Virtual cards can offer five key advantages over traditional corporate payment cards:

Versatility. Virtual cards give buyers and suppliers more choices for payment delivery and processing. In the most common approach, the buyer funds the card and the card system generates an email notifying the supplier that payment is ready. The supplier then “pulls” funds from the card. In recent years, straight-through processing (STP) has enabled a buyer to initiate payment, fund the card account, and then “push” the transaction through the card network and into the supplier's pre-designated demand-deposit account. The virtual card system then generates an email notifying the supplier that a payment has been made.
Flexibility. In addition to the pull and push models, virtual cards offer optional data files to buyers, to aid with reconciliation. A virtual card payment can also be specified “exact-match” for a given transaction, which means the buyer can require the supplier to accept only the specific amount funded on the card. This approach can help prevent partial payments and potential reconciliation issues. Alternatively, buyers may choose to pay multiple invoices through a single lump-sum payment, enabling the supplier to accept the lump sum or several smaller payments from the single-card transaction.
Control. Buyers can preapprove payments to known suppliers, limiting transactions to those that meet specified criteria around payment value, number of permissible transactions, and payment timing. Virtual card transactions can also increase suppliers' confidence about PCI compliance, since virtual card account information is retrieved via a secure email or URL, eliminating the need to store account information.
Cost efficiency. Virtual cards provide enhanced remittance data that's easily integrated into accounting and enterprise software platforms. Processing an invoice from a known supplier through the buyer's standard accounts payable (A/P) review processes captures remittance data in bulk. Once the invoice is approved for payment, the card transaction is triggered. This process reduces manual effort within the payment workflow, improving productivity of both the buyer's A/P department and the supplier's accounts receivable team.
Better fraud protection. Both buyers and suppliers are concerned about payment fraud—and with good reason. According to a recent survey by the Association for Financial Professionals (AFP), 78 percent of all businesses have fallen victim to payment fraud. Two unique features of virtual cards help reduce fraud exposure: First, the payment has already been approved through the buyer's standard A/P processes before the actual virtual card payment request is made. And second, if a payment is processed via a single-use virtual card, the card account number is tied to that specific transaction and must be executed within a specific time frame.

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