For most of the near-century since that point, the status of card-based payment has remained more or less stable; a physical card for physical purchases, that is, until the internet came along. At that point, thanks to the likes of eBay and a nascent Amazon, digital card payments grew in popularity and utility by the day. Nowadays, it’s possible to ditch the concept of a “physical” card entirely, should the need arise, in the form of virtual cards.
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Virtual cards, as the name suggests, are debit and credit cards exclusively hosted online. They have become popular, notably, in the business world. More to the point, though virtual cards can be, simply, a digital version of an existing plastic card, they can also exist solely in the digital space. This phenomenon means that, already, employers are ditching their physical corporate cards for these exclusively digital alternatives.
Like traditional plastic cards, virtual cards come equipped with all the usual data points; the user’s name, a sixteen-digit number, expiration date, and a security code. The similarities do not end there, as they work in precisely the same way as well. However, instead of waiting for physical cards to arrive in the mail, virtual cards can be issued instantly. When making any online purchase, whether for goods, services, or payments, simply enter the card information, and you’ll be good to go.
Though they’re similar to their physical counterparts in many ways, virtual cards possess several advantages. Without getting too deep into the weeds, virtual cards display superiority in two primary realms:
Companies still often use a limited number of corporate cards, which multiple teams and departments must share - as old school as that may sound. With virtual cards, their information can be retrieved anywhere, anytime. Additionally, virtual cards rock the convenience factor by allowing users to customize their spending limits or even integrate with their existing digital wallets while allowing users and teams to get visibility into every online purchase.
It’s hard to steal something that doesn’t physically exist. Virtual cards lack the primary aspects of physical cards that thieves take advantage of, including visible card numbers and magnetic strips. Moreover, virtual card systems often make card locking a simple button click in cases of unidentified account access.
To be honest, the downsides of virtual cards are mainly semantic in nature. Since virtual cards, by their very nature, lack a physical presence, it can be challenging to arrange returns/refunds from brick-and-mortar shops, which often require a tangible card to initiate. Additionally, virtual cards often come with shorter expiration dates than physical cards, which can cause headaches for recurring purchases or subscriptions. However, this issue can be alleviated by integrating your virtual card with a digital wallet.
More often than not, virtual cards are free to create. However, as any discerning customer already knows, nothing is ever 100% free. This case is no exception. Issuers of virtual cards, in place of a flat fee, often charge per transaction. For instance, a virtual cardholder might be charged $2.49%, plus $0.35, on top of each purchase amount.
Just as in the case of physical cards, virtual cards can purchase just about anything. Essentially, if a business accepts Visa, MasterCard, or the like, a virtual card will be fine. However, as mentioned, virtual cards are not designed for a physical purchasing environment, so transactions using them should be limited to the internet and over the phone.
To gain a fuller understanding of virtual cards and their use cases, one should look no further than their applications in the business world. One such issuer of virtual cards is PayEm. From vendor payment to business trip expense management, the quality-of-life implications stemming from PayEm’s connected finance platform have been remarkable over the past couple of years. For more information, including how to set up a demo, give us a visit here.