Companies are continuously looking for ways to improve how they manage their spending, to increase cost-efficiency and the effectiveness of the process.
An aspect of this that’s risen in popularity in recent years, is the use of virtual credit cards, which offer an innovative way to better manage your corporate spend.
However, as with any new software for your business, it’s important to first understand every aspect of these virtual cards, before deciding to implement them into your company.
Therefore, this article will take you through what virtual credit cards are, as well as the pros and cons of using them in your business.
What are virtual credit cards?
Virtual credit cards for your business work in a similar way to physical cards, except they operate on a digital platform, and come with a range of extra features for spend optimization.
Virtual credit cards are stored and accessed from a digital wallet, which is where all your cards are managed online. This includes viewing your cards, seeing the transactions, and controlling which ones are active.
The best digital wallets for your cards will come as part of a spend management platform, which allows you to apply a range of expert features to improve the effectiveness of your cards – and your entire corporate spend as a whole.
Virtual credit cards that with come with a spend management platform can allow you to incorporate things such as spend limits, budgets for every card, automated approvals, and various other features.
There are different virtual cards available, so ensure you purchase from a trusted provider – preferably a spend management platform that can help you elevate the cost-efficiency of your business.
What are the pros and cons of virtual credit cards?
Virtual credit cards come with both pros and cons, which are important to understand before you use them in your business. A few of them are:
Pros:
1. Full control over your spending
Virtual credit cards can offer a range of features which give you full control over every aspect of your spending.
For instance, they can allow you to put specific spend limits on each card, which will automatically prevent any transactions which overstep this limit.
Controls like this ensure you’re always in full control of how you spend money, with the ability to adjust each component as you see fit.
2. Improved visibility
Virtual credit cards can also provide you with complete visibility over every transaction made with each card.
This is essential for gaining a full picture of corporate spend, as with each card linked to your business providing extensive data, you’ll see exactly how effectively your company spends money, as well as where it can improve.
3. More efficient processes
Another benefit of virtual credit cards is that they can greatly improve the speed at which many processes take place, regarding corporate spend.
For example, you can include automated spend approval requests, which will automatically clear any transactions requested, which fit certain criteria set by you.
This allows for every aspect of your spend management to run smoothly in your business, and all your cards to be strong contributors to this efficiency.
Cons:
1. May have limited use
A potential con of using virtual credit cards is that they may not be allowed for certain instances.
For example, this may be a particular purchase where the recipient company prefers physical cards only, or the fact that cash may not be withdrawn using these cards.
Therefore, be cautious of all the instances that might prevent the use of these cards.
2. Can still be vulnerable to fraud
As with any type of payment, there’s always potential for fraudulent activity to disrupt your spending.
Since the cards are digital, this means they might be vulnerable to hackers attempting to steal sensitive data.
To combat this, be sure to choose a card provider that assures optimal security and protection for their software.
3. Be aware of included fees
Another thing to be aware of when using virtual credit cards, is the inclusion of any fees or charges that might come with it.
Some cards, for instance, may add charges to any cards which don’t have a specific amount of money stored on them, or add additional fees for certain types of transactions.
Make sure you choose a provider which is very clear about all their fees and charges, and offers the best software at the cheapest price.
Now that you know all the pros and cons of these virtual credit cards growing in popularity, you can better decide whether they will be a cost-efficient addition to your company’s spend management.
