Why Enterprises Should use Virtual Cards for Managing Opex

In the aftermath of COVID-19, businesses have had to make significant adaptations to their financial and operational structures to thrive in the evolving business landscape.

The sudden nature of these economic shifts revealed that most companies weren't fully prepared to scale their spending to match revised expectations and forecasts. Coupled with the transition to remote work, these new conditions presented unique challenges in terms of expenses, planning, and cash management for both employers and employees.

Today, we delve into a topic that remains at the forefront of every CFO and Controller's agenda: expense management in a post lockdown era. From the widespread adoption of virtual cards to innovative expense management solutions, businesses have found ways to tackle these challenges while enhancing their finance tech stack for quicker access to working capital and expense reduction. Let's dig deeper.

Virtual Cards: The New Normal 💳

Cashless and contactless payments have become the norm across the globe, with digital transactions skyrocketing over the past few years. Today, more than half of the world's population is equipped with a digital wallet. As businesses continue to digitize B2B payments and adapt to the post-COVID-19 era, virtual cards have emerged as a preferred business tool.

Virtual cards offer finance teams enhanced control over organizational spending, streamline AP processes, and strengthen protection against fraud. Unlike traditional credit cards, virtual cards safeguard personal information through data tokenization, rendering these credentials unreadable to fraudsters.

Indeed, virtual card spend has seen a dramatic increase. Enterprises reading 2018 predictions on virtual card spend reaching $355 billion by 2022 are now astonished on spend actually reaching $1.9 trillion in 2021 alone. Clearly, the benefits of virtual cards skyrocketed their adoption.

For a more detailed understanding of how virtual cards work, check out our updated blog: The Age of Virtual Expense Cards.

The Power of Virtual Cards for Operational Expense Management

Enterprises seeking to manage their operational expenses can greatly benefit from the adoption of virtual card technology. Here's why:

1. Boosted Security 🔐: Virtual cards are designed with robust security features, reducing the risk of fraud and unauthorized transactions. They are typically issued for a specific purpose or time frame and can be easily deactivated or restricted, enhancing overall expense control.
2. Efficient Expense Tracking 📡: Seamless integration with expense management systems allows real-time monitoring and automatic reconciliation. Transaction data can be effortlessly captured, categorized, and analyzed, providing valuable insights into spending behaviors and aiding in budget management.
3. Better Vendor Payments 🏪: With the ability to set predefined spending limits, merchant category restrictions, and expiration dates, these cards provide better control over vendor payments. Virtual cards help enforce company policies, promotes compliance and minimize duplicate & unauthorized purchases.
4. Revenue Generation 💸: Virtual cards may offer cash back or lucrative rewards, opening up an additional revenue stream for businesses.
5. Cost-Effectiveness 💰: The digital nature of these cards eliminates costs associated with physical card production, distribution, and upkeep. Cardholders don’t typically lose virtual cards, and if a cardholder suspects fraudulent activity, they can cancel the cards instantly.
6. Simplified and Accelerated Processes 🧾: Digital cards make payment processes quicker and more efficient by eliminating manual paperwork and approval cycles. They also facilitate automatic expense reporting, reducing administrative tasks and boosting overall efficiency.
7. Worldwide Accessibility 🌎: Virtual cards may work internationally, offering international enterprises a mechanism for managing global vendor payments and business expenses among employees who travel. They often come with a transaction fee, but they do minimize currency conversion complexities.
8. Transparency and Compliance 🔎: Each transaction generates detailed records, creating a comprehensive audit trail for financial reporting and adherence to compliance requirements. This ensures transparency and simplifies both internal and external audits.
9. Mitigation of Data Breach Risks 📁: These digital cards keep sensitive payment information secure and off physical premises, reducing the risk of data breaches and potential exposure of critical financial information.

In conclusion, adopting this digital card technology can provide businesses with enhanced control, security, and efficiency in managing operational expenses. By leveraging these benefits, companies can streamline processes, enhance revenue, cut costs, and improve overall financial management practices.

The Paystand Virtual Card

If we caught your curiosity with this virtual cards article, let us capture your attention.

The Paystand Virtual Card — a no-fee, touchless alternative to corporate expense cards with a few industry-first features.

• 💸 Cash back on all of your expenses
• 🔒 Advanced spend controls like custom spend limits, auto-lock dates, and category controls
• ₿ Bitcoin rewards that may appreciate in value
• 💳 Customizable & company-branded cards that you can instantly and flexibly provision, 24/7

Whether it's expense management, fund disbursement, or bulk card creation, the Paystand Virtual Card lets businesses control even more of the payments process.

The Paystand Virtual Card makes it easy for your teams to own and manage spend across the entire organization and gives you the flexibility to instantly provision cards for internal and external fund disbursement. And we're just getting started...new features are being added regularly, so give it a spin.

We'd love to hear your feedback. Visit our website and sign up to get access today.