Corporate cards

Virtual debit card - What is it and how to get one?

Apr 05, 2024

A traditional debit card is one of the most commonly used tools to make transactions. The whole concept of being able to spend your money without having to carry cash became popular when debit cards were introduced. Debit cards also turned out to be beneficial for businesses, as the team could make spends directly from the company funds. No reimbursement hassle. 

A better-upgraded version of this already amazing tool is the virtual debit card. Virtual debit cards are similar to conventional ones; however, the difference arises in terms of tangibility. Virtual debit cards are not tangible. These cards can be accessed through your smartphone. Keep reading to learn everything about virtual debit cards.

What is a virtual debit card?

The digital version of conventional debit cards is known as virtual debit cards. These can be issued through your bank or other financial service providers. Virtual debit cards cannot be used to make ATM withdrawals. 

Barring that, all functions of these cards are similar to the normal ones. It can be used to make online spending.

With the new card machines in outlets, you just have to keep the virtual card open on your phone and swipe it across the machine, and voila, payment is made. Just like the traditional debit card, a virtual debit card also has a 16-digit card number, CVV number, cardholder's name, expiry date, etc. 

Differences between traditional debit cards and virtual debit cards

1. Issuing process

To get a traditional debit card, the business is required to fill in the application to get a debit card. Along with the application, there are various documents related to the business. Then the application is processed, and then after a few days, you get the debit card.

However, virtual debit cards can easily be activated through your mobile banking app. Just a few formalities have to be done with the bank, and you can immediately start using the card just after activating it. 

2. Type of the card

The very basic difference between traditional debit cards and virtual debit cards is tangibility. Conventional debit cards are physical and made of plastic. You can swipe them anywhere and use them for ATM withdrawals.

On the other hand, virtual debit cards are intangible and can only be accessed from your phone. It exists in a virtual space. 

3. Security

As traditional debit cards have to be carried around, there are chances that you might lose or it might get stolen. However, with virtual debit cards, the case is different. Virtual debit cards cannot be stolen or lost.

Plus, these come inside a mobile app that also gives real-time transaction updates. This means better security as you will immediately know if some unauthorized transaction has been made through the card.

4. Fee structure

To get virtual debit cards, banks and some other providers charge a monthly or annual fee.

Plus, if the virtual debit card supports international transactions, you will have to pay the conversion charges. But these charges are greater for traditional debit cards. Virtual credit cards are comparatively cheaper.

Suggested read: What is a virtual credit card and how to apply for one?

Types of virtual debit cards

1. Single-use virtual debit cards

Single-use virtual debit cards are burner cards. This means these cards can only be used to make one payment. Once the payment is made, the card will not be valid anymore. You get the option to set these cards are single-use, like when you want to make a one-time payment to a vendor or a big investment.

2. Multi-use virtual debit cards

Multi-use virtual debit cards are opposite to single-use cards. Multi-use cards are used to make recurring payments. This virtual debit card type can be used to make subscription and regular vendor payments.

You can set spending limits and validity periods on these cards. Along with this, you can set the payment cycle duration as well. Every month a certain amount of money would be transferred to the vendor. 

How do virtual debit cards work?

Virtual debit cards can be seen as the digital of traditional physical debit cards. However, virtual debit cards are not connected to the physical.

Instead, it is a tool with a card number, CVV, and other card-like features that helps in making contactless payments. You can activate your virtual card through the bank app or the application provided by the card company. 

When you activate your virtual debit card, it is like generating a unique 16 digital card number, CVV, expiry date, validity period, etc. The virtual debit card has to be connected to a source of funds like your bank account or fin-tech account.

You can set expiry dates, use limits, spend limits, transaction control, etc. You are basically utilizing your own company funds just through a digital tool. 

Looking for virtual cards to manage your business expenses?

Benefits of using virtual debit card for business payments

Improved accountability

Virtual debit cards are accessed through a mobile app provided by your bank or whichever card provider you have chosen. This is an extremely beneficial feature as all transactions made through the card would be automatically shown and recorded in real-time.

Meaning the manager and team leads will always have all the information related to each transaction. They will know who is responsible for which payment and where the money is going. Whereas with a traditional debit card, the only tracking option you have is the card statement.

Streamlined AP process

The AP process requires accurate transaction and remittance information. With a virtual debit card, there is no limit to storing that information.

Hence, all the transaction-related details will be readily available to process early into the payment procedure. This kind of a step-ahead terminates the need for manual processing and significantly increases the AP reconciliation process. 

Better flexibility

Virtual debit cards can easily be used to make all kinds of payments. Plus, if your chosen card supports international transactions, then even better.

Rather than carrying around the physical debit card and withdrawing cash to make payments wherever a card swipe facility isn’t available, it's better and more feasible to use virtual debit cards. Just enter the card details into a site or payment application to make transactions. It's that easy.

