Flip phone or smart phone? DVD or streaming video? These choices seem obvious today, but the viability of every new technology remains questionable until adoption reaches a tipping point that convinces people and industries to embrace change. Virtual cards are now approaching that tipping point.

To understand the advantages and ongoing evolution of virtual cards, consider what drove adoption of physical commercial cards in the first place. For the buying organization, commercial cards streamline the payment process, provide greater control over how and where purchases can occur, provide transparency into purchase activity post-transaction, and reduce expenses associated with paper check processing. Commercial cards also have value for suppliers, as they provide immediate and guaranteed access to funds, simplified processing, and valuable remittance data not necessarily available with paper checks, wire transfers, or ACH payments.

Virtual cards offer the same benefits as commercial cards, but “without the plastic”—in other words, without a physical credit card present to facilitate the transaction. A virtual card payment can be initiated in either of two ways: First, buyers can receive and approve invoices through their company’s typical payment processes, but then pay using a static virtual card account, a 16-digit account number that is dedicated to one specific supplier. The other option is to generate a dynamic, single-use 16-digit number for each transaction. In either scenario, the account is not funded until the buyer approves payment for the invoice.


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