Virtual Payment Cards

Today digital payments are becoming the norm and the percentage of people using virtual payment cards is increasing significantly. Even the EU government is preparing to roll out digital wallets for every citizen shortly.¹  So, what is this virtual credit card, and why would you want one? In this article, we’re taking a look at what they’re all about.

 

Virtual Payment Cards

Virtual credit cards, sometimes called a temporary card number or pseudo card number,  have been around in one form or another for years now and their use has certainly taken off among consumers and companies since the pandemic. There are few differences between virtual payment cards and debit. First of all, the main dissimilarity is that there is no physical carrier. The second difference is that virtual payment cards are single-use credit cards, which provide various alias credit card numbers for the same account, typically your existing credit card account. In this method, your real account number is never revealed to the merchant. Then, if you use a virtual payment card for your medical bills, your auto payment, and your company transactions, a different account number would be used for each of those vendors, but all of the numbers would be linked to the same base account.

 

What is Virtual Payment?

A virtual payment allows business or a person to pay for transactions using a digital form of payment. In the case of virtual credit cards, it solves the security problem of using a single card number for multiple transactions and offers a virtual, expendable, randomly generated credit card number for a particular transaction. This virtual card number is linked to the credit account, however, it cannot be reused, and it can also set additional usage parameters, such as maximum charge amount and a specific expiry date, which further protects future transactions.

 

Benefits of a virtual card

Individual Virtual cards are not only popular with individual users, but we also can see how companies are switching to virtual credit cards and according to a recent survey, more than 25% of Fortune 100 companies are now using virtual payment cards.³ This trend toward virtual cards has significant reasons and key benefits:

  • Fraud Protection 

The biggest benefit of virtual cards is their enhanced security, compared to other payment methods. Online fraud is a massive financial issue that is increasing each year and according to a recent research by J.P Morgan, 74% of cheque payments in 2019 were attempted or actual fraud targets.²  Because for using a traditional credit card users have to reveal their personal information whenever they make payments in person or online, and this information can be stored, which could potentially be stolen. Virtual cards do not have any hard data that can be stolen. In this way, your main credit card details remain inaccessible to outsiders, which means that no one can use them. If someone tries to access the "virtual card", your funds are still safe, as it remains empty.

  • Speed 

An important benefit of virtual payments is the speed and convenience: the owner or manager of a company can issue a card on their own at any time, without a visit to the bank, in the mobile bank, and immediately link it to a current account. The entire process takes just a few seconds. The virtual cards can therefore become a means of resolving a diversity of complex situations.

  • Security and Control 

These single-use virtual cards have clear security benefits. By creating a number for one-time use, these cards limit the ability of hackers and other cybercriminals to track the IP address from which they are obtained. In fact, a number that is used only once and then thrown away forever cannot be traced or duplicated in time to satisfy an identity thief. The number appears and disappears too quickly for any unauthorized party to catch and exploit.

  • Cash flow improvement

The immediate nature of virtual cards means that companies can make their payments quicker. Cash flow is greatly improved and there is no risk of delayed payments or lost receipts. With virtual card payments, the working capital of a company can be improved as payments are done instantly. This way finance teams and account payable teams, especially, will not need to hold on to funds for longer than they require.  So it is not difficult anymore to manage cash flow and the monetary requirements of a business.

 

Virtual cards for business

More and more companies are showing their interest in virtual payment solutions and according to the recent survey about 23 percent would like to integrate ePayables with virtual cards into their B2B operations in the near future. 

Virtual cards are uniquely valuable in the B2B sector , because a unique Virtual Card Number (VCN) is created for each payment, which solves reconciliation and security issues. In turn, the B2B payment process becomes faster, safer, more transparent and far more secure than making up an old-fashioned paycheck. For corporate customers operating in this environment, virtual card technology meets all requirements for speed and security. Optimizing the B2B payment process can help eliminate the many touch points between a company, a third-party provider and a financial institution that typically reinforce security concerns. 

How do I get a virtual credit card?

The entire process to get a virtual credit card is handled through the internet. This means there is no need to fill out lengthy paper documents or go to a physical location in person. 

It should be noted that the B2B market is heavily regulated to allow different players to solve the payment process and have real-time transaction information.  More precise information on what security requirements exist for online transactions in B2B sector can be found on the PSD 2 Directive in Europe website

Fortunately, Jenji has thought of a solution which can  optimize the management of professional expenses and launched the virtual payment solution “Jenji Pay”. From small compaines to enterprises, Jenji Pay adapts to the profiles and needs of each one, allowing companies to control and limit each card according to their spending policy. The Jenji Pay virtual card is used on a daily basis to support the development of your business in France or abroad. Limitations, categories, days and hours of operation are among the features that can be modified, to offer an optimal control of your professional expenses. Jenji Pay's solution aims at bringing a simple and mobile follow-up to all our customers and the virtual payment card is connected to the Jenji platform, so users can add information about their purchases or ask their manager for a higher limit if necessary. 

For more details on Jenji, don’t hesitate to contact the Jenji team at sales@jenji.io.

 

Sources: 

  1. https://fintechmagazine.com/digital-payments/eu-intends-provide-every-citizen-digital-wallet 
  2. https://www.afponline.org/ideas-inspiration/topics/articles/Details/afp-survey-payments-fraud-increase-attributed-to-coronavirus-pandemic
  3. https://www.americanexpress.com/us/foreign-exchange/articles/use-of-virtual-credit-cards-gets-real-for-businesses/
  4. https://www.pymnts.com/accounts-payable/2019/bny-mellon-payments-innovation-ap-automation/
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