Furthermore, if you use a smart virtual card provider like Volopay, you can make payments right from the app with just one click.

Improved tracking

Traditional debit cards can never support the need for instant tracking and recording of expense information.

However, with virtual debit cards, as and when a transaction occurs, it instantly shows on the screen and is recorded in the system. Plus, some virtual card providers also let you track your payment status.

For example, if you send money to a manufacturing vendor, you will know the status and progress of that payment and when exactly it reaches the receiver. 

Enhanced security

With two-factor authentication, a one-time use limit, and instant block or freeze control, virtual debit cards already have extra layers of protection.

Plus, all virtual debit card applications are designed with bank-level security measures that are anyways difficult to surpass. You get an extremely tight level of security from both internal and external threats.

Hassle-free payments

Another amazing benefit of virtual debit cards is the ease of making payments.

With just a few clicks, you can quickly make online payments either directly through the provider app or enter the card details on the vendor website and click okay! It is that easy. 

Better spend control

One of the major characteristics that make virtual debit cards superior to traditional ones is spending control. Virtual debit cards allow the user to set a limit on the spend amount, specify the category of expenses, request approval for transactions above the limit, and also to update the limit.

Along with this, certain platforms allow you to connect the card to a specific budget or expense policy through which the expenses are already laid out and under control. 

Improved tracking

As all the transaction and expense information is displayed and stored in real-time, there is no way a transaction detail could get lost or altered. This means that the whole expense management process of manually collecting receipts, processing the information, correcting errors, and reconciling the expenses all gets sped up.

All the expense details can be accessed with just one click. Plus, spend controls act as a bonus to help streamline expense management. 

How to get a virtual debit card in India?

If you choose to get the virtual debit card through the bank, you can apply for it either on the website or the mobile app or directly contact the bank. You must have an account in the bank to which the virtual debit card will be connected.

On the other hand, if you decide to get virtual debit cards from another financial platform like fin-techs, you have to have an account on their software. Once you have an account, you can either ask the provider to activate virtual cards for you.

Or many software allows you to create and activate virtual cards on your own. It is pretty simple and easy. 

Discover the power of virtual cards with our article on virtual card use cases. Explore the versatility, security, and efficiency of virtual cards in streamlining payments and boosting business growth.

Step-by-step guide on how to get virtual debit card

How to get a virtual debit card?

1. Research and choose a virtual debit card provider

There are many virtual debit card providers in India. Each of them will have their own pros and cons. You want to research each provider that you’re considering thoroughly, looking at various factors such as fees, security measures, supported currencies, and countries, as well as checking existing customer testimonials.

2. Choose the right provider

It’s also important that you consider what your business needs are before you go with a particular corporate credit card provider.

Once you’ve decided what your requirements for a virtual debit card are, you’ll want to see which provider can meet most if not all of your needs. Different businesses may need different things.

3. Signup/register

After you decide on which provider you want, you’ll have to apply for your cards by signing up with the provider.

Usually, the first step to do this is to contact the salesperson from your provider of choice. They should be able to guide you through the process of signing up.

4. Verify your business identity

The next step after registering is to verify your business identity. To do this, you’ll likely be required to provide some documentation, including your proof of identity, business licenses, and many others.

You’ll then have to wait for the KYB process before the provider can confirm and open your account.

5. Add funds to your virtual debit card

Once you have your account set up, chances are you’ll have access to a business account to fund your virtual debit cards.

Make sure that you add funds before you start generating and issuing cards. Keep in mind that you won’t be able to use your virtual debit card when funds run out.

6. Set security measures

If you’ve picked a virtual debit card provider that meets your business needs, chances are you’ll have the security measures and control features you wanted.

Make sure that you’re utilizing these features. Customize what you want your cards’ spend limits to be. Set up two-factor authentication for your card management platform if possible.

7. Activate your virtual debit card

Generate your virtual debit card through the card management platform. Unlike physical cards that require you to order them and wait a few days to receive them, you’ll be able to get your virtual cards instantly.

Even activation is easy. In just a few clicks, you’ll be able to activate your virtual card through the dashboard.

8. Assign to your employees

Each virtual debit card you generate needs to be attached to a cardholder. When you create a card through your card management system, you’ll need to assign it to an employee.

This individual will be responsible for the transactions made on that particular card and will be required to make the corresponding expense reports.

9. Monitor and manage your virtual debit card

Once you have issued cards to your employees, you want to be sure that you’re monitoring your virtual debit card usage. Use in-built spend controls to manage your employee spend limits.

You can also view card transactions from anywhere, especially when they are automatically recorded on your card management platform in real-time.

