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Complete Guide on How to Launch Virtual Cards For Your Business

Complete Guide on How to Launch Virtual Cards For Your Business

4 min read
February 10, 2023

The increasing adoption and usage of smartphones and mobile payments have propelled the growth of virtual cards as a modern and versatile alternative to conventional credit or debit cards. Future Market Insights (FMI) reported that the global virtual card market size was valued at $411 billion in 2022 and is projected to reach $1.3 trillion by 2032. Major financial institutions, card providers, and tech companies have been racing to launch their own unique virtual cards in the market. Popular examples include Paypal's virtual prepaid debit card 'Prepaid Mastercard' and American Express' virtual credit card 'American Express Go' amongst many others.

What Exactly are Virtual Cards?

A virtual card is a digital representation of traditional debit or credit cards stored in-app or via a computer. They are basically cards that only exist online, but work exactly just like any traditional payment card, where users don't need a physical card to make online purchases and transactions in real time. This is because a virtual card has its own card details, including a CVC / CVV, a 16-digit dedicated virtual card number, and an expiry date, which can be used to effortlessly transact anywhere that requires entering a card number online or over the phone.

How are Virtual Cards Different from Digital Cards?

Normally, a digital card is linked to a consumer's physical bank card and physical card number, and they can be used for digital wallets like Apple Pay or Google Pay. On the other hand, virtual cards are unique cards that only exist online, but both can be utilized as ways to pay online effortlessly without a physical card on hand.

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Benefits of Using Virtual Cards

Higher security

One of the key benefits of virtual cards is that they offer a higher level of payment security than traditional debit or credit cards. Unlike tangible cards, which can be lost or stolen, virtual cards are not tied to a physical plastic card, reducing the risk of fraud. Concurrently, they can be set up with spending limits and can quickly be canceled securely if the card is lost or stolen, helping to minimize compromising personal payment details to unwanted parties.

Versatile to use

Most virtual cards online offer versatility in usage, as they can be programmed for either single-time or recurring transactions. Single-use virtual cards or virtual debit card are ideal for one-off payments, such as claims and warranties, while multiple-use cards enable seamless transfer between users, making them a suitable option for recurrent expenses, like supplier payments and payrolls.

Ease of managing employee expenses

Businesses can also leverage virtual cards' power to keep track of employee expenses, subscriptions, and many others. By setting spending limits for each employee, companies can mitigate the risk of fraudulent transactions while still enabling employees to make the necessary purchases for their job. Overall, virtual cards represent a powerful tool for businesses looking to streamline their payment processes and increase security.

Provide alternative lending options

Lending institutions serving unbanked and underbanked customers stand to gain a unique advantage from offering virtual cards. These cards can serve as alternative financing solutions, enabling companies to provide loans to individuals without a traditional bank account. Borrowers can use the virtual cards at the point of sale, just like a regular card, for one-time or installment payments.

Factors to Consider: Virtual vs. Traditional Cards

Factors To Consider Virtual Cards Traditional Cards
  • Various forms of security: 3D Secure, Tokenization, Two-Factor Authentication, etc.
  • Reduced susceptibility to fraud
  • Convenient spending limit setting
  • Easy to cancel
  • Comprehensive employee expense management and subscription handling
  • Convenient spending limit setting
  • Easy to cancel
  • Comprehensive employee expense management and subscription handling
  • Versatile usage for single and recurring transactions
  • Seamless transfer of ownership
  • Comprehensive employee expense management with custom spending limits
  • Usage is limited according to the type of card (credit or debit)
  • Limited transfer of ownership flexibility
  • Widely accepted by online merchants, with some limitations for physical merchants
  • Widely accepted by physical and online merchants use
User experience
  • No physical card to carry, easy to use and manage without worrying
  • Real time card control through in-app platform
  • Physical card to carry
  • Need for caution to prevent loss or theft
  • May have additional or different fees compared to traditional cards
  • May have annual or transaction fees
  • Some virtual cards may offer reward program
  • Traditional cards generally offer a rewards program

Basic Steps to Launch Your Own Virtual Card

Launch own virtual card in Indonesia

Whether it’s to manage your employees’ expenses, provide alternative lending options, or simply offer more secure ways for your customers to shop online, here are the 6 basic steps you can follow to launch your own virtual cards:

Step 1: Identify your business needs

The first step in launching a virtual card program is determining why you need virtual cards and what benefits they will bring your business. Consider factors such as employee expense management, online shopping security, and alternative lending options.

Step 2: Evaluate your current systems

Consider how virtual cards will integrate with your existing systems and processes, and make any necessary changes to ensure a seamless experience.

Step 3: Set up cardholder accounts

Once you have selected your virtual card provider, set up cardholder accounts for your employees or customers. Ensure you have all the necessary information for each cardholder, such as their name, email address, and billing information.

Step 4: Define card usage policies

Establish clear policies for using virtual cards, including spending limits, card expiry date, purchasing restrictions, and reporting requirements. This will help you maintain control over your virtual card program and reduce the risk of fraud or misuse.

Step 5: Monitor usage

Monitor and track your virtual card usage to ensure that you are achieving the benefits you expected, and make any necessary adjustments to your policies and processes.

If you’re looking for a trusted virtual card provider in Southeast Asia with excellent experience in providing payment solutions, look no further! Ayoconnect has been trusted by over 200+ companies across the region to power their open finance solutions, and our team will be dedicated to efficiently customizing our virtual cards for any of your business needs. With added benefits of versatile currency cards and attractive incentive programs per transaction, we are confident that we can help elevate your business to the next level.

Ready to #MoveForward with us? Contact us for more information here!