Skip to main content

Knowing When to Use a Purchasing Card vs. Virtual Card

There are many types of Commercial Credit options available to businesses these days.  There are Travel and Entertainment Cards (T&E), Purchasing Cards, Fleet Cards, Prepaid Cards and more. Today, we want to focus our attention on differentiating Purchasing Cards (P-cards) from Virtual Cards (V-cards) to allow our readers to gain a better perspective on how and when to use each. 


purchasing-cards-business-credit-cards-laying-on-a-keyboard

Purchasing Cards 

Purchasing Cards (p-cards) give employees streamlined purchasing power and allow management to know that purchase controls are in place.

Purchasing card use has soared in the past years as companies and governments seek to reduce friction in making purchases. Purchasing cards are a form of company charge cards that allow goods and services to be procured without using a traditional purchasing process.

The P-cards are issued to employees who are expected to follow the guidelines for use of the card and a variety of controls can be put on these cards:

  • Single-purchase dollar limits
  • Monthly purchase dollar limits
  • Restriction to purchasing goods or services in specific merchant category code (MCC)
  • Review and approval of each purchase or of purchases --at least monthly by an independent of the cardholder

On the other hand, Virtual Card (v-card) payments streamline the accounts payable process by converting checks to a secure e-payment — eliminating costs associated with distributing paper checks, speeding up turnaround times for your vendors receiving payments, and reducing risks associated with lost and stolen paper checks. Another benefit is that it makes your accounts payable (AP) process substantially more efficient.

virtual-cards-equal-increased-revenue-conceptual-representation-businessman-draws-upward-arrow

Virtual Cards 

Virtual Cards or single-issue cards (controlled payment numbers/one-time use credit cards) allow companies to issue credit payments electronically. Paying vendors through an existing payment card network, all while maintaining the highest security standards. Each virtual card is issued to a specific vendor for a specific dollar amount. The cards are processed by the vendor similarly to the traditional credit or pay card payments without a physical card or open line of credit being provided.

With Virtual Cards, Card Numbers:

  • Are unique for each transaction
  • Are activated and assigned to designated organizations
  • Carry a specific maximum dollar amount that will ever be authorized
  • May carry GL clearing information for ease of applying to overall systems
  • Are no longer valid once the maximum dollar value has been reached

More on Virtual Cards:


Interested in more information on streamlining your payables process using a virtual card program? Reach out today. 


Originally published January 2015. Updated for content and quality on February 4th, 2021.