What is a B2B Virtual Credit Card?
In terms of making payments to vendors, contractors, and other miscellaneous invoices, B2B companies are typically behind the general public. Most consumers pay using debit or credit cards and rarely ever use checks. But for many businesses, paper checks are still the preferred way to make payments. So how can you bring your company out of the dark ages, improve your cash flow and build efficiencies? B2B virtual credit cards!
B2B virtual credit cards are digital representations of credit cards generated for a specific use, like paying a supplier invoice or purchase order. Virtual cards are created instantly through a pre-approved process and assigned to the exact total that is owed. This secure method of payment is generated for a specific payer and payee. This process is designed to eliminate the possibility of overdrawing on the account and free up cash flow.
How do B2B Virtual Credit Cards Work?
Virtual credit cards feature a unique 15- or 16-digit code that is auto-generated with payment authorized for a specific transaction. The information is sent securely to the supplier, who can then submit the transaction. Then, the transaction is reconciled automatically with the associated purchase order once payment is processed.
So once an invoice is approved for payment within your business, the virtual card platform, which resides in your company’s bank or AP automation software, sends out a one-time use number for the exact dollar amount to cover the unpaid invoice.
This virtual transaction allows your company to pay invoices or expenses the same way as you would with a traditional credit card, but without a physical card or open line of credit needing to be provided.
What are the Benefits of Virtual Cards for B2B Businesses?
Along with streamlining your AP process and improving your cash flow, virtual cards provide other benefits for B2B businesses as well:
- Enhanced security – Virtual credit cards reduce the risk of misuse, protecting against fraud better than traditional physical business cards or checks.
- Improve payment process – Virtual B2B credit cards save time by improving the payable process for both buyers and suppliers.
- Virtual cards offer rewards – While it might not seem like much at first, virtual cards generate cash back rewards that can be funneled back into the business as revenue generation.
- Maximize unused credit – Physical credit cards can tie up your credit when you issue them to multiple employees. Virtual cards offer dynamic credit and don’t tie up your company’s credit the way physical cards will.
Smart businesses should consider adopting this new technology to capture value and streamline efficiencies. With many B2B companies taking steps toward AP automation, virtual credit cards are a smart next step.
Explore AP Automation with PaperTrl
From procure to pay, PaperTrl automates the AP process, helping businesses of all sizes simplify and streamline review and approvals, reduce processing time and associated costs, and minimize the potential for human error.
PaperTrl is a fully integrated, cloud-based AP automation software solution that helps organizations simplify and streamline the AP process from purchasing to payments. Learn more about PaperTrl and contact us for a free demo.