shot payment or incrementally with a monthly fee charged on the multi-use card.
Virtual cards are beginning to find their way into the arsenal of marketing agencies and in-house marketing teams. They offer a couple of different benefits that help them not only to pay more efficiently, but also have a better grip on data.
On the surface, there is an obvious use case for virtual cards in marketing when it comes to paying for ads and digital goods and services like stock photos, videos, reels, music, etc.
With digital advertising now making up the majority of many marketing budgets, a digital payment solution is needed. Traditional payment methods are not the most ideal solution to the pay per performance model that digital marketing platforms often use.
Multi-use virtual cards fit the bill in this case though, as they can be billed continuously (and frequently) as soon as certain thresholds are reached without the need for payment confirmation or any further interaction.
When it comes to reporting, the data-driven clarity provided by virtual cards enable better monitoring. This makes budgeting and spend overview much easier to achieve, even at scale.
Best of all, even without monitoring, virtual cards provide the relief of knowing that the budget allocated to the campaign can never been overspent.
Online Marketplace Purchases
Online marketplaces like Amazon are popular for a reason. They provide a whole range of different products across different categories, which is why they are favored by consumers and businesses alike for the odd purchase.
In fact, we found that 31% of businesses used virtual cards to buy goods from online stores . This makes sense, as these smaller purchases would often be difficult to track without the use of virtual cards, as it would otherwise have to be paid using private cards or otherwise.
Shopping on platforms like these becomes even easier with virtual cards, too. At every level, there is some sort of easing taking place.
For example, the employee making the purchase will not need to chase up the 2FA code often necessary for these cards, while the finance department are able to streamline card-only payments like these while maintaining their control.
Research and Development
R&D is the driver of innovation. However, companies often sink astounding amounts of money into the process. A lot of this spending is typically ad-hoc and small scale, exactly the types of spending that are difficult to structure or even track.
At the same time, many purchases are made through online channels that are strictly card-only. Straight away, there are two major roadblocks that further complicate an already complicated process. Thankfully, virtual cards can help out here in a few ways:
The main benefit here is that you’ll be able to rein in the spending. Research and development have to deal with all sorts of spending, whether buying competitor products online or creating prototypes.
The ability to set a limit on the spending using virtual cards helps ensure R&D teams adhere to their developmental budgets, which can quickly balloon if not properly controlled.
Insurance is a great example of an industry undergoing digitalization. Around 86% of insurers are in agreement that they must innovate rapidly to keep up their competitiveness .
By digitalizing payments, insurance companies can address many of the major challenges that they – and the industry as a whole – are currently facing.
In the insurance industry, many companies are still opting to settle up with assistance providers (e.g. car rescue, medical assistance and hospitals) using slow, often outdated manual invoicing processes.
Thanks to virtual cards, it is possible to reduce the internal processing time, cut down associated costs, process claimants quicker, and earn early payment discounts from providers.
No matter the industry, virtual cards are an ideal solution for business payments like those above. Discover how virtual cards can change the way you approach payments at your company for the better.