How are virtual cards more secure than physical card?
Physical credit cards have become a part of our daily lives. We all know what it is, how it works, and what are the benefits we enjoy from it. With the evolving technology physical credit cards have also advanced to fulfill the ever-increasing needs of the modern world.
With the shopping benefits entailing the use of credit cards, it is obvious that most of us prefer to use them. We generally enter credit card details into shopping websites and apps which are memorized for our ease. However, this increases our vulnerability towards card frauds and security breaches. To avoid such data leaks more secure ways for transactions were being considered.
Moreover, virtual credit cards are beneficial not only for individuals but also businesses. Business owners usually give their employees access to corporate expense accounts without any physical credit cards. Hence, virtual credit cards have proven to be an ideal way to keep an eye on all transactions.
This card is connected to the account of the institution issuing the card. This means that you don’t need to open a special bank account. This type of card is given to third parties for typically gift purposes.
This is a payment tool in which the amount for the purchase made from the credit card is not deducted from the cardholder’s bank account. Instead, it is subtracted from the credit limit granted on that card by the bank or any other credit institution. Credit cards are generally essential for building a credit score and history which is beneficial while applying for loans.
This is another payment tool used for purchasing goods and services. These cards can also be used to accept money such as salary. However, unlike credit cards, the amount of purchase is not withdrawn from the limit granted, instead, it is deducted from the holder’s bank account or any other prepaid account of the cardholder.
Physical cards are plastic cards issued to employees by a company for official business pending purposes. These cards have traditional card features like cardholder’s name, card number, magnetic strip, CVV, etc.
Also, these cards can be used for both online and offline purchases but you do not have complete control over these cards, you will always have to contact your bank for any information or concerns.
Virtual cards are similar to physical debit and credit cards in functioning but the major difference is that virtual cards exist only online. However, these cards also have 16 digit card numbers, card verification numbers, and expiration dates.
The major benefit virtual cards have is that you have full control over these cards, you don’t have to depend on your bank to take any action on the card.
Virtual cards are immensely secure in comparison to physical cards for the following reasons.
- With Virtual cards you get the feature to set spending limits. This means that every virtual card you use for your business can have a maximum spend limit and any transaction above that limit would simply be canceled. If the card is somehow in the wrong hands. Your money will still be safe.
- Unlike a physical card, virtual credit cards cannot be stolen or lost. This is because you carry a physical card everywhere with you and there are high chances that anyone can easily slide it out of your pocket or wallet. However, as virtual cards have no physical presence it is impossible to steal them.
- Online virtual cards are valid for a limited time period only. Every card is created online has limited validity depending on the card provider. However, the credit limit and validity time differ from bank to bank. However, this is not the case with physical cards, they do not have to spend a period.
- As you have complete control over virtual cards, you can block or freeze these cards instantly. Whereas if your physical corporate credit card is stolen or lost or in the wrong hands you will have to go through the long procedure of first contacting your bank and then waiting for them to process your request and then block or freeze your card.
- Virtual credit cards are subjected to Payment Card Industry Data Security Standard (PCI DSS). This means that these cards adhere to a set of policies and rules specially designed to protect credit or debit transactions to prevent the cardholder from the misuse of personal information.
- With vendor-specific cards, you can assign each vendor a specific card. Since you don't have to use the same card for other vendor transactions, it will be much easier to track all the transactions. If different people are using the same card for payments, there are chances that some fraudulent transactions might happen through the card and it will be a tedious task for the accounting team to track all these transactions as well.
One of the major benefits of virtual cards is that you get better accountability over your business’s money. As you get the facility to issue virtual cards to specific vendors, you can always keep a track of all the transactions and see where your money is going. Any purchase made against the card is automatically recorded into your card management system.
This, in turn, helps you reduce a significant amount of time that is spent in chasing and tracking all expense receipts. Each payment is allocated under the exact team member who made the purchase so it becomes easy to track the money and reconcile the transaction.
Virtual cards are extremely easy to create. Unlike physical cards, you don’t have to go to banks, get documents processed and then wait for the card to arrive. After choosing a virtual card provider for your company, just with a few clicks, you can create a virtual card.
Along with this, after creating the card you can instantly start using it. Allocate funds to the card, assign it to specific members or vendors, use it for subscription management if you want, and voila your virtual card is effectively making your life easier.
Any purchase made with virtual cards is automatically recorded into the expense management system, eliminating the need for any paperwork. This lets you track, record, and reconcile every transaction which relieves your team members from the monotonous task and also reduces the need to write off unaccounted purchases. In turn, your Accounts Payable process is also automated and purchase orders, invoices, and financial transactions are automatically reconciled.
As every transaction is automatically recorded and reconciled, there is no scope for human error in the process. This means that all the card data and information is accurate. You get better insights on your business money spending as every transaction is recorded under the name of the person who made it and for what purposes. With this, you can analyze all the expenses your company incurs and accordingly plan your finances.
Volopay is your destination to get instant virtual corporate credit cards for your business. We give you the facility to issue virtual cards for each member of your team and also assign specific cards to each vendor of your business, along with the ability to control the spend limits of the virtual cards.
Virtual cards themselves are a secure way of money transaction but in Volopay you get advanced protection on your virtual credit cards with a two-level approval process, spend limit specifications, and time limit control.