Millennials do things differently. We build sustainable, fulfilling, and environmentally friendly businesses. According to the 2016 BNP Paribus Global Entrepreneurship Report, millennial entrepreneurs create 2.2 times as many businesses as their baby boomer predecessors. In 2014, Millennials launched almost 160,000 startups and made up nearly one-third of all entrepreneurs in the United States. According to Bruce M. Pfau’s article titled What Do Millennials Want at Work? published in the Harvard Business Review, millennial business owners disrupt the old ways of doing business in order to maximize performance. One significant way millennials shake business up is through virtual cards.
People ages 20 to 35 do business in a world of gray-scale hierarchies and ethereal technology. Instead of working our way up to that corner office, we want to build it ourselves. In fact, 67 percent of millennials report that they want to own their own business. Instead of the microwave or latest pager shaking up our lives, we expect technology to achieve instant results for a myriad of tasks, not just for meals and connection. This mentality combined with the early 2000s tech boom has bred a peer-to-peer, on-demand economy as well as the rise of connection through social media. The shift towards connectivity through tech has led to the virtualization of everything from holiday cards to dating. The millennial rise in the workplace contributes to a shift from analog processes to technology-assisted systems.
Virtualized item of the moment: virtual cards; the randomly-generated card number associated with your actual credit card. It’s shaking up the payments industry.
Just as virtual contact lists have replaced your mom’s rolodex, virtual cards replace checks and paper bills. They’re the new payment standard of entrepreneurs, CEOs and finance gurus everywhere. They’re the way millennials make secure, user-friendly businesses transactions.
Virtual Cards End Check Fraud
For years, businesses have used invoices and checks to pay for regular expenses. Even today, the American Fraud Prevention Electronic Payments survey reports that 51% of businesses use checks to make commercial payments. Aside from being inconvenient and old school, checks incur more fraud than other forms of payment. In fact, the National Check Fraud Center estimates $10 billion in losses from businesses each year due to check fraud. That number is expected to increase by 2.5% in coming years.
Fortunately, there’s a better way. Fintech busted Catch Me If You Can style check fraud, and now business owners can secure their payments through virtual cards. Implementing this new virtual payment style could effectively wipe out that hefty $10 billion annual loss from fraud and restore control to business owners.
How Virtual Cards Work
Virtual cards eliminate fraud and inconvenience because they are one-time-use and totally disposable. If checks are akin to waiting weeks to develop camera film, virtual cards are the snapchat of spending. Spenders can issue randomly generated virtual card numbers associated with their actual card, allowing them to spend money without sharing their physical card number. Users can also set a maximum charge limit on the randomly-generated virtual card number. This means online vendors or thieves could never max out your credit limit, because the spend limit on the virtually-generated card number maxes at the limit you set.
The online merchant knows no difference between a physical card and a virtual card (that is unless they try to treat themselves to a Hawaiian vacation and it backfires). Also like snapchat, the virtual card number disappears when you want it to–ideal for one-time-use, but available for recurring payments (kind of like how you can watch a 24-hour snapchat story as many times as you want). An online merchant can use the virtual card number to charge you for your purchase, but automatic deactivation ensures the spender’s safety from fraudulent piña colada charges. The unique account numbers on virtual cards deactivate after use–no more fraudulent charges, no more double charges.
Your Money Is All Over The Place
Today, automated payments such as Venmo and one-click checkout on Amazon make it easy for consumers to spend money on autopilot. Gone are the days of carefully mapping out a monthly budget; we live in a time where sending money across countries can happen instantaneously, and often impulsively. When making online purchases, filling out personal information, a card number, security number and billing address gives the customer more opportunities to second guess before clicking “make purchase.” But one-click shopping makes driving online sales increasingly easier for businesses as the process feels less like spending your hard-earned dollars, and increasingly resembles poking a friend on Facebook. The fewer the clicks, the more money consumers spend.
For business owners, virtualized shopping leads to more bills for systems, subscriptions, and other recurring costs. These costs add up to decreased visibility in spending. Automatic payments across various sites with multiple forms of payment flow out of the monthly budget in a small, often unnoticed stream. But like a leaky roof, the seemingly small nuisance can actually sink businesses over time as small monthly fees add up.
Virtual Cards Take Back Control
Virtual cards patch up your leaky roof by blocking automatic payments that fall outside the parameters you set. When spenders put a max spend limit on virtual cards, vendors cannot use the card number to charge you after it reaches the limit. Owners of the cards can also set the card number as one-time-use. This means the vendor can never replicate the randomly issued virtual card number for other purchases. These parameters drown all possibility of draining your funds, because no funds (outside of what you have designated beforehand) are available to drain.
With virtual cards, cancel at any time actually means cancel at any time–because trying out the book of the month club shouldn’t mean you have to pay for a year’s worth of novels you’ll never read. If you use a virtual card paired with a budget and expense budgeting app, you can cancel the form of payment directly, without going to individual websites to manage subscriptions.
Virtual Cards Offer Greater Security
Even more slimy than those pesky monthly payments, hackers strike fear into the hearts of business owners and consumers alike. With so many data breaches in recent years, tech security has never been more important. Some may assume that entering information online automatically increases vulnerability. However, virtual cards deliver an untappable line between merchants and consumers. Virtual cards eliminate the possibility of card-not-present fraud. If your Adobe (or TurboTax, or Amazon, or whatever services make your life easier) account ever gets hacked, hackers wouldn’t be able to use the information they find, because the card only works to make purchases of a pre-specified amount.
Fraud, uncertainty, and hidden charges are the budget-busting trifecta of building a millennial business. Bottom line: virtual cards translate to a seamless exchange of funds, while providing greater control, convenience, and security in business. Virtual cards put an end to millennial nightmares of uncertainty and lack of control. Say goodbye to hidden fees, transactions, and fraud, and say hello to seamless control of spending. #success.
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