In a time where many businesses are looking to cut costs, streamline and mitigate risk, many CFOs are turning to virtual cards for business payments and this has become a major business trend over the last year. Switching to virtual cards can bring a multitude of benefits to businesses, including both improving your bottom line and reducing risk.
A virtual card is similar to a regular debit card in that it has all of the details but there is no physical card and each one has a unique number. Cards can be issued with certain rules and restrictions, such as single-use virtual cards or there being a limit to the price or number of transactions. So, how can these improve business payments?
Improve Cash Flow
One of the main benefits is that a virtual card can improve cash flow as it is much quicker to pay suppliers than using a check or ACH payment. Virtual cards enable businesses to pay on order and increase cash flow by extending days payable outstanding (DPO). Suppliers are also able to reduce their days sale outstanding (DSO), so it is a solution that will keep everyone happy.
Every business wants to make savings, especially in uncertain times like these. Using virtual prepaid cards helps businesses to make savings by reducing costs on check-cutting, reconciliation, supplier onboarding and leakages. Not only this, but you can make savings on processing fees which can make a big difference over the long term.
You can also improve efficiency by switching to virtual cards by providing real-time visibility into spending along with streamlined payments. This will allow you much greater visibility and control over business spending, which can bring many benefits.
Increasing Safety & Reducing Fraud Risk
Another major benefit to virtual cards is that it offers great security and protection, which is key in a time where cybercrime and fraud are major issues for businesses. By setting unique parameters for cards, it means that they cannot be used maliciously and with each card having a unique number (and not being physical) it can prevent fraud from happening. This will provide important peace of mind and help you to conduct payments with confidence.
Virtual cards are a great payment solution right now for business and look set to be a major trend going forward. They can help businesses to streamline, improve their bottom line and reduce risks amongst a number of other benefits.