What’s the Difference Between Credit Cards, Purchase Cards, and Virtual Cards?

Credit cards. Purchase Cards (P-Cards). Virtual cards. Aren’t they all the same? Don’t they serve the same general purpose? Certainly not. If you’re looking to enhance security, increase internal control, and earn rebates on your monthly expenses, you should know the differences between these three payment options.

What are credit cards, P-Cards, and virtual cards?
As a small business owner, you are likely most familiar with small business credit cards. They allow entrepreneurs like yourself to make purchases, pay vendors, and withdraw cash with ease. Usually, you can set limits on spending, sign up for activity alerts, and only share them with certain employees.

P-Cards, on the other hand, offer more control and service options than normal small business credit cards. This commercial card is normally used to make high-volume, but low-cost, purchases for your business. Employees who use them must follow certain guidelines during the purchasing process, such as monthly purchasing limits and established spending limits per employee.

Virtual cards, meanwhile, are unlike the previously mentioned card options. They are specifically designed to improve payment security, earn rebates, and give back control to small businesses during the payment process.

They are also rising in popularity around the world. According to research from First Annapolis, this innovative payment option may grow from $160 billion in 2018 to half a trillion dollars in 2024.

Not sure why you should choose virtual cards for your small business when compared to these other payment options? Here are a few benefits:

 

1. Virtual Cards are transaction specific.

Unlike the previously mentioned physical payment options, virtual cards possess a unique, 16-digit number that is only shared between you and your vendor. This virtual, single-use transaction enables better control over your payment process, as vendors cannot request above or below the set invoice amount.

In a matter of moments, you can send your virtual card payment to your vendor in one consolidated payment file and easily update your accounts payable records as soon as your vendor accepts the payment.

2. P-Cards and traditional cards have the potential for fraud, unlike virtual cards.

Without a physical card, there is far less potential for fraud, unlike P-Cards and traditional small business credit card offerings. You never have to worry about employees losing or compromising your business’s financial safety again because they won’t be responsible for carrying around or using physical cards.

Even if the virtual card is compromised, fraudsters cannot gain access to your accounts due to the pre-set spending limit and predetermined expiration date. With physical cards, you simply can’t have this high level of security.

3. Companies earn rebates on accounts payable payments with Virtual Cards. 

Virtual cards also offer rebates on accounts payable transactions. Similar to cash back options for consumer credit cards, your business will earn cash back every time you pay vendors with virtual cards. Essentially, the more you use virtual payments, the more rebates you earn.

As an added benefit, you won’t deal with interest rates, hefty processing fees, or have to meet minimum credit scores because virtual card payments come straight from your bank account, not credit.

Tired of traditional small business credit cards? Not sure that P-Cards offer the specific benefits your business needs? Consider switching to virtual cards today. Talk to our team at Paybaks to learn more.

Sign up by April 26th and receive 12-months of gold tier (.65% rebate) for free!

Use Promo Code: APRIL

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Back to Top

COMMITTED TO OUr community

There are many amazing people building innovative companies in Atlanta. Our goal is to inspire you by telling their stories. We hope you’ll enjoy these take aways from Atlanta’s most unique entrepreneurs.

See Spotlights

make money with us

let us help you

[email protected]

(770) 919-5848 (sales)

(770) 919-5846 (support)

5725 Buford Highway NE Suite 213 Atlanta, GA 30340

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