Virtual payment cards are similar to the physical ones that we usually have. However, the difference is you don’t need to have a physical card to transact.
In this article, you will learn more about virtual payment cards, how it works, its benefits, and more. We also included the best virtual pay cards you can acquire in the Philippines. So without further ado, let’s get started.
What are Virtual Payment Cards?
Virtual payment cards are non-physical debit or credit cards created for online purchases You may acquire one from a bank or a financial application.
The main difference between virtual payment cards to physical ones is you don’t have to go to a bank to make an account. Instead, all you need to do is go to their website and apply for a virtual card.
This virtual card comes with a 16-digit number, a verification number, and an expiry date similar to your ordinary bank card.
Virtual payment cards are also issued by the same companies that offer physical cards. It can come as Visa, Mastercard, or American Express.
Just like your debit or credit card, virtual cards are accepted anywhere as long as they support the type of card you have.
The other difference you can see between virtual and physical cards is that owners are given more control.
With virtual payment cards, you can choose your currency depending on what you need. The same can’t be said for physical cards, as it only supports your country’s currency.
You can also set the spending limit on your own.
For example, there are bank accounts where a spending limit is established depending on the type of card issued to the client. With virtual pay cards, your spending limit is in your hands.
The best thing about virtual pay cards is it provides an easy and convenient way for businesses and customers to transact without the need for an actual physical card.
It gives individuals another way to pay for their purchases if they don’t have a credit/debit card or if cash payment is not an option.
How do virtual pay cards work?
Virtual pay cards work similarly to physical bank cards. You can pay your bills and purchase stuff with it. However, the difference is in the process of acquiring one.
If you wish to have a virtual payment card, you will need to log in to your online bank or any other bank you prefer. Next, you have to send an application for a virtual payment card.
Then, the app will generate a card number, expiration date, and security code connected to your existing account.
Once you have the virtual card details, you may log in on the app or their online banking website to use it. You can also generate as many random numbers as you like for use in your online purchases.
You can also set a spending limit per day or week on that card number.
Benefits of virtual pay cards:
Aside from having complete control over your spending limit and the convenience it provides, virtual payment cards come with other benefits. In this section, we will discuss the advantages of virtual payment cards:
1. Virtual payment cards are secure.
Unlike physical cards, cash, and check payments, virtual payment cards guarantee more security.
Why? It’s because you do not need to share your bank account number.
When you do transactions using virtual payment cards, you only need to generate a 16-digit card number and use it. This way, the information you provide for the transaction will never be tied to your bank account.
However, the generated code is for one-time use only, and it can only assign an amount to a specific virtual payment card.
Not only that, but virtual payment cards are locked down to a specific amount, time limit, and maximum spending limit.
It means that if someone tries to steal your virtual card number out of the time frame or without the amount of information, they cannot use it for a transaction.
Lastly, the generated number for the virtual payment card is not linked to any physical card. This makes it safer and more secure for clients to make transactions online.
Also, it has real-time protection, providing a crucial layer of protection necessary when dealing with financial transactions online.
Virtual payment cards can be issued to multiple people.
Business owners can benefit a lot from virtual payment cards. Aside from providing another way to accept payments, you can also issue them to your team members and employees.
With that, anyone in your company who uses the company’s bank account daily can use the virtual card. Instead of asking the accounting head for access to the physical card, they can simply issue a virtual payment card.
As a business owner, you are responsible for keeping an eye on your finances and expenses. With virtual payment cards, you can control a spending limit according to your team’s estimated budget.
You won’t have to worry about overspending since your team can easily check how much they have available to spend.
2. Financial transactions are easy to track and manage
Compared to physical cards and similar modes of payments, assigning virtual payment cards to your team, vendors, and suppliers is easier.
In addition, you can track each transaction as generated numbers are always unique. Keep in mind that all purchases and payments made with your virtual card will automatically appear on your card management system.
There’s tremendous potential here to cut down on the number of times your accounting manager spends hunting down expenditure invoices.
It’s simple to track and settle transactions since each payment is assigned to the specific team person who made the transaction.
3. Virtual payment cards are easy to set up.
Applying for a virtual pay card is an easy and straightforward process.
Enrollment is done online, everything you’ll be required to provide and submit can be completed on the vendor’s website.
4. Virtual payment cards improve financial reconciliation.
Due to the ease of which you can track and manage transactions, virtual payment cards make it easier for accounting staff to maintain your financial books.
No need to commit time, money, and energy to find out the details of certain transactions as all reports can easily be accessed online.
You can even assign virtual payment cards to a particular individual, a specific division, supplier, merchant, customer, or local expenditure number.
This feature helps in keeping all transactions transparent and easy to track.
Virtual payment cards allow real-time authorization for transactions
Virtual payment cards provide you with the ability to approve or deny transaction requests in real time, eliminating purchasing bottlenecks in your company’s workflow.
And since urgent purchases/transactions can be authorized in real-time, your employees won’t be forced to make out-of-pocket expenses just to complete the transaction.
As a result, reimbursements (which can be a hassle to process for both company and employee) can be significantly reduced and even avoided completely.
Benefits of virtual payment cards to businesses and corporations:
As mentioned, firms and corporations can also benefit from virtual payment cards. Here are three reasons why businesses should consider using virtual pay cards:
It increases working capital.
Compared to B2B transactions done using physical checks, virtual cards allow for a more tactical approach. The conventional procedure of printing, packing, stamping, and mailing money to suppliers takes multiple days. Transactions with a virtual card can be made right away.
Quicker settlement entails receiving more payments on time.
The faster you pay your vendors’ purchase orders, the healthier your partnership will be. Some may even provide initial incentives, which may help you save cash by lowering transaction expenses.
Provides less manual labor.
Purchasing with virtual cards may help increase productivity as it frees up resources usually allocated for financial tasks that require manual labor.
This approach additionally aids in the reduction of human inaccuracy.
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