What Are Virtual Cards (VCards)?
A virtual card is a form of payment that works like a typical credit/debit card. A VCard has a 16-digit card number, an expiration, and a CVV, but there is no physical card. It’s a computer-generated card number that is good for only 1 transaction and only for a specific dollar amount (e.g. $4375.37). Once the card has been processed, the card number cannot be used again.
VCards are designed for paying invoices that you’re currently paying with checks or ACH. They don’t replace purchase cards or physical credit cards.
Modernize Your A/P with Virtual Cards
Historically, when you receive an invoice from a vendor, payment is remitted by check or ACH. The Virtual Card was invented about 10 years ago because these payment methods are costly and inefficient.
VCards are created for a single transaction. The VCard is funded for a specific dollar amount – the amount of an invoice. If a vendor attempts to process the card for one penny more or one penny less than the amount of the invoice, the transaction will be declined.
More vendors accept credit cards than you might realize. 52% of vendors are willing to accept payment electronically, and VCards have been growing as an invoice payment method by more than 20% per year. In fact, companies spent over $100 billion using VCards in 2017.
Virtual Cards are becoming the preferred method for paying vendors because they turn a cost center into a revenue stream.