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6 Great Reasons for Accounts Payable Virtual Card Payments

In today's digital world, no one really uses checks regularly for their personal transactions. Ask anyone outside of the finance industry the last time they saw a paper check, and they'll more than likely tell you it was while binge-watching a 70s sitcom. The steps required to process check files are also dated.

In business, your advanced ERP may output the file seamlessly; there's just no getting around the folding, stuffing, and mailing unless you outsource that to a department with machinery to handle that for you. 

What if you could eliminate these old-fashioned steps by sending payments instantaneously and electronically — regardless of your ERP or Accounting System?

We have great news — you can! The solution is payment automation for business-to-business ePayments using virtual credit cards.

Already know what a virtual card (v-card) is? Skip to our 6 great reasons for using them. Otherwise, keep reading.

  1. Streamline accounts payable processes
  2. Reduce costs
  3. Earn cash rebates
  4. Increase security
  5. Improve internal control
  6. Better manage cash flow

Let Virtual Cards Earn $$$ for Your Organization

So, what is a virtual card?

A virtual card is a unique 16-digit card number that's created solely for a single-use between a payer and a payee.

One of the obvious benefits of the virtual credit card is pretty clear — it's virtual — and, therefore, it's highly secure, which protects the business that issues the payment. As the Payer, you predetermine the amount paid. As an added benefit, virtual cards are widely accepted by many vendors and suppliers that accept credit card payments. 

We're not alone in referring to the seemingly "antiquated-nature" of check issuance or touting the benefits and growth of virtual cards. An article by Mastercard, surveyed hundreds of executives in leadership roles in accounts payable (AP), accounts receivable (AR), payroll and treasury management and they agreed that the utilization of virtual cards is one of the most cost-efficient, easy-to-use, and secure methods of processing ePayments today.

The article went on to say that the use of virtual cards has been around for some time now and we continue to see exponential growth as businesses (large and small) discover the benefits. V-card use is expected to grow by almost 40% in 2019 alone. The number of companies making the move to virtual cards for payment processing will only increase in 2020 and 2021.

If you are is seeking a way to optimize your company's budget, time, and resources, it's key to learn more about how virtual credit cards can impress your Controller and CFO.

Before you break this news to the higher-ups, take the time to ensure you know the difference between purchasing cards vs. virtual cards. You may think the two are the same, but — spoiler alert — they're not.


Discover the differences in our on-demand webinar: P-Card or V-Card?

The next step is to familiarize yourself with these 6 great reasons your company should look into using virtual credit card payments.


Streamline Accounts Payable Process

Using virtual credit cards can replace outdated and cumbersome paper checks and the associated manual-process inefficiencies. With single-issue virtual-cards, accounts payable departments can focus less on processing payments and more on financial responsibilities. No more writing checks, stuffing checks in envelopes, and metering envelopes.

In addition to saving time, you reduce or eliminate the risks of human error with a streamlined accounts payable process through single-issued virtual cards. Basically, A/P departments can combat the challenges in the accounts payable process by issuing virtual cards.  



Reduce Costs

Virtual credit cards cost you nothing — in fact, you'll earn cash back on spend with monthly rebates. Really. When compared to the check, which most companies agree costs a minimum of $3.50 to $5.00 for mid-sized companies and from $10.00 - $20.00 for larger organizations, the virtual card immediately returns your investment in the program, if any was required.

Costs associated with check payments are for supplies like check stock, MICR toner, envelopes, and postage. Then there are the soft costs of the time and labor required to get them folded, stuffed, and posted to the mail. With the right payment automation software, you can eliminate most of your check payments by migrating some to V-cards and others to ACH as a back-up ePayment method. Both substantially reduce your hard and soft costs.  



Earn Cash Rebates On Monthly Spend

Wouldn't you be the company hero if you created a way for the company to earn extra revenue (cash) just by doing your job? With virtual credit cards, your company can earn cash rebates while paying your vendors or suppliers. For every dollar of virtual card payments, you have the potential to earn a cash rebate when you select the right program.

The more virtual credit card transactions, the more you earn back. Your CFO will be happy about creating the organization's newest revenue stream without really having to do anything. Do your research up front before signing a virtual card contract.

Most bank treasury programs don't pay cash back monthly. They hold the rebate for payment annually or worse — they require that you hit a certain minimum before paying rebates. You don't want that if you're seeking a tangible impact on your bottom-line.



Increase Security

Virtual credit cards provide much more security than physical credit cards. V-Cards allow you to pre-set the actual payment dollar amount and tie that payment to the invoices you are paying. The 16-digit card number is unique for each payment and is for single use only.

Since the card is not physical, it cannot be stolen or re-used. The card also expires once the maximum dollar amount has been spent. The CFO will appreciate the benefit of not having to provide vendors/suppliers with an open line of credit and bank on the fact that the risks of theft and fraud are significantly reduced with this innovative payment method



Improve Internal Control

Companies gain more control with single-issue virtual cards. Each virtual card is issued to a specific vendor or supplier for a specific dollar amount. The cards are then processed by the vendor in essentially the same way as a traditional credit or pay card payment, only without a physical card or open line of credit being provided.

With this easy-to-use payment alternative, purchases get automatically entered into the supplier Accounts Receivable management system without additional paperwork or manual re-keying when the right virtual card program is used. Along with more internal control, the CFO will appreciate that the A/P department has visibility to credit and cash management.


Desktop computer at a home desk with OnPay Solutions Payment Automation on the screen

Better Manage Cash Flow

It's often challenging to manage cash flow and the monetary requirements of a business. Companies have to pay vendors and suppliers a required payment during an agreed-upon time frame. During this time, things can get a little fuzzy when trying to determine what funds are available to the Accounts Payable Department.

When the right Virtual Card program is used, the system allows organizations of any size to manage cash flow through enhanced reporting with data capture.

Easy, instant reconciliation facilitates improved reporting on cashed virtual cards for internal transparency. This process makes the entire department more efficient because you no longer require a separate A/P analyst to account for the different payment types.  


Ready to Make the Switch? 

In today's economic climate, businesses need to evolve by using technology that can contribute to their success. Simply choosing the right vendor and/or supplier payment method can enable that success. 

Join the early adopters who are already streamlining operations, reducing costs, and improving security. You can do all of that, plus save paper, time, money, and provide added security for your credit payments by migrating to V-Cards. Not to mention, your company will earn cash rebates for each transaction contributing real dollars to the bottom line.    

Download Your Free eBook: Virtual Cards - When You Don't Use Them, You Miss Out On A New Revenue Stream

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Learn More About V-Cards


Originally posted September 2019. Updated for quality and accuracy May 27th, 2021.