Virtual Cards for Payments: Best Practices

Managing cash flow is crucial for any business, especially for growing businesses. Every client receipt, payroll run, and supplier payout must be meticulously recorded and paid. To support this, the financial services industry invests heavily in enhancing payment technologies and capabilities, aiming to improve efficiency, value, and user experience in B2B payments. For finance teams and business owners to fully benefit from these advancements, they must stay informed about emerging payment trends and be prepared to seize the opportunities they present.

In the past, manual handling of revenues and disbursements through cash or cheques led to unnecessary delays, risks, and frustrations. Today, modern payment systems are increasingly available to businesses, offering faster, safer, and more efficient payment solutions that enhance the overall experience for all parties involved.

The shift in the payments scene is largely driven by technological innovation that enables access to customised payment services that were once out of reach. These advancements in payware technology are transforming digital payments by optimising speed, efficiency, risk mitigation, and user experience, presenting growing companies with significant opportunities to streamline their operations. However, many businesses have yet to fully embrace these possibilities, such as utilising virtual cards for accounts payables to unlock hidden value with minimal effort.

Virtual cards are 16-digit credit card numbers that are created at random and can only be used once for a predetermined sum. The term "virtual cards" refers to the fact that they are not tangible items like plastic credit cards. Vendors, on the other hand, treat them similarly to credit card payments so no further disclosure is needed to utilize them.

Virtual cards are often single-use and can only be used once for the approved amount. Some AP automation solutions, however, may produce multi-use virtual cards, which provide better control and security than standard credit cards while satisfying specific vendor demands. For example, for single use payments, this could be paying a supplier that you don't have a relationship with to limit the risk or to pay the monthly taxes. As a multi-use virtual card, this could be monthly subscriptions for SaaS platforms, like Google, Slack, etc.

Virtual card payments are intrinsically more secure than credit card payments or other forms of payment. Virtual card payments are also quicker than traditional payment methods and may be readily integrated into automated payment procedures.

Businesses are rapidly realising the value of implementing digital technology to minimise administrative costs. Payment digitisation is an essential component of that narrative. However, the majority of companies are at early stages of their digital journey. Some still utilise paper-based payment systems, while others may make payments online but employ inefficient processes that waste money. Businesses are realise that paper-based payments and manual procedures raise administrative expenses, create irritation to customers and suppliers, and put vital documents at risk.

Digital payments, on the other hand, may significantly boost profitability and development by providing:

Improved client service

Cost-cutting measures

Retention of records

Provide a competitive advantage

Various best practices contribute to the success of organisations that use virtual cards for payments:

Utilise Available Technology: By automating your AP processes, your firm may save time and money. Some digital solutions that improve efficiency include automatically emailing remittance data, electronically reconciling payments, and real-time payment status visibility.

Redeem Monthly Revenue Payments: When you pay with a virtual card, a percentage of the money, that is paid by the Merchant, goes to the transactional bank. Some banks or Fintech providers pass this over to you, and it is usually paid monthly.

Work with a Dedicated Enrolment Team: By encouraging additional suppliers to accept card payments as a form of payment, the AP department may increase efficiency and income. To encourage suppliers to participate in accepting card payments, enrolment staff should phone ahead of time and discusses the benefits of accepting card payments. With one of them being that suppliers can get paid more quickly.

For both sides of B2B transactions, virtual cards simplify and improve the AP procedure. They assist payers to avoid manual procedures and integrate seamlessly with automated systems. This decreases workload as well as expenses, which are boosted further by rebates and early payment reductions. According to recent research, firms that use automated AP automation may save up to 75% on expenditures.

Meanwhile, because physical checks are no longer required, merchants receive payments faster and with less paperwork and mistakes on their end. The COVID-19 epidemic has hastened the adoption of digital technology in almost every industry. Many sellers have grown to anticipate these sorts of payment alternatives, as well as the added convenience of being able to process purchases from any internet-connected device.

With virtual cards from Fyorin, your company can easily allocate spending power while still having an efficient way of monitoring and regulating expenses. Fyorin provides digital businesses with virtual cards that are capable of tracking expenses and subscriptions, simplifying reconciliation, and controlling company spending. By simply opening up a multi-currency account, your business will have access to unlimited virtual cards that can easily be linked to it, giving your company the freedom to use virtual cards anywhere online card payments are accepted.

If you want to find out more about how Fyorin can help your business, please do reach out to us at [email protected]