Issue unlimited virtual cards for your employees instantly

Best virtual debit card in India for businesses

1. Volopay prepaid virtual card

Get access to unlimited virtual prepaid card with Volopay. Upon creating a Volopay account, you’ll be able to top up your account’s funds and use that to load all the virtual cards you generate.

Creating cards, making transactions, and reporting expenses are all easy with Volopay’s user-friendly all-in-one platform.

2. Stripe virtual card

Stripe offers a platform that allows you to generate virtual cards for your business. While originally positioned as a cards partner that you can build a program with, you can also use Stripe to generate virtual cards for your own business.

Issuing cards is easy and managing your card expenses can all be done through the Stripe API.

3. Open Money

Make managing your SaaS expenses easier with Open Money. You can create a unique virtual card for each subscription you have, enabling simplified payment and tracking processes.

Every expense you make on your virtual card will be automatically recorded to increase your transaction visibility in real-time. Set monthly card budgets for better control.

4. SBI corporate card

With SBI’s virtual corporate card, you won’t have to worry about exposing your Primary Account Number. Instead, you can generate a virtual card whenever you need one, allowing you to use it without needing a physical plastic card.

Get customized transaction controls with SBI and adjust merchant categories, spend limits, and many more.

5. HSBC virtual card

HSBC’s virtual debit card comes with access to the bank’s online reporting platform, MiVision.

Expense management will be much more simple with HSBC virtual cards, allowing you to generate unique account and card numbers for each transaction that you make. Everything is plastic-free and linked directly to your reporting platform.

Features to look for when choosing a virtual debit card for your business

Virtual debit card features

1. Ease of issuing the cards

Virtual debit cards are easy to get. Unlike physical debit cards, you are not required to apply for them or submit tons of documents every time you want a card. 

If you choose virtual debit card providers like Volopay, then you are required to have a business account on the platform.

While choosing a provider, look for one which allows creation of both virtual and physical cards.

2. Real-time monitoring

The next important feature to look for in a virtual debit is real-time expense tracking. The virtual debit card must be connected to an expense management system or an application that can provide the user with instant transaction updates.

The where, when, and what of all the expenses should be tracked and recorded in the software. This would help to know if any unauthorized transaction was made through the card.

3. Integration with accounting software

To ease up the financial processes for your business, it will be extremely beneficial if your virtual debit card comes integrated with accounting software. With platforms like Volopay, virtual cards are connected to accounting systems like Netsuite, QuickBooks, Tally, etc.

With this feature, all the real-time recorded transactions are auto-categorized and entered into the accounting sheets. All the time and effort spent on manual data entry get eliminated. 

4. Multiple card creation

Various virtual debit card providers and many banks allow their users to create multiple or unlimited virtual cards. Some banks allow 3 virtual cards on every physical card. Some provide a certain number of virtual debit cards per business. Whereas some other fin-tech platforms offer the facility to activate unlimited virtual cards.

According to your business requirements, choose the one which can give you the most flexibility. You can a lot of these virtual debit cards to various employees. This terminates the hassle of reimbursements. 

5. Accessible through a mobile application

Being a digital tool, virtual debit cards must be accessible through various devices. Most essentially, the virtual card must be accessible through a mobile application.

Employees might not carry their laptops everywhere or might not be able to login into their laptops every time they have to make a business payment. Hence, a mobile application is much for feasible and convenient. 

6. Transaction categorization

The next essential feature of a virtual debit card is transaction categorization. Virtual cards that are connected to an expense management system allow the user to set categories for transactions. These include marketing, tech, travel, payroll, etc.

Also, the system simultaneously catches the expense patterns and types and customizes them accordingly. With this feature, tracking and management become effortless, as all the expenses are auto-categorized and filled into the accounting sheet correctly. 

7. Customizable spend controls

Yet another amazing feature of a virtual debit card is the customizable spend controls. Virtual debit card holders can set the amount up to which transactions can be undertaken. This means that any expense under the ceiling limit will be approved automatically.

However, any transaction over that limit will not be processed, and approval will be required. Along with this, the cards can be connected to a department, budget, or project. 

8. Easy card management

If your business uses multiple physical debit cards, it can becomes difficult to manage and keep track of all expenses. However, virtual debit cards are different in this matter. With everything automated and digital, you do not have to worry about missing receipts or miscalculations.

All transactions made through the various virtual debit cards are collected and stored in one database which makes card management hassle-free.

9. Fraud protection

Digital tools have now become ever safer and more secure. Virtual debit cards are no different. With two-factor authentication, real-time expense tracking, instant block and freeze option, and bank-grade security-coded application, there is nothing that can breach through.

When you choose a virtual debit card, make sure to gain all information about the protection tools used or provided by the platform. 

