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What is the meaning of “virtual card”?
When people ask about virtual card meaning what they’re referring to is a set of 16 digits and a CVV code that are used as a credit or debit card to make purchases online or over the phone. However, the numbers are randomly generated, and the card isn’t a physical card but instead is only consists of the random numbers.
A virtual card number can be generated and used within a few minutes. It represents an associated credit or debit card, but the card number is useless if someone steals it. Once the number is used, it immediately expires and will not work to gain access to your money or to your account.
Who uses virtual cards and why?
Businesses and consumers both use virtual numbers to have more security when they complete online purchases or buy things over the phone. People use virtual numbers so that they can prevent themselves from falling victim to fraud schemes.
Businesses might also use a couple of other types of virtual cards to achieve different goals. Other types of virtual debit cards might allow companies to automate some of their accounting processes and to streamline their payments and expense management.
What are the different types of virtual cards?
The meaning of virtual card encompasses a few types of cards, including the following:
- Virtual debit, prepaid, or credit card
- Virtual procurement, p-card, or purchasing card
- Virtual ghost card
Virtual debit, prepaid, and credit cards are random numbers that are issued by a card company or generated in the cloud. The numbers are random and can be used to make secure purchases remotely. Virtual debit and prepaid numbers represent an account but do not allow access to it.
The meaning of virtual credit card refers to a set of randomly generated numbers that can be used only once to make remote purchases and are linked to a credit account while virtual prepaid and debit cards are instead linked to a deposit account. These numbers expire once they have been used. While they are able to be used for purchases, the numbers only represent the underlying accounts and cannot be used to trace back to the company or person or to the accounts.
To learn more about what is a virtual card, you can look at the definition of virtual card in the financial glossary. There are also many in-depth articles that you can review in the virtual card hub.
Benefits of using virtual debit or credit cards
The benefits of using a virtual credit card or a virtual debit card include fraud protection when you shop online or over the phone. If you are a business, the cards might offer added features that can help you to accomplish different business goals.
A consumer can request a virtual number from his or her card issuer and use it to make secure purchases on the internet. A business might generate a virtual number and use it to make one-off purchases on the internet or by telephone from suppliers that are new and that the business does not trust.
Businesses might also assign virtual numbers called ghost cards to individual suppliers or to departments within their organizations to track expenses and to streamline payments. P-cards might be generated and given to a few employees to make purchases over a set period of time.
How long does a virtual number last?
How long a virtual number might last will depend on the type of card that you generate. An online virtual credit card can be generated to make single purchases online, and the numbers will expire as soon as they have been used.
A virtual procurement card can be generated and given to an employee to make ongoing purchases for the company online or over the phone for the amount of time that you choose. The p-card can have restrictions placed on it so that it can only be used in the manner in which you have authorized it to be used.
A ghost number can be generated and given to a supplier so that the supplier can charge low-value items for the company to the provided number instead of invoicing the business for every single item. It can also be given to a single department for the use of all of its employees so that spending can be tracked by the department.
How can I send virtual payments?
To send virtual payments, you simply use your virtual credit card number or virtual debit card number online or over the phone in the same way that you would use a real card number. When you use the number that you have generated or that has been issued to you to make a payment remotely, the virtual payment will be routed back to the account that the number represents and is much safer than using plastic cards.
After the payment has been made, the number will expire. If you make payments with a virtual p-card, the number might continue to work over a set duration, or you might turn the card off after making the payment and back on again when it is time to make the next one.
How online virtual payments make it easy to categorize spending
Online virtual payments can simplify expense tracking when you make purchases online. You can generate a number to be used for a specific category of expenses and restrict the card to only make purchases in that category.
When the number is used to make a virtual payment for authorized purchases, the data will upload directly into the corresponding category in your bookkeeping or accounting software. You can generate different numbers to use for different types of purchases so that they are easily trackable. This can help you to see at a glance whether your employees are staying within your budget or if you need to make some adjustments.
Modernize your accounts payable department
Using virtual debit cards, p-cards, and ghost cards can help you to modernize your accounts payable department. Instead of relying on outdated systems for making payments, you can use these modern solutions.
