The payment industry has undergone a digital transformation in the last couple of years, and while this evolution has opened doors to new opportunities, it has also increased security risks. 

As more businesses operate online, the potential risks – from data breaches to financial fraud – become increasingly more complex and sophisticated. 

Research shows that North American fraud rates in 2023 – including attempted and successful incidents – increased by 70%, compared to 59% in 2022.

Hence, securing financial transactions is necessary in today’s digital-first environment. 

But where should you start?

A great first step is to adopt virtual cards as your preferred payment method.

What are virtual credit cards? 

Virtual credit cards are exactly what they sound like: credit cards that exist solely in digital form. They work just like traditional credit cards, holding a unique card number, validity date, and security code.

They’re created from your existing corporate card and via the virtual card platform you decide to use. As with a traditional credit card, you can use a virtual card to make purchases online, over the phone, and in person by loading them into your mobile wallet for contactless payments. 

What sets virtual cards apart from their physical counterparts is that virtual cards exist strictly in the digital realm, making them more secure and customizable.

How virtual credit cards enhance security and control over transactions 

Virtual credit cards bring unprecedented security and control over financial transactions, among other benefits, for businesses looking to streamline their spend management. This manifests in several key areas, allowing your business to navigate its finances with greater precision and security.

Unique card numbers 

Whenever you use a virtual card, you generate a unique credit card number. You can use this number to pay for a one-time transaction or other specific uses by assigning it to an employee, vendor, or client account for recurring payments. Relying on unique card numbers rather than one single number from your physical card is the best option for securing and controlling business expenses. Doing so eliminates the need to share physical card numbers across your organization and reduces the risk of card theft, cloning, or misuse. If a virtual card number is compromised, its impact is limited to that specific transaction or card, allowing you to quickly deactivate it and prevent widespread fraud.

Spending limits and expiration dates 

Another great advantage of virtual credit cards is the ease of setting and adjusting spending limits and expiration dates per card. Not only is this great for securing transactions, but this functionality ensures expenses remain within the allocated budget while maintaining financial discipline across departments and projects. It also guards against unauthorized charges or misuse. Adjusting these settings in response to changing economic situations or unexpected needs enhances your control and responsiveness in financial management.

Real-time transaction monitoring

Maintaining visibility is crucial when managing expenses to control cash flow and catch any potential unauthorized charges in time. Relying on month-end reports can be challenging for finance teams as funds have already been spent. Virtual cards transform this process into a proactive approach. They offer real-time visibility into company spending, ensuring you're always informed about where and how funds are used. This level of visibility is invaluable for effective budgeting, making timely financial decisions and analyses, quickly identifying discrepancies, and aligning every transaction with the company’s financial strategy and objectives.

Better expense management 

To simplify expense management, you need clarity and control, often lost in traditional methods where employees face costs and seek reimbursements. Instead of forcing employees to front the bill, use virtual cards. Employees can access an immediate payment method when needed, while finance teams retain complete oversight and control. This approach reduces the need for employees to pay out-of-pocket and streamlines expense reporting, freeing finance teams from the burdens of a cumbersome reimbursement process. 

Case study: A business success story

Let's look at how virtual cards can protect payments in real life through the lens of one of our customers, an electronic online retailer and wholesaler.

Before using Extend and virtual cards to manage transactions, the online retailer used one corporate card to manage inventory purchases for more than 200 vendors. Leaving the same card on file with every vendor proved to be a challenge since they experienced fraudulent charges at least once or twice a year, “an eight-month-long nightmare,” as the retailer’s business manager put it. 

Fortunately, they found Extend. 

After registering their existing corporate card, the retailer started creating new virtual cards in a matter of minutes. Fast forward to today: they create a unique virtual card for every vendor, meaning they never have to leave their primary card on file again, protecting them from exposing their primary account information. 

The results have been transformative. 

Not only were they able to reduce fraud hassles, but they prevented wrongful billing by setting exact spending limits on each card, and increased oversight when reconciling charges with original orders. 

Added bonus? They can continue to earn rewards for every transaction from their preferred card program.

Want to experience a similar success story? 

Leverage virtual cards for enhanced security in your business

Shifting to virtual credit cards is a strategic move to ensure safety and control over your company's financial transactions. 

From preventing fraud and overspending to increasing security, virtual cards are simply a better choice for today’s fast-paced and digital-first environment.

Learn more about how to implement virtual cards in your business.