Tips to manage and monitor virtual debit card transactions

1. Regularly review transaction history

You’ll get a card management platform with your virtual debit cards, which will automatically record transactions your employees make on cards.

Make sure that you’re making use of this feature and doing regular reviews of your employees’ transactions. It helps you monitor whether or not your employees are spending within the budget.

2. Categorize each purchase

To make it easier to monitor and reconcile your transactions, you should categorize your purchases. Many virtual card providers will offer features that allow you to sort transactions automatically.

All your employees need to do when reporting expenses is click on a category, which will then be reflected in your ledger.

3. Set spend limits

After you figure out how to get virtual debit card, you want to be sure that you know how to utilize them properly. This includes setting spend limits on your card.

Doing this ensures that all transactions made on a particular virtual debit card are within your budget even if you have a larger pool of funds.

4. Set transaction notifications

It’s good practice to set transaction notifications to give you an easier time monitoring them. While you may not want alerts for every single transaction, you can set up notifications for transactions that are above a certain threshold. You won’t have to worry about unauthorized transactions of large amounts. 

5. Enable two-factor authentication

The answer to how to get virtual debit card is by generating and issuing them through your card management platform.

For this reason, you want to ensure that you have two-factor authentication enabled on your platform. This guarantees that only authorized users can access the platform, create new cards, and block any compromised ones.

6. Report lost or stolen cards immediately

Make sure that all your employees know what to do when a card gets compromised. It’s important that any lost or stolen card is reported immediately, especially because you would want to freeze or block the card as soon as possible. This ensures that no future unauthorized transactions happen on the card.

Why is Volopay virtual cards the #1 choice for businesses?

Volopay virtual debit card features

1. Card security

Volopay virtual debit cards are becoming more and more popular, and one of the reasons is the high-tech security offered. The admins on the platform can create virtual debit cards and assign them to employees, departments, or projects. This means you will always know who is responsible for which transaction.

Along with this, real-time transaction tracking, two-factor authentication, and instant block and freeze features make Volopay virtual cards extra secure.

2. Superior support

One of the major problems companies face with card and financial software providers is customer support. Volopay proudly surpasses all expectations and assures customers with superior and active customer support.

Any problem can be either reported using the chatbot or directly to the account manager connected with them. Volopay account managers always make sure that all your issues and problems are resolved asap. 

3. Unlimited virtual cards

One of the most amazing features provided by Volopay is unlimited virtual cards. Once you have a Volopay business account, you can create as many virtual cards as the business requires. You can create virtual cards for all departments, head employees, projects, vendors, etc. With Volopay, you can even automate your vendor payment process. Read our article on vendor payment automation to know in detail.

Plus, there are no charges for creating these virtual cards. This feature makes expense management easier. 

4. Spend analytics and real-time tracking

Talking about the best management features offered by Volopay - spend analytics and real-time tracking. The Volopay platform tracks and records all the expenses and money movement made through the system in real-time.

All this information is sorted and stored in one centric database. You will have minute-minute updates about all the company funds and transactions.

Along with this, you also get analytics features that show the company’s spending patterns, overall expenses comparison, etc., in the form of charts and graphs.

5. No hidden charges

To avail of Volopay services, you are clearly communicated with the prices and module options. No service or feature costs, hidden charges, or extra fees.

Everything you pay to the company and every transaction you make through the platform is completely transparent. You will know the status of that payments and also a detailed breakdown of whatever amount you are paying. 

6. Centralized dashboard

As stated above, all the movement in the platform is tracked and recorded in a single database. So all information and all features of Volopay can be accessed through its centralized dashboard. The dashboard has icons for all the features and is extremely convenient to use. Everything can be accessed with just a few clicks.

7. Easier reconciliation

The Volopay software and cards are comprehensive and tightly integrated. This means that all the transactions also get automatically updated in the company’s accounting books.

So all the hassle of collecting receipts, matching the information, categorizing it, and manually entering it into the accounting books is all gone. Reconciliation becomes easier with Volopay. 

8. Instant virtual card issuing

As Volopay allows the customer to create as many virtual cards as they want, it also provides instant activation. You can create a virtual card any time of the day, upload funds into the virtual cards, and start using it immediately. No waiting for approval or application submission. 

9. Set custom controls

The Volopay virtual cards come with customizable feature options. This means that you can set spending limits on each card and also assign whether it will be a corner card or a recurring payment card.

You can also set a payment cycle for subscription-type payments and make transactions in international currencies by setting the currency of the card.

Plus, you can assign who is allowed to use the card and what functions that person is allowed to use. 

10. Easily map every receipt to the payment made

All payments and transactions made through Volopay cards are instantly recorded. With this, you can easily access the database and know which payment was made, when, who made it, and what was the purpose of that payment. You can map out the whole start to end of the payment. 

The only corporate card you will ever need