Virtual Cards in the UK: Enhancing Security and Control in Business Spending
Virtual cards have emerged as a revolutionary financial tool, offering businesses a modern approach to budgeting, cost control, and security of financial data. In the UK, these digital payment solutions gained significant traction during the COVID-19 pandemic, when their ease of setup and management proved invaluable amid restricted traditional banking and business operations. The best virtual debit cards offer features and advantages for consumers, such as enhanced convenience and security over traditional physical debit cards.
This innovative technology is particularly beneficial for companies with international operations, where conventional methods like physical corporate cards, bank transfers, and out-of-pocket expenses often fall short. As more providers enter the market, it’s clear that virtual cards are meeting the dynamic needs of modern enterprises.
This article explores the impact of virtual cards on business spending in the UK, with a focus on their role in enhancing budgetary control and improving security. We’ll examine how the encryption of virtual card details, unlinked to personal information, provides an extra layer of protection for financial transactions. The growing importance of this technology is evident, with Mordor Intelligence projecting a Compound Annual Growth Rate of 8% for virtual cards in the UK through 2029.
What is a Virtual Card?
A virtual card is a digital representation of a debit or credit card that can be stored on a mobile device. Just like a physical card, it comes with a unique card number, verification number, and expiry date. However, unlike a physical card, a virtual card exists only in digital form, making it a convenient and secure option for online transactions.
Virtual cards can be obtained when signing up with digital banks or linked to prepaid accounts. They offer the same functionality as traditional cards but with added security features. For instance, a digital card is essentially a copy of a physical bank card, allowing you to use it for online purchases without exposing your actual card details. On the other hand, disposable virtual cards are designed for single-use, providing an extra layer of protection for one-time transactions.
Types of Virtual Cards
There are several types of virtual cards available, each catering to different needs and preferences:
How does a virtual card work?
This is how the process works step by step:
Why should you use virtual cards for your UK business?
Virtual cards are being used by businesses around the world to facilitate B2B buying, reduce transaction costs, and increase efficiency. Even if your business is located in the UK, you shouldn’t miss out on the opportunity to improve your financial operations.
1. Control of business spending
With virtual cards, you can monitor and control spending in real-time while eliminating the need for repetitive approval processes for every purchase. All this ultimately translates to better and more efficient control of business spending.
2. Enhanced Security Measures
Security is a top concern for businesses today, especially when it comes to financial transactions and online purchases. The advanced security features of virtual cards significantly reduce the risk of fraud and unauthorised use of funds, making them a safer alternative to traditional physical cards.
3. Overcoming Cross-Border Challenges
Your UK business may have subsidiaries in other countries, you may be considering cross-border expansion, or you may simply have clients or suppliers in other countries. In all these scenarios, managing cross-border transactions can be challenging due to volatile exchange rates and costs. Virtual cards can provide a solution to some of these challenges by offering multi-currency support, allowing businesses to conduct transactions in various currencies without incurring significant fees.
Managing Virtual Cards
Managing virtual cards is straightforward and can be done through mobile banking apps. These apps provide a range of functionalities that make it easy to control and monitor your virtual cards:
Virtual Cards as a Strategic Tool for CFOs
UK CFOs are increasingly looking for tools that will improve financial control while also helping them grow the business strategically. Many virtual cards offer features that align with the strategic objectives of modern CFOs, such as cash flow management, cost reduction, visibility, and financial risk mitigation.
Spending Limits and Fees
Virtual cards may come with spending limits and fees, which can vary depending on the provider and type of card. It’s essential to understand these limits and fees to manage your finances effectively. Some common fees associated with virtual cards include:
To avoid unexpected charges, always check the terms and conditions of your virtual card provider. Understanding the spending limits and fees associated with your card will help you make informed financial decisions and optimize your business spending.
Fyorin’s Borderless Virtual Cards
Fyorin empowers international businesses with multi-currency virtual cards that provide efficient expense management, budget control, and cost reduction across borders.
With our virtual cards, our customers typically save approximately €12,000 annually, with additional earnings from the cashback. Are you ready to optimise your global budget management? Reach out to [email protected] to request your virtual card, or schedule a free demo.
Frequently Asked Questions
Can I get a virtual credit card in the UK?
Yes, you can get both virtual credit and a virtual debit card in the UK. There are many banks and fintech companies offering virtual cards to business. The availability may depend on your credit score and the specific provider's requirements.
What's the difference between a virtual credit and debit card?
The main difference between a virtual debit and credit card in the source of funds. A virtual credit card borrows money from a pre-approved credit line, which you repay later. On the other hand, a virtual debit card takes funds directly from your bank account it's connected to.
How does a virtual card work?
A virtual card works just as a physical card but exists only in digital form. It has a unique card number, expiry date, and CVV. When making an online purchase, you enter these details as you would with a physical card and the funds are drawn from the linked account or credit line, depending on whether it's a debit or a credit card.
Fyorin, your global financial partner
Interested in transforming your treasury management function? Get in touch with us at [email protected]