Procurement is a big topic these days. With workforces working remotely and more spending now taking place online, companies have started to realize that the time has come to optimize how they go about facilitating these types of payment.
But this begs the question: how exactly can businesses optimize their online spending, especially for procurement? Thankfully, we have the answer in the form of virtual cards.
So, how do they help to bring about quick, easy and more secure online payments?
The Growth of Online Spending
Just as consumer spending is beginning to see a shift online, businesses are also moving towards the digital realm.
The benefits are pretty obvious in both cases, so it’s no surprise that online purchases are increasing significantly across departments, in parallel with the growth of online platforms and suppliers, as well as the spread of remote working.
Over 70% of businesses surveyed stated that their online purchase volume would increase in the coming years, with more than a quarter saying it would increase significantly.
Unfortunately, this new trend has started to present some issues for businesses, which have been exacerbated by the pandemic.
Common Procurement Issues
The biggest issue is that online platforms, online retailers and online suppliers more often than not require the use of credit cards for payment, or at least have them as the preferred payment method.
But companies very often are not equipped for this. They lack the appropriate centralized corporate payment methods to deal with these kind of procurement purchases.
In fact, 60% of corporate companies interviewed by AirPlus use 3 or more payment methods in parallel, leading to increased monitoring efforts and a loss of overview. These methods usually revolve around bank transfers and direct debits, at least where supported.
That last point is key, as online payments often do not support these methods, and so companies must use a different means of payment.
Some companies fulfil this need by asking employees to pay with their private credit card, a prepaid card, departmental card, or even a manager’s card, and then get reimbursed via expense notes.
This is a problem. Companies are having a tough time keeping track of these purchases, as they are being made through different channels, by different employees, and with different payment methods.
Knowing all of this, it should be obvious why having such a diverse range of payment methods and using them in parallel as the situation calls for it makes it incredibly difficult to monitor effectively.
In recent times, another hurdle has presented itself. Since January 2021, strong customer authentication or ‘SCA’ regulations have come into force.
Basically, this required a change in payment behaviors: all online consumer payments require the use of two independent elements when accessing accounts and making electronic payments, among other things.
Referred to as two-factor authentication, or ‘2FA’ for short, the procedure enables card issuers to verify a payer’s identity before authorizing a transaction.
As great as this is for security, this can complicate a lot when it comes to corporate payments and make the process neither flexible nor quick and seamless, as it should be.
Looking for the Ultimate Procurement Payment Solution
We should now be familiar with the pain points faced by companies when it comes to procurement payments.
There is little visibility into the spend, and businesses are asking for a secure, quick, easy online payment method to match this latest purchasing trend. You can see it in the numbers.
33% of the businesses we interviewed highlighted having huge pains with the security of online payments , with another 13% struggling to provide a payment solutions as quickly as needed by their employees and reduce administrative workload.
Thankfully, there is one solution that fits the bill, providing secure, quick and easy payments all in one: virtual cards.
How Virtual Cards Optimize Online Procurement Payments
Virtual cards are able to answer the common issues plaguing the modern procurement scene: the inability to handle quick and secure online payments from multiple requesters and multiple providers.
Speaking of which, security is a major benefit offered by virtual cards when it comes to online payments.
New, unique card numbers, with corresponding card information, can be created in just a few seconds, if not automatically. These can then be locked down for highly specific uses.
For example, the purpose, exact invoice amount, currency and period of use can be limited to the exact needs of each payment. They also become invalid after they are used, reducing the risk of misuse further.
Thanks to the underlying processes and protocols being classified as particularly secure, single-use AirPlus Virtual Cards are qualified for exemption from 2FA verification. Put simply, there is no need for a PIN or password when making payments using single-use virtual cards, saving time.
For payment transactions and authorizations made with multi-use AirPlus Virtual Cards, conceived for recurring payments, 2FA is used to heighten the security of these payments.
However, it’s possible to whitelist a merchant to permanently from the requirement. After the first transaction is made using the 2FA code, the merchant will be ‘logged’ in the system, meaning no other merchants can then charge that card.
A 2FA code will therefore no longer be needed for subsequent charges, whether monthly or otherwise.
A Modern Solution to a Modern Issue
Virtual cards may be the best way for businesses to optimize their procurement spending. No longer will payments need to be made on a borrowed card, requiring the sharing of confidential data like 2FA codes and PIN codes with each and every purchase.
The accounting team will also be thankful to get a proper overview of the actual spend without the need for expense reports from employees using their own cards.
The ability to limit them to highly specific payments helps to keep them secure, providing control to the accounting or purchasing team and helping them keep track of procurement spending.