A Quick Guide To Virtual Payments

 

As businesses adapt to the digital world, virtual payments are becoming the go-to payment solution for most businesses—both online and offline. 

In fact, statistics reveal that virtual cards are expected to process over USD$6.5 trillion worth of transactions in 2026. 

If you’re thinking of jumping on the virtual payment bandwagon, this article gives you a basic rundown about virtual payments.

Virtual Payments: What Are They?

In general, virtual payments refer to virtual credit or debit card payments, but they can also refer to other digital e-wallet payment solutions. 

Virtual payments are simply payments that don’t need a tangible or physical token to happen. You won’t need physical cash, credit or debit card, or other physical forms for payment. 

In short, virtual card payment is a digital card transaction. It’s a ‘card-less’ debit or credit card payment accepted by any entity that takes physical card payments. 

How Do Virtual Cards Work?

If you are using a credit or debit card issuer like a pyypl virtual card, these use what is known as a virtual card feature, you can usually request one via your online bank account from most reputable high street banks. You’ll get a randomly generated card number, security code, and an expiration date tied to your actual bank account.

When you use the virtual card to buy online, the transaction will reflect on your account statement as if you’d used your physical card.

Why Use Virtual Card Payments?

Listed below are the benefits of virtual payment cards. Because of these unique advantages, many businesses are switching from physical cards to virtual ones. 

• Increased Security

Unlike check and automated clearing house (ACH) payments, a virtual payment card doesn’t require a customer to expose or share their bank account number. This presents a strong security benefit of using virtual cards. 

Information tied back to your bank account is not exposed. The virtual card numbers are generated randomly for a one-time transaction with a specific amount and time to use. This means that if a thief steals your virtual card number without the exact payment amount or outside the time limit, the numbers are useless. 

• Streamline The Accounts Payable Process

Using virtual cards can help modernize your accounting department, replacing cumbersome and inefficient manual processes. With a single-issue virtual card, your accounts payable (AP) department can focus less on processing several payments and more on productive financial responsibilities. They don’t have to write checks, stuff these in envelopes, and meter those envelopes. 

Aside from saving time, switching to virtual payments also helps in eliminating or reducing the risks of human error with a more streamlined AP process. 

• Low Cost

Most virtual payment providers tend to offer reduced fees for customers. With virtual cards, you’ll have lower fees and may even earn cash rebates for just paying your suppliers. 

Since everything is online, the operating costs are also reduced, so virtual card providers charge less to their customers. 

• Easy To Set Up and Use

In the earlier years, virtual payment cards were only accessible to large businesses and corporations. However, as the business world shifts online along with rapid advances in financial technology, virtual payment solutions have become readily available to companies of all sizes. 

Banks and technology companies allow you to easily set up an account online and start creating virtual cards for your business. 

• Faster Transactions

Virtual cards allow for a faster transaction for business payments than traditional methods. Traditional payments like paper checks often require days of printing, packing, stamping, and mailing payments to vendors. In contrast, virtual card payments can be completed immediately. 

With the ability to pay faster, you can have a healthy cash flow as well as create a better relationship with customers and vendors. Some vendors may also offer early-payment discounts that can help you save money. 

• Subscription And Spending Management

Modern businesses often have online subscriptions to various software and solutions to operate efficiently. Using a virtual card allows you to manage these online subscriptions.

Also, by setting up a virtual card for each subscription, you get transparency on subscription spending. You’ll see if a provider overcharges your account. Then, you can easily cancel the card without changing your payment information for other providers. 

Aside from managing subscriptions, virtual cards also help in limiting spending. Sometimes, your employees will need a company card to pay for their work expenses. Instead of giving them the physical company card, opt for a virtual card instead. Since it allows you to choose a specific merchant and set a particular amount, it controls your employee spending and ensures that company funds are spent wisely.

Takeaway

In today’s fast-paced digital world, businesses need to evolve and shift to a more virtual existence. And in the financial space, virtual card payments can help modernize business transactions. 

By taking advantage of such future-ready solutions, your business can stay relevant in this increasingly competitive world.