Original published on May 26th, 2015. Updated on October 3rd, 2019.
Virtual Cards are not new to the U.S. Marketplace. As a matter of fact, they have been available for use for more than 10 years. Despite the more secure nature of virtual cards and the ease of use for both buyers and suppliers, many large corporations still prefer paper checks and ACH. Some businesses aren't utilizing Virtual Cards at all, while others are using them for everything, from payment processing to online purchases and business expenses. A recentarticleon Finextra states that,"According to Yahoo Finance, the virtual card market was $85 billion in 2015. In 2018, the market grew to $160 billion. By 2024, it’s predicted that the virtual card market will balloon to $500 billion."
So, why are some businesses still hesitant to hop on board the very lucrative Virtual Card train? U.S. President Woodrow Wilson said, "If you want to make enemies, try to change something." People instinctively fear change. That fear can hold us back from reaching the pinnacle of our success and capitalizing on our potential growth. In this article we debunk some of the myths about Virtual Cards.
There are two main reasons why companies hesitate to implement virtual cards into their payment strategy.
For first time users, Virtual Cards are uncharted territory.
New payment solutions should always be researched heavily and tested before deployment. That's why it's not really surprising that the adoption of virtual cards has been slow for some businesses. Especially when you consider over40% of businessestoday are still using paper checks to process payments. Change can be difficult to accept. At this point,we all knowbusinesses can save $3 - $20 per transaction by moving away from paper checks. And regardless of the savings, some businesses still choose to continue utilizing the same 'reliable' technology they've been using for decades - even at the expense of their bottom-line.
Even businesses with more technologically advanced A/P departments are sometimes hesitant to add Virtual Cards into their accounts payable arsenal. Companies often wonder, "how does it work?" And, "If I already have apurchasing card, why would I want aVirtual Cardfor my business?"
Purchasing cards are great for face-to-face transactions but can easily lead to fraud if not monitored very closely. Alternatively,Virtual Cardsare one of the best options for B2B payments issued online. Unlike regularly credit cards, they are designed for one-time use and only for a specific dollar amount. After virtual cards are charged, the card is destroyed, making them the safest from of payment. The more protected nature of Virtual Cards as a form of B2B payments should be music to the ears of any CFO or Controller. It's a lot easier to venture into uncharted territory when you know that it's going to lead to a more protected payment process.
Another factor that makesVirtual Cardsstandout is that they are far more cost efficient than other forms of payments and can even EARN businesses cash back in the form of monthly rebates on monthly spend. Saving money on costs and earning CASH BACK at the same time by implementing one simple solution should make Virtual Cards a no-brainer.
What if this interrupts the company’s cashflow?
All companies are concerned with making sure that they are producing more money that they are spending. For technology that they have not seen decade’s worth of results out of, it is no wonder that they would not try it out.
For every company that is willing to keep up with technology, there are five more that turn their backs at the opportunity in favor of familiar territory. The benefits of virtual cards far outweigh any objections.
Juniter Research stated in a recent article that they expect"online fraud will reach $25.6 billion by 2020".Virtual Cards are well worth taking a chance on for the security aspect alone. When you account for the monthly rebates on top of everything else, it's a wonder why more companies haven't been using Virtual Cards all along.
Finextra published a blog post with some excellent information on Virtual Cards. You can check it outhere.
Virtual Cards are picking up speed in both the AP and automated payment world.Click Hereto read more on this subject in CFO Magazine.
Don't waste any more time wondering if Virtual Cards are right for your AP department. Join thousands and thousands of other large businesses and start SAVING on costs and EARNING cashback today.
Ben Frank is a creative Digital Marketing guru with a passion for getting relevant information into the hands of the people who need it the most. When he isn't researching innovative tech in the world of Finance and Accounts Payable/ Accounts Receivable, he's usually trying to convince his 3-year-old German Shepherd that he's not a hooman, he's a dog.
Listed by CFO Tech as one of the Top 10 Accounts Payable Solution Providers 2018 and 2019 and by CIO Review as part of the 20 Most Promising Corporate Finance Tech companies for 2017, OnPay Solutions streamlines processes for accounts payable by automating invoice processing and payments.