5 Benefits of Using Virtual Cards for B2B Payments

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Due to the global effects of the recent epidemic, the digital landscape and reliance on digital-only tools, have permanently changed the corporate world. No facet of any business has remained unchanged, from offering digital-first services, facilitating remote work, and evolving the use of online payments, this pivot has hit finance leaders the most. They are under internal and external pressures to adapt to the new digital-first society, while also adhering to the bottom line of scalable growth and profits and losses.

 

To remain competitive, CFOs and their finance teams are increasingly required to support and lead strategic digital transformation efforts inside their organizations. While all these changes are in motion, however, CEOs are requesting more and more, from compliance to strategic team development, and office planning for the future of work.

 

Business man paying with a credit or debit card

New responsibilities require the development of new technologies to assist finance professionals in strategic decision-making. One significant area where creative technology may help is with cost reduction — especially, in managing suppliers and subscriptions throughout the enterprise to free up funds for initiatives.

 

Benefits:

  1. Increased Security Means Less Fraud
  2. Streamline Payments and Improve Vendor Relationships
  3. Reduce Unnecessary Purchases
  4. Improve Spending Visibility
  5. Improve Performance Through Business Analytics

 

Managing Where The Money is Spent

Managing dozens of vendors, on the other hand, may be difficult, with payments dispersed over credit cards, paper invoices, and unconnected financial software. As a result, many finance departments lack insight and control over company-wide spending. To make matters worse, the trend to remote work has further divided spending as scattered workforces scramble to discover new methods to communicate and remain productive. Fortunately, there is a better method to handle this sort of spending, an innovative technology that is paving the way for payment's future.

 

Virtual Cards

A virtual card is a one-of-a-kind 16-digit auto-generated card number with an expiration date and security code that is linked to your existing credit card account. Virtual credit cards contain all of the same features as actual credit cards, but they can be generated on demand, making it simple to generate dozens or hundreds as needed. Virtual cards are ideal for subscriptions and online transactions and are equipped with software to provide sophisticated controls and security that allow finance teams total control.

 

Aside from their simplicity of use, virtual cards provide unrivaled security. You may save them in an encrypted online password manager and safely checkout online in seconds without fear of fraud. Virtual cards may be configured to deny transactions for specified merchants, categories, or transaction amounts, making them ideal for software trials and one-time subscriptions. It's easy to understand why virtual cards have become a popular alternative for finance teams trying to improve their vendor and subscription management.

 

Virtual cards are an exceptionally clever method to handle all types of business spending, and they're just becoming smarter. Virtual cards offer substantial upside potential, driven by major B2B payment trends such as continuous AP/AR automation and integration, improving real-time expenditure visibility and cost management. Paper invoices and ACH payments are becoming obsolete, particularly in vendor management. When compared to traditional B2B payment systems such as bank transfers, virtual cards simply give greater control, visibility, and convenience of use.

 

Switching your company's vendor payments to a virtual card—particularly to a system like Fyorin, for example which provides seamless, integrated spending management software—can give your company multiple important competitive benefits.

 

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Here are five benefits of using virtual cards for B2B payments:

     1. Increased Security Means Less Fraud 

Payment fraud, such as credit card fraud, is frequently encouraged by economic instability. Credit card theft can cost companies billions in losses if they don't put security at the forefront of their financial operations. 

 

Having complete control and simple access to your company's virtual cards minimizes the risk of fraud significantly. Without virtual cards, fraud attempts can occur if an unauthorized individual obtains a corporate card and intends to use it. Charges made on a physical corporate card might sometimes go unreported for lengthy periods before anybody has an opportunity to prevent them. However, by that time, the firm is likely to have experienced significant losses, with a slim possibility of ever recovering the stolen funds. Online fraud can also occur if hackers discover stored card information in a firm database, resulting in comparable financial losses.

 

Virtual credit cards are naturally resistant to fraud, making them suitable for online purchases. Virtual cards substitute sensitive information by using a payment process known as tokenization. Account information is less likely to be compromised if the card is hacked. The option to set expiration dates or limit cards to a certain amount of transactions adds another layer of protection. If required, virtual cards may be quickly changed, switched off, and re-issued.

 

     2. Streamline Payments and Improved Vendor Relationships

One significant advantage of utilizing virtual cards is the increased ability to pay suppliers promptly. Virtual cards are widely accepted and do not need lengthy onboarding processes. When an invoice must be filed via procurement systems, paper checks must be cut and mailed, and then physically received and deposited. This traditional payment method typically results in delays, negatively affecting vendor relationships over time. 

 

Payments that become blocked in an administrative process can also harm a company's reputation and relationships with its suppliers. According to one poll, 39 percent of respondents said that making late payments diminished or eliminated discounts that were obtained through positive relationships and on-time payments.

 

Virtual cards come with several characteristics that may be utilized to improve supplier relationships over time and with proper use. By utilizing virtual cards to keep track of subscription and supplier payments, your company's image is likely to improve since prompt and on-time payments make any provider delighted to do business with you. The more your company uses virtual cards to better handle payments and cash flow, the better your relationship with your suppliers will be. Payments that are easier and faster to reconcile save time and resources for accounts payable teams. Not only are processing expenses reduced, but suppliers and consumers may improve cash flow and working capital management. 

 

      3. Reduce Unnecessary Purchases 

The expenditures imposed on virtual cards may be readily adjusted because they are meant to be single or multi-use cards. Because a single-use virtual card can only be used once, the number of times it can be used is limited which reduces unnecessary purchases. Limits may be imposed on a multi-use card with a few clicks, limiting the amount that can be spent or the number of times it can be used. You may also restrict virtual cards by the merchant, merchant category, time of day, or value.

 

Having complete control over corporate spending with virtual cards may provide your CFO with peace of mind, knowing that there is an extra layer of security keeping your organization within the set budget. Virtual cards can help you save money and keep your CFO content by allowing them to regulate business expenditures.

      4. Improve Spending Visibility 

End-to-end expenditure management is enabled through virtual corporate cards in conjunction with spend management software. Every expenditure paid to the card, every receipt uploaded, and every information inputted may be communicated with the finance team and third-party software immediately. By eliminating manual operations, reconciliation and reporting mistakes are reduced.

 

Virtual cards can also be used to classify costs. Using a single virtual card to pay for expenses associated with a certain trip or project, for example, identifies the relevant costs, making it easier to analyze return on investment. Real-time insight into spending also allows finance teams to produce accurate financial statements and make more educated judgments, improving the overall spending visibility within the company. 

 

      5. Improve Performance Through Business Analytics

Each virtual card transaction provides substantial data for data analytics. Finance teams and CFOs may acquire valuable insights into corporate processes through integrations. Expenditure data may be used to calculate ROI and much more within the company. For example, data analytics may assist organizations in identifying markets where they are most likely to clinch a successful sale. Other departments, such as Sales teams, may use data to identify the most lucrative regions, sectors, and demographics to prioritize spending for clients with the best ROI while lowering expenses.

 

Finally, virtual cards, via their originating platform, offer integrations with the most commonly used accounting software such as Xero or Quickbooks for easy reconciliation and payables. 



With virtual cards from Fyorin, your company can easily allocate spending power while still having an efficient way of monitoring and regulating expenses. Fyorin provides digital businesses with virtual cards that are capable of tracking expenses and subscriptions, simplifying reconsolidation, and controlling company spending, as well as offering cashback on every card spent, to help lower transactional costs. By simply opening up a multi-currency account, your business will have access to unlimited virtual cards that can easily be linked to it, giving your company the freedom to use virtual cards anywhere online card payments are accepted.

 

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