Virtual Cards Become a Reality

by Ludovic Velasco-Martinez, Head of Marketing, Commercial Cards, BNP Paribas

Payment cards are now widely adopted by corporations, particularly in areas such as expenses management, from travel and accommodation expenses incurred by individuals through to meeting and conference costs, incentives, entertainment, media and online expenses. Increasingly, however, payment cards are being superseded by virtual cards for these purposes.

Unlike physical cards, each virtual card number can be used for one transaction. There are two ways to obtain a virtual card number, either inputting the transaction details into a web application or, where spending is high, this process can be automated by linking the virtual card server and booking/expenses systems – exchanged between machines and pushed to suppliers. A variety of limits and controls can be set up, e.g. on amount, category, supplier, currency etc. so effectively, all virtual card payments are pre-authorised, Additional references such as the booking or purchase order can also be linked to the virtual card number for reconciliation.

Virtual cards therefore bring a range of benefits:

• Pay everywhere, across currencies and locations.
• Easy and secure. Security is offered on two levels, both limits on expenditure, and limits on the risk of fraud, as there is one number per transaction, with valid start and end dates.
• Payment on time. In some cases, such as in hotels, the card number has to be provided at booking time.
• Full traceability. The virtual card number itself, plus any additional references, allow tracking and reconciliation. Managers can also see where payments have not occurred, and as the card has an end date, it will not take place after this date.
• Consolidated view. By tracking spend per supplier etc. companies can tailor their purchasing policy.
• Working capital. The benefits are comparable with the other commercial card products, with expenditure consolidated into a single statement with one amount to pay the bank.
• Integration. Virtual cards can be integrated with internal systems to streamline the initiation, validation and reconciliation processes.