Tired of Checks? Vcards May be the Solution
Checks have long been the primary method of payment for small businesses. The problem is that checks are old technology. They expose your company to payment fraud; they’re easy to lose; they slow down the A/P process; and they fail to offer the same cash back incentives that larger business take for granted.
Enter the virtual credit card, a relatively new payment solution designed to replace checks. Virtual credit cards – or VCards – offer businesses cash back opportunities and added security so that A/P can become a revenue source. And virtual cards are not going away. In fact, their usage is growing almost 10 percent annually. Payments Source recently found that by 2021, virtual card spending is expected to surpass that of traditional purchasing cards and checks. If you’re curious about what updating your preferred payment method can do for your business, here are three reasons why you should make the switch from checks to virtual cards:
1. Fraud Protection
Payment fraud is a huge problem facing businesses of every size. According to the Association for Financial Professionals’ 2018 Payments Fraud Survey, a record 78 percent of all organizations were subject to payment fraud in 2017, a marked uptick from a decade-long trend, and writing checks were the main reason companies were left vulnerable to fraud. The AFP found, “Checks continue to be the subject of more fraud than any other payment method, with 74 percent of respondents reporting this form of attack. Wire fraud followed at 48 percent, while corporate card fraud ranked third at 30 percent.”
Unlike checks, with virtual cards, you never have to share your bank account information with your suppliers. That translates to decreased exposure of your company’s sensitive information and a lowered risk of payment fraud. Virtual card numbers are randomly created for one-time use and for a specific amount of money, thereby circumventing any risk of credit card fraud. Even if a thief did find an old card number, it would be completely useless to them.
2. More secure than checks
Forbes recently addressed the efficacy of virtual cards, noting: “They are cheaper than producing and mailing out physical checks or using ACH. Virtual credit cards are also more secure, serving as a buffer between your actual credit card details and the merchants you work with. No longer do you have to worry about someone intercepting your card details and running up fraudulent charges.”
With VCards, nothing is ever lost or stolen in the mail, so you and your suppliers can rest assured that your payments always make it where they need to be securely and on-time.
3. Cash back
In addition to shielding your company from payment fraud, virtual cards offer an added incentive: cash back. Now your company can turn a cost center into a revenue source. With Paybaks, you earn up to 0.75 percent cash back on payments made using VCards. That cash back can add up to huge cash flow increases for small businesses. A recent article in Forbes examined the benefits of VCard’s cash back programs, stating: “Businesses that leverage technology to manage finances are finding it can help them boost income as they struggle with rising business costs and a competitive labor market.”
VCards were designed to replace checks and solve all the problems inherent in outdated payment methods. Virtual cards will continue to become more popular in the next few years because companies benefit from the added revenue and security that VCards offer them.
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