What are virtual payment cards?
Communication Team
Communication Team

March 31, 2022

Share

What are virtual payment cards?

Think of a traditional payment device - say an old-school debit card: the card number, the cardholder name, the expiry date and for added security, the CVV code. And of course, the plastic.

Other than being digital, a virtual payment card is in fact very similar and can be used in many of the same ways: payments can be made in person, online or over the phone.

This tech was first marketed in the late 1990s by an Irish payment solutions company called Orbiscom; these early cards were designed to protect consumers from online fraud, protecting shoppers from unauthorised charges to their accounts because their primary account number (PAN) could no longer be stolen and misused.

Recently though, in the massive move towards contactless and digital, partly due to the pandemic, virtual payment cards have taken off, and this boom shows no sign of slowing. In fact, virtual card spending was predicted to top $1 trillion dollars by this year, 2022.

Businesses especially are finding benefits in virtual payment cards. In the past, one high-limit corporate card would be physically handed out to different employees and get used for countless transactions: a nightmarish scenario, open to fraud, theft and abuse. For many small businesses virtual payment cards have been lifesavers because of their security, convenience and the control they give businesses over their spending.

So what are 5 ways virtual cards can benefit your business?

1.Security

In the online jungle, danger lurks behind many purchases. This is because traditional debit cards can be cloned by hackers, or literally stolen and used to empty out the accounts they are linked to or, at the very least to make some contactless purchases sharpish before the owner realizes the card is gone.

One of the biggest advantages of virtual payment cards to businesses is the security they can offer. While virtual cards can be used to buy things online in the same way as a plastic card, they can’t be traced back to your account by hackers. This is because virtual cards protect your personally identifiable information (PII) by limiting what is shared about your account.

Also, because they aren’t physical things, they are virtually impossible to clone. There is no magnetic strip or visible card numbers, which makes it even harder for anyone to access the original account. Virtual payment cards can even be set at single-use cards, where they expire as soon as they are used, meaning that future fraudulent payments from the card are impossible.

And even if somehow the card details do fall into the wrong hands, there is no need for a panicked phone-call to your bank to cancel the card; it can be instantly deactivated at the calm touch of a button from your phone, before most criminals have decided what to use your card to shop for.

Since online card fraud really ramped up under the circumstances of the pandemic, with 11% of UK consumers reporting an incident of fraud in connection with their digital debit and credit card accounts in 2021 - not having to share card and account details to shop online is an absolute win for virtual cards and security.

2. Flexibility- easy to create and use

Because virtual payment cards are managed online, businesses can generate and activate new cards easily and instantly. No more waiting weeks for a single card to arrive in the post, followed a few days later by the pin number; no more losing or damaging cards and having to begin the process again while your expenditure is put on hold.

Cards can be created to best suit your needs; for example, one could be set up just for utilities, another for travel expenses and so on. This flexibility allows you the option to set up cards for specific events, say, ‘Victoria’s trip to London’ or ‘Office Party 2022’. This of course gives a business a lot more control over its spending, but more on that later…

The entire system is significantly more flexible than the ones behind plastic cards: because there is no need for credit checks or other time-consuming processes, you can have your new account up and running within a day, meaning you are almost immediately able to begin generating virtual cards.

3. Empower your staff/Free your business

Usually, a manager or the accounts department hold onto the company card. Anyone who wants to use the card for a payment is expected to go through them. Often, payment bottlenecks develop as the plastic card is passed around, and important purchases, like software updates, are be held up.

Virtual cards, on the other hand and to everyone’s relief, can be instantly issued to multiple team members, eliminating this problem, freeing up your business, mobilising and empowering staff, while at the same time giving you, the manager, more real-time control over your finances than ever before.

4. Control/ Accountability

So, how is it possible to free up your business’s spending and yet have more control over how money is spent? Well, when cards are generated, you have complete control over how the card will be used. For instance, its use could be limited to a specific website, or you could even restrict when it’s used within a specific time period. Cards can be set to use for a specific type of expense, and of course, a spending cap can be set for each card, too.

With this level of control comes increased accountability: because you are able to assign cards to individual staff members or for use with specific vendors or suppliers, you always know who is spending your money, where it’s going and why. Everything bought on a card is automatically processed, labelled and accounted for in your card management system- no more mysterious payments!

5. Easy reconciliation

Joy for finance teams! For many small businesses it’s still the case that petty cash or a business card requires a physical receipt. Finance teams (or you the business owner!) have to make sure that these tricky pieces of paper are all accounted for (they rarely are) or be faced with the nightmare of incomplete data.

With a virtual card, this issue is no more: there is no need for paper receipts; all the card’s transactions are digitally stored and can simply be exported to accounting software. No more receipts blowing around the office!

wamo’s virtual cards

wamo virtual Visa debit cards are designed specifically to make business easier. As a wamo business account holder you can issue as many virtual cards to team members or per project, event or whatever cash flow stream you like. You can also link each virtual card to a chosen sub-account (and you can open as many free wamo sub-accounts under your main account as you like.

To learn more about virtual cards, go here or chat with us.

© wamo 2022, all rights reserved wamo & the wamo logo are trademarks and trade names of wamo technology Limited and may not be used or reproduced consent of the owner

wamo.io LTD incorporated and registered in the United Kingdom under the company registration number 12352849 and the operational office of which is at WeWork, 199 Bishopgate, London EC2M 3TY. wamo operates the wamo.io website and the app. wamo is not a bank, the current account is an e-money account. Issuance of Electronic Money and payment services is provided by PayrNet Limited. PayrNet holds an amount equivalent to the money in the wamo current accounts in a safeguarding account which gives the customers protection against insolvency. We are authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 (register reference 922901) for the issuing of electronic money. wamo is an EMD agent of PayrNet.

© wamo 2022, all rights reserved wamo & the wamo logo are trademarks and trade names of wamo technology Limited and may not be used or reproduced consent of the owner