Virtual card services allow you to restrict how the cards can be used by purchase category, time, location, and amount. The cards can be integrated with your accounting software so that the information from each transaction will flow directly into the correct expense categories. When you use these solutions, you can also avoid the transaction costs that are involved with the traditional purchase approval process.
Your employees can simply purchase low-value items that your company frequently buys with the cards without having to submit requisition forms and to wait for approvals. Your AP staff will be able to avoid processing the huge number of invoices that they would otherwise have to handle under a traditional system.
Virtual debit cards also allow you to create custom workflows and to generate expense reports with the click of a button. They also help to prevent manual data entry problems and bookkeeping fraud because the transaction data imports directly and instantly, making errors less likely to happen and fraud more difficult to perpetrate.
What is an API?
An API is an application programming interface, which is a set of protocols or instructions that tell different parts of an application how to communicate and what to do. A card API can be used to generate virtual numbers and p-cards from within your applications.
A developer can integrate an API with your proprietary applications. It can then be used to generate as many virtual numbers as you need within your applications. The numbers will be activated and ready for use within a couple of minutes.
What is a virtual prepaid card?
A virtual card that is prepaid is not an actual card. It is a randomly generated card number that represents an account and that can be used to make secure remote purchases. Once it is used, the number will immediately expire.
With these types of cards, you determine the amount to make available on the card. You are able to set it for the exact purchase amount. If a vendor tries to add more to the purchase price, it will be declined.
What is the difference between a ghost card and a procurement card?
A procurement card may be used by businesses of all sizes that want a convenient way for employees to make secure, authorized purchases for the company over the phone or on the internet. Businesses can restrict these cards to control the spending that can occur with them.
Ghost cards are generally used by larger companies. You can generate individual ghost numbers for each of the departments within your organization. The employees that work within a department can charge purchases for the company to the number that has been assigned to the department. The purchases are then charged to the department, allowing you to track expenses across your company. Both types of cards are types of virtual numbers that can be randomly generated with an API or from an application on your tablet, computer, or mobile device.
How secure is a virtual card?
Virtual cards are highly secure payment methods that can be used to make remote purchases. The numbers provide anonymity to businesses. If a thief manages to steal a card number, it will likely already be expired so that it will be useless.
The ability to restrict purchases on the cards to specific categories and amounts is also a great security feature. People who attempt to purchase something else or for a different amount will not be successful. This is a much safer payment method than relying on ACH transfers or petty cash systems.
How common is business fraud?
Business fraud is very common, making it important for you to take steps to prevent it from happening. According to a survey that was conducted by Experian, 63 percent of businesses reported that they suffered the same or more losses caused by fraud in the previous 12 months.
Using a virtual card can help you to reduce your risk of business fraud. You can use them to reduce your risk by always generating numbers to use online or with new vendors. You can also set restrictions on the cards so that you can prevent internal thefts and unauthorized purchases.
What is the best virtual credit card or debit card?
If you are searching for one of the best virtual debit cards, there are a number of features that you will want to find. A card issuer should allow you to set extensive restrictions to help you to prevent fraud and to track and control the spending that happens at your company.
A card service should allow you to limit the purchases that can be made by the category. You should also be able to decide how much money to make available on the card, and you should be able to control the amount of time that the number will work. You should also be able to restrict where the card can be used to specific suppliers or vendors. Finally, you should be able to turn a card off or on instantly with the click or tap of a button.
How to get a virtual credit card or debit card
Bento for Business offers a range of business card services, including the ability to generate virtual numbers on your mobile device, tablet, or computer or from within your applications using an API. The cards offer you a range of controls, including the ability to restrict them by time, location, purchase type, and amount.
You have the ability to see transactions as they are made in real time, and the data can be imported directly into your accounting software so that you can see exactly where your company is at whenever you want. You can turn individual card numbers off from your mobile device at any time. The company and its cards have earned it hundreds of positive reviews, and there is a 60-day trial period available to businesses. If you have any questions, call a customer service representative at 866.220.8455.