
What Are Virtual Cards (or vCards) And Why Should Finance Teams Use Them?
by Lenny DeFranco
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In the last ten years, a new technology has emerged in the world of B2B payments that has changed everything about how finance and accounting teams think of corporate cards.
This technology represents the fastest-growing segment of the payment landscape, forecast to process over $355 billion by 2022. It is gaining popularity amid concerns about digital security, a desire for greater convenience and control, and as more and more companies gain access to it in their existing workflows.
We’re talking, of course, about virtual cards.
What are virtual cards?
Virtual cards (also called vCards) are randomly-generated card numbers that allow you to use card payment portals with single-use or multi-use credit card numbers. They are generated digitally by the card issuer almost instantly and are designed to be entered into online purchase or checkout forms.
Here’s how it works:
Suppose you are in the checkout process of an online purchase. You’re at the payment section, where you’re about to provide your credit card details.

Instead of entering the number that is printed on your physical credit card, you can use a one-time-use number that is generated by the card issuer.
This number is linked to your credit card account. The transaction goes through and the charge is posted to your account.

That vCard has all the information you need to submit a card payment — a 16-digit controlled payment number, expiration date, and security code — with one big difference:
Once it’s used for that specific transaction, that number can never be used again. (Unless you choose to designate it for multi-use transactions.)
Now, both you and the vendor are happy. Both parties have completed what looks like a regular credit card transaction, and you rest easy knowing that all you’ve sent out into the world is a disposable card number.
Even if a hacker somehow got hold of your vCard number, they wouldn’t be able to do anything with it. No need to call the bank, get new cards mailed, or any of that hassle.

Why should you use virtual cards?
Virtual Cards are becoming more widely accepted, especially with contact-less payments
This flexible, secure technology is already shaping up to be one of the most enduring payments innovations of the new decade. With vCard issuance becoming ever more available in financial software — and with the Covid pandemic driving people to seek contactless payments — interest in vCards has never been higher.

There’s also the fact that virtual cards empower all the benefits of a card program with little of the risk. Here are a few more reasons to consider making virtual cards part of your finance team’s payment process:
Virtual Cards Give You Fine-tuned Control Over Spend Parameters
When you generate a vCard, you’re not just creating a disposable credit card number. You can adjust all the card’s parameters; expiration date, merchant category codes, even the dollar amount it can send in payment.
Imagine being able to create, in just a few clicks, a vCard pre-funded to the precise amount of an annual software subscription and left on file with the vendor.
If they raise prices or try to tack on any additional charges, the card won’t clear — and you’ll know about it.
Virtual Cards Are Much More Secure
Virtual cards add a powerful layer of protection between your card account and a would-be thief. By masking your actual account with a randomly-generated 16-digit vCard number, any fraudulent activity would only have access to whatever that vCard is allowed to spend.
This safety mechanism also saves you hassle, too. If a regular credit card number were compromised in a hack or identity theft, not only would it expose the contents of your account, but you would have to replace your single account number everywhere it appears on file.
With virtual cards, one number becoming no longer usable has no effect on the other vCards associated with your account.
Virtual Cards Scale Better For Your Organization
In the same vein, vCards scale much better than regular credit cards. Instead of giving out a single card number to any employee who needs to make a purchase — and having to track and control that activity — a vCard program allows you to issue payment methods to whoever needs it with confidence, entirely virtually.
When those employees, accountants, or staff members use the cards to pay invoices, it will send payment more quickly and accurately compared to a check or ACH transaction.
Using Virtual Cards To Pay Vendor Invoices Boosts Your Margins

Many companies view virtual cards primarily as a way to replace expense reports in parallel to their existing corporate card programs. As extensions of corporate card programs, vCards often bring cash back rewards that add up over time. To small businesses especially, these rebates can make a significant difference to the bottom line.
But a key area that many controllers and business operators overlook is paying their vendor invoices with virtual cards from inside their Bill Pay platform.
Paying invoices with virtual cards not only earns rebates on existing spend, but due to the higher spending volume compared to employee expenses, earns even more cash back than the conventional, “petty cash” utility of vCards.
For example, if you have a $100,000 monthly bill with Freshpoint, WorldWide Produce, or Ecolab, a 1% cash back program on your virtual card could earn you a $1000 in rebates that you could use towards working capital.
This system works because all three vendors are part of Plate IQ’s Bill Pay network and accept payments made with virtual cards (because they get paid faster and get paid on time). In return, they would pay a transaction fee, a portion of which is passed to the cardholder as cash back.
Paying bills with vCards requires no behavior change
Another reason bill payment is a great place to start leveraging the benefits of virtual cards is that it fits within your existing bill pay workflow.
With vCards, there’s no need to pull out any systems or alter your relationships with your vendors. All you’ll do is to send your vendors payments faster and more securely, and enjoy the rewards.
Virtual Card Payments Let You Pay Vendors On Time
For many companies, bill pay is synonymous with sending checks through the mail. If that sounds like you, consider how much time and hassle goes into making sure every step of the process works.
First there is the cost of sending the check, which requires postage and the manual work on the part of your AP team to get the payment sent and properly recorded.

Second, then you need to wait for the payment to post, and when it does, you need to hope it gets applied to the right account. (Figuring all of this can also mean your payment may be marked as late).
Virtual card payments don’t cost any money to send; in fact (as we pointed out earlier), they earn you cash back. Payment posts almost immediately, and you can be sure of where the payment is being applied. Vendors are also able to verify this through their Bill Pay vendor portal.
Start Paying Invoices With Plate IQ Virtual Cards Today
If the security, speed, and convenience of virtual cards is something your business has been thinking about trying, but you’ve never been sure how, consider introducing this powerful payment mechanism into your bill pay workflow.
Getting started with virtual cards is easy. Get in touch with Plate IQ today, and let us help you turn your bill pay headaches into an on-ramp to today’s most critical payments innovation.

Lenny DeFranco writes for Plate IQ about how businesses in hospitality, accounting, and more can gain efficiency and earn revenue through AP automation.
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