What Is a Burner Card and How Can It Help Your Business?
by Maddy Osman
Many businesses use corporate expense cards to pay vendors or issue them to employees for travel and other expenses.
However, there may be times when you want to give employees spending power without requesting a new credit card — and without you having to spend too much energy worrying about how they’ll use it.
A single-use virtual payment card, also known as a burner card, is an attractive alternative to a corporate credit card for several reasons. Burner cards can help protect your business from credit card fraud, give you more spend control, and they’re easy to issue.
Here’s what you’ll learn:
- The Trouble With Using Credit Cards for Business
- What Is a Burner Card?
- Benefits of Using a Burner Card for Your Business
- How To Create a Burner Card With Plate IQ
- Final Thoughts: What Is a Burner Card and How Can It Help Your Business?
The Trouble With Using Credit Cards for Business
Company credit cards might seem like an excellent option for business owners who want to delegate vendor payments or streamline employee reimbursement, but they do come with risks.
They Can Compromise Security
Credit card fraud is the leading type of identity theft. When you use a company card to make online purchases, you risk hackers accessing the card’s details.
When data breaches occur, your credit card number can easily be compromised without your knowledge. Unfortunately, most businesses don’t learn about the fraud until it’s too late.
Credit Cards Enable Overspending
Unlike debit cards, credit cards let you spend money that you don’t already have. Without proactive budgeting in place, you risk overspending and incurring more debt with high credit card interest rates.
Unless you track company credit card transactions every day, overspending usually comes as an unpleasant surprise during your month-end close.
They Are Hard To Monitor
Expense fraud costs U.S. businesses billions of dollars every year.
One of these four kinds of expense report fraud may be costing you:
- Miscategorized expenses: When an employee claims a personal expense (such as a Netflix subscription or personal Amazon purchase) as a business expense.
- Fake expenses: When an employee creates a fictitious receipt and submits it as a business expense.
- Overstated expenses: When an employee claims they spent more money than they did on a business expense.
- Multiple reimbursement claims: When an employee claims reimbursement for one receipt numerous times.
Although some credit card providers let you add spending limits to your company cards, you don’t have much control over how employees use your company’s money.
What Is a Burner Card?
Burner cards are single-use virtual payment cards that can help you reduce the risk of online shopping fraud. In other words, it’s a virtual card that expires automatically after the transaction, which makes it ideal for one-time expenses.
A burner card can be a virtual credit card or virtual debit card. Both types of cards can be used for online shopping or anywhere that accepts payment from your mobile device.
Once issued, a burner card can be added to a digital wallet or payment apps such as Apple Pay for iPhone or Google Pay for Android devices.
Some examples of one-time use expenses that you can pay for with a burner card include:
- New appliances
- New furniture
- Employee gifts
- Repair jobs
- Relocation expenses
Additional Types of Virtual Cards
In addition to burner cards, there are two other types of virtual cards you can issue for your business:
- Multi-use: A reloadable virtual card that can be used multiple times. Multi-use cards are often used for expenses such as fuel or utilities.
- Recurring: A virtual card that automatically reloads each month with a set amount of money usually used for subscription payments.
Multi-use and recurring virtual cards are used for fixed and variable regular expenses.
Benefits of Using a Burner Card for Your Business
Here are some of the primary business benefits of issuing a burner card instead of a new corporate expense card.
Lower Risk of Fraud
Virtual single-use cards reduce the risk of credit card fraud. Since a burner card can only be used for a single purpose or use, hackers can’t use the credit card information to complete additional transactions.
A burner card also helps prevent internal expense report fraud. You can issue a burner card to an employee that doesn’t usually spend money. For example, a single-use card can be created to pay for an employee who doesn’t need a corporate expense card to attend a conference.
Issuing a burner card to pay for one-time employee expenses eliminates the risk of an employee misplacing a real credit card or spending more money without your authorization.
Increased Spend Control
In contrast to a physical credit card or debit card, virtual cards give you much more spend control options. In addition to setting spend limits, you can lock the cards to specific vendors.
For more oversight, you can require authorization to complete the transaction. Requiring cardholder authorization in the checkout process helps prevent credit card fraud from external hackers.
You also can require manager authorization to prevent employees from misusing a burner card.
Easy To Issue
Compared to a corporate expense card, a burner card is much easier to issue. Virtual cards are available instantly after they’re issued. There’s no waiting around for a new card to arrive in the mail.
You can use burner credit cards and debit cards immediately for online purchases or mobile payments.
If you want to use digital credit cards, you need to be approved first, and you’re still subject to monthly fees and interest rates. Virtual debit cards are even easier to issue because you don’t need to wait for the approval.
Instead, you can issue a new card as soon as you sign up and connect your bank account number.
How To Create a Burner Card With Plate IQ
With Plate IQ, you can issue virtual expense Visa debit cards on-demand.
Here’s how to create a single-use burner card with Plate IQ:
- Log in to your Plate IQ account
- Navigate to the Cards tab
- Select Create Card to open the card creator page
- Select Virtual Card
- Select One-Time
- Set a spending limit and assign a cardholder
- Click Create Card
Once you finish creating the card, you can immediately use the card number for online payment or mobile transactions.
Final Thoughts: What Is a Burner Card and How Can It Help Your Business?
Corporate expense cards have become increasingly popular, but they pose several risks for businesses. In particular, business cards leave you vulnerable to identity theft and expense report fraud.
Using a burner card for one-time expenses can help you retain more control over how your business’s money is spent. Burner cards are secure alternatives to credit cards, and they’re easy to issue and use for one-time expenses.
Learn more about the Plate IQ virtual debit card and start exercising more control over your business spending today.
Maddy Osman is a writer and entrepreneur who writes about B2B technology at The Blogsmith, a research and content agency. To learn more, visit TheBlogsmith.com.
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