Think of a virtual credit card like you’re using your actual credit card…but with gloves. You don’t leave personal fingerprints and you can easily dispose of the “gloves” if they become tainted or compromised.
What is a virtual card?
A virtual card is a unique 16 digit card number tied to an existing credit card that can be created and used for one time or ongoing purchases without exposing the original credit card data. Security and control are both increased when using a virtual card over a physical card.
Virtual cards are used for digital purchasing, and are especially useful for one time purchases and subscription management. Most states use Divvy’s virtual cards for Amazon and Google Ads purchases.
A virtual credit card generator digitally creates a virtual card on demand to protect your data and to give you more control over who charges you, and how much money actually leaves your account.
How do virtual cards work?
The beauty of virtual cards is that anytime you need one, you can create one in just a few clicks. Not all credit cards offer virtual card creation, so you’ll need to check with your credit card institutions for availability.
Some credit cards allow virtual card creation through their digital app, and others will use a browser extension for online payments or purchasing. For example, with a Divvy virtual card, you can create either a temporary card for one-time use or a subscription card to use for recurring purchases.
You can do this by opening the virtual credit card app, selecting the budget you’d like to use, and creating the card by setting expiration and spend limits. You can check in whenever you want to see real-time spend and change the parameters you set for the virtual card.
Physical cards vs virtual cards
A physical credit card is the actual piece of plastic issued to employees to use for work-related spend. Some businesses may have just a handful of corporate cards which can be lent to employees on a temporary business based on need, or physical cards can be issued to each employee (which improves morale).
Physical cards are often necessary for in-person purchases and for travel in your organization.
Smart corporate cards sync physical purchases with software at the point of spend. Instead of swiping your card and then manually categorizing it in your accounting software, smart cards automatically sync with your expense management software to import each purchase, attach categories, and update budgets.
While having a physical card has its place, using a virtual payment card can make your life much easier and keep your data more secure. Virtual cards are safer, easier to control and cancel, and they’re more hygienic. How’s that for convenience?
Here’s a breakdown of the benefits of virtual cards over physical cards:
|Virtual Card||Physical Card|
|Unlimited credit card numbers||One credit card number|
|Easy to cancel one vendor/service without affecting all other payments||Cancelling card affects all services & subscriptions|
|Set spending limits & deadlines||Some cards offer spending limits|
|Online or over-the-phone usage||Can be used in person, online, over phone|
|Cannot be lost or stolen||Can be lost or stolen|
So what can using a virtual card look like for you and when should you consider getting one? These are major selling points of a virtual credit card you should consider.
Virtual credit card benefits
Online subscriptions can be difficult to manage. It’s hard to monitor what you’re being charged for, and when renewals or upgrades may happen. Subscriptions can also be a big security risk if one of the businesses suffers a data breach. Virtual cards can help solve all of those problems.
You can manage all your online subscriptions using virtual cards. Just use a new virtual card for each of your subscriptions, keeping it to one card per vendor. That way you can track all your subscriptions in one place, you’re protected if the card information is compromised, and you can easily see if you’re being overcharged.
With the additional controls that many virtual cards offer, like spending limits, card freezes, deleting cards, setting up a recurring payment, etc., you are in control anytime something with the subscription needs to change. And, if a certain vendor is trying to sneak in extra charges, or make it difficult to cancel their service, you simply delete the card. No more painful cancellation processes—just one click and you’re free.
Do your team managers need to provide lunch for employees once a month? Is your office manager in charge of stocking the supply shelves? Does your advertising team consistently overspend on their Facebook ads? You can set monthly budgets in their virtual cards to give them a secure way to spend as they need – but not beyond your budget.
If you are only going to make a purchase one time, say for a promotional sample, you can better protect your company’s credit card and offer a layer of security by spinning up a virtual credit card that can complete the virtual payment without leaving you vulnerable to extra or future charges.
Virtual credit cards and their linked budgets are an accountant’s best friend. It’s faster and easier to see exactly where spend occurred, who spent how much, and stop it as soon as possible when you notice overspending, overcharging, or fraud.
Is a digital wallet the same?
It’s important to distinguish between virtual cards and digital wallets. Many banks and credit cards are offering some type of streamlined online payment process that is designed to better protect your data and make purchases faster. But a digital wallet or information-storing technology is not the same thing as a virtual card.
Virtual cards are digitally created 16 digit numbers that are linked to your actual credit card without exposing the original data. Digital wallets are an online storage of your payment information that allows for one-click virtual payments.
Some examples of digital wallets are Visa Checkout, Masterpass, Chase Pay, Apple Pay, Google Wallet, Paypal, and other services that allow you to load in your account information and pay with just a click.
How to get a virtual credit card
Options are continuing to grow for virtual credit cards, but they still aren’t universally accessible. Currently there are just a handful of options, and some card issuers only offer personal virtual credit cards without a business option.
To get a virtual credit card, you follow the exact same process as most credit card applications. Apply for one of the following credit cards, making sure it allows for a virtual card option, and then enroll online or in their app to begin generating virtual credit cards for your use.
Who offers virtual cards?
American Express vPayment & AmExGo
American Express created vPayment as a business-only option that allows for a new virtual card creation for each transaction, with controls set such as expiration, budget, and merchant. The AmexGo app allows for the same measures but is more streamlined and hands-off for contractors, freelancers, and infrequent users.
Citibank virtual cards
Citibank offers virtual card creation for select credit cards – not all. Users must enroll in the extra feature online and then go through the steps in their Virtual Card Creation process to create a one-time use virtual number.
Capital One Eno
Capital One Eno is an interesting virtual assistant linked to a credit card. The technology is a plugin extension to be used on a desktop, making it very easy to quickly generate a virtual credit card number for an online merchant. Eno provides some customization, such as naming the card for the particular vendor, but does not provide budget limits. This means that for each purchase or vendor the limit is your existing credit card limit.
Divvy virtual cards
Divvy offers virtual card number generation to mask your actual credit card information and to better control spend. With Divvy virtual cards you can create a temporary card for one time use, or a subscription card for ongoing payments.
Manage business budgets easier
Businesses in particular are vulnerable to overspending and inadvertent access to funds. It can be inconvenient to hand over a corporate card for a one-time purchase of supplies, or you may realize that you’ve been paying for a software subscription for months after you thought you’d cancelled.
Businesses use virtual cards to maximize efficiency as well as to protect their best interests. The Association of Certified Fraud Examiners found in their 2018 report that internal fraud is “likely the largest and most prevalent threat” and can cost businesses an estimated 5% of their annual revenue.
Credit card fraud within your company is not to be taken lightly, but it can be managed through budgets and virtual cards.
You can track each purchase to an individual, set limits on the funds each individual can access, shut off cards with a click, and eliminate unauthorized charges by ensuring all purchases are approved by a budget owner.
Virtual card creation is immediately available to all Divvy customers for free, and can instantly empower all employees to spend as needed to keep your business running smoothly, without handing each individual the keys to the car, so to speak. Each employee can create virtual cards, but budget owners set the parameters to keep spending within reason.
Like other virtual cards, Divvy protects your data and provides the highest level of security for online purchases. We just make it more fun and easy in the process. Our virtual card creation takes just a click or two in our mobile app or online account and you’re on your way. Our virtual card creation offers customization in all fields – budget, expiration, approvals – that aren’t guaranteed with other virtual card creators.