What are Virtual Credit Cards and How to Get One

Let’s face it, the business landscape has changed. More than likely, you have a larger population of employees working from home, without access to the office supplies or equipment they are used to having on hand. Your employees have likely been purchasing must-have items on their personal credit or debit cards for reimbursement, or someone on your team has been handling orders to home addresses. Either way, the process is cumbersome and inefficient. But what if there was another option.

Enter the virtual credit card.

>> Related: Mastering Corporate Credit Card Management Policy <<

As workplaces embrace a largely remote landscape, virtual credit cards provide an alternative to issuing employees a physical corporate credit card to cover expenses. If you’re unfamiliar, a virtual credit card leverages electronic, card-less account numbers to allow for secure online payments.

In this post, we will discuss the benefits of virtual credit cards for business use, how virtual credit cards work, safety and security features, as well as some of the most popular options on the market today.

What are the Benefits of a Virtual Card

There are numerous benefits associated with virtual credit cards, including, but not limited to security, control factors, and spend visibility.

From a security perspective, since the number is randomly generated and changes each time your actual credit card account is used for purchase, you have an additional layer of protection compared to using your actual credit card on the internet. If an online retailer is compromised, your virtual credit card number and other card details will be of no value to the fraudsters.

With a virtual credit card you are able to create spending limits and expiration dates for the virtual cards, similar to physical cards. However, the expiration date window can be much shorter—good for a few days or a week, even. This is a great option for remote workers or contract employees. Virtual credit cards also eliminate the wait times to get a physical credit card sent to an employee and the risk of it falling into the wrong hands. We’ll talk more about how easy it is to issue a virtual credit card number later in this post.

A favorite for finance teams, by eliminating the use of personal cards, you will also have better visibility into spend and the reconciliation process. This will make the process far more streamlined as transactions will be on one report and it will be clear who made each purchase.

What is a Virtual Credit Card Number

Virtual card numbers aren’t that different from a physical credit card. It includes the normal 16 digits, expiration date and security code of a regular credit card. However, from a security perspective, virtual credit cards offer an additional layer of protection as the “number” issued enables you to conduct online transactions to your main account, without actually utilizing or entering (exposing) your actual credit card number.

How Virtual Cards Work

A virtual credit card serves as a veil between your credit card account and the merchant or retail outlet. If a vendor has a security breach and card numbers are compromised, the theif will not be able to utilize your information for credit card fraud as the number will be dead.

On the downside, virtual credit cards can only be used online or over the phone as there is no tangible card to swipe at a physical retail location. However, if the virtual card you are using syncs to Apple Pay or Google Pay, and the retailer accepts that form of payment, then virtual card holders will be able to use it more widely, including for contactless in-person payments.

Now, virtual credit cards can be a bit more of a hassle to shop with compared to a physical credit card. When you are ready to checkout online, go to your virtual credit card’s website or have the extension downloaded to your browser. A single-use token will be generated that includes a virtual number, security code, and likely an expiration date. Once you have this information, enter the information and check-out as if you were using a physical credit card.

Are Virtual Cards Safe?

In short, yes. Since virtual credit cards have a single-use number that changes with each transaction, the chances of account fraud, cloning, or hacking are extremely low. Further, you will know which employee is making purchases as the number assigned will be unique—no more instances of several employees leveraging the same corporate credit card number.

Virtual credit cards also reduce the amount of personally identifiable information (PII) that is being shared. Compared to physical credit cards, the virtual option is a great tool for security and privacy protection.

Popular Virtual Credit Cards

As virtual credit cards gain popularity, many of the larger banks and credit card companies are offering a virtual credit card service. There are also third-party virtual credit card issuers that will work hand-in-hand with your existing credit cards to allow a virtual option. Some of the most popular options include Capital One Eno, Masterpass by Mastercard, American Express Go, Citi Virtual Account Numbers, and U.S. Bank Instant Card®.

Speaking from personal experience, the TravelBank team has had a great experience working with the U.S. Bank Instant Card®. We like that the platform allows for payment flexibility, that it is easy-to-use and that funds are immediately available.

How to Get One

Since virtual credit cards are linked to an existing credit card account, having a credit card is required. You will need to login to your online credit card account and navigate to your account settings.

Each credit card issuer has slightly different procedures when it comes to setting up a virtual credit card number. For instance, Capital One and Citibank create new virtual card numbers every time a request is made. With Capital One Eno, you simply add a browser extension and click the button when you’re ready to checkout and a unique number will be generated when you are ready to pay.

Follow the prompts to generate your virtual credit card number, select an expiration date and a spending limit, then assign it to a specific employee. From there, process the request and the credit card information will be pushed to the recipient.

For the purposes of this post, let’s walk through the set-up of the U.S. Bank Instant Card®, which can be done in three easy steps:

1. Enter basic recipient details such as name, email, phone number, and optional employee ID number. You can set both the credit limit and expiration date.

2. Send the Instant Card through the web portal or via the Instant Card app. The virtual card recipient will get an email notification with instructions on how to access their Instant Card.

3. The recipient is now able to view account details and their account information on their smart device or add it to their Apple Wallet. The card number is now available to make an online purchase.

Final Thoughts

Initially, increased data breaches and the need for enhanced security spurred interest in how transactions could be conducted more securely—the catalyst for virtual credit cards. Based on the office landscape we were unexpectedly faced with in 2020, this innovative approach to secure payment has been a lifesaver as employees shift from in-office to remote work and have an entirely different set of purchasing needs.

If you have yet to look into a virtual credit card option for your employees, we highly suggest you check them out. Your finance team will thank you and you’ll rest easier knowing that there is a divide between internet thieves and your actual credit card number.

Have questions or want to discuss the merits of the various virtual credit cards on the market? Let’s chat! Click here to schedule time with the TravelBank team.