It’s probably safe to say that the fintech sector is one of the most happening, exciting places to be in right now. Whether you’re an investor, a customer, or even a distant observer, all of us continue to revise our own estimates of its potential by leaps and bounds, as it comes up with newer, more consumer-friendly innovations almost every quarter. One such path-breaking innovation by the fintech sector has been the virtual card, and we’re going to take some time to talk about why enterprises should be giving it all their attention.
A virtual card, simply put, is a virtual replacement for good old physical credit and debit cards. It essentially is a mode of payment that uses all the card information mechanisms and transaction systems that physical cards use while eliminating the need to take care of and carry along an actual card. For all intents and purposes, it is like an ordinary online transaction using card details and is just as fast and easy to use. It is for this reason that they are being touted as an adequate replacement to credit cards which are forecast to become obsolete in the next 5 years.
Why are more and more businesses opting for virtual cards?
It is obvious that virtual cards are a great option for individuals, especially during pandemics where using a physical credit card would increase the risk of transmission.
But on a more macro level, virtual cards do also add more value by replacing corporate cards in additional ways (as discussed in the next section). In fact, the shift of users to virtual cards instead of credit cards has already started. According to a 2019 report by Juniper Research, the use of virtual cards for business expenditures is expected to grow by 90% in the next few years, and usage is slated to pass $1 trillion by the year 2022. Even a report by Accenture stated that as many as 25% of Fortune 100 companies are now using virtual cards.
What are these businesses seeing that others are yet to consider?
Factors propelling the shift to virtual cards for businesses
There are several reasons why more and more businesses are inclined towards switching out physical cards with virtual cards. Some of the most pertinent factors supporting the switch to virtual cards can be encapsulated as follows:
- Easy Process
These cards can be easily issued, instantly paused/hotlisted, or canceled. None of it requires any lengthy and tedious paperwork as most of these things can easily be done online via self-service portals or mobile apps.
- Dynamic expenditure management powered by automated reporting
There’s an excess of customization options – such as limiting the number of transactions, eligible vendors, or the spending limit on the virtual card – available as a tool of effective control over their budget and expenditure. The virtual cards give an option to the employer to maintain spending limits based upon the total amount of spending or the number of transactions. This can help guide budgeting in a better direction and effectively use company resources.
In addition to steering employee expenditure in the right direction (and that too on an individual basis), a virtual simultaneously assists in ensuring more robust expenditure management at an organizational level. Virtual card usage allows for real-time reporting for each and every employee. It’s automation magic at work!
Of course, this can be used as an opportunity to adjust and tweak future expenditure limits individually or for the entire business at efficiency levels never seen before. In short – it is a boon for small businesses or startups where limited resources and effective budgeting is essential for survival and growth.
- Eliminates the need for expense reports
Since all expense transactions can be accessed with just a simple click, considerable amounts of time and resources on paperwork can be saved. As a business, you know that this translates into cost savings. In addition, a virtual card completely eliminates the need for filing requisitions, invoices, and bills. The accounting and finance department, therefore, have a far easier time generating expense reports. What’s not to love?
The conventional Corporate Card or Virtual Card: the choice is obvious
Due to these utilities and advantages over the conventional corporate card, it is frankly unsurprising to see an increasing number of businesses opting for virtual cards. Its ease, flexibility, and options for customization make it very useful for enterprises, after all. However, there’s room to optimize this decision even further. Pick a brand like Salt to fulfill your virtual card requirements, and you’re ensuring security, integrity, and seamless integration with your organization. Click here and join the waitlist for Salt, and gift yourself seamless banking services, including virtual cards of course, with just a click.