What is a virtual card and how does it work? (2026)

Key takeaways:

• A virtual card is a digital-only payment card with its own number, expiry date, and security code. It exists entirely online and can be issued in minutes.

• Virtual cards come in several types, including debit, credit, single-use, and multi-use. Each suited to different business payment needs.

• With Airwallex Corporate Cards, you can issue unlimited virtual employee cards at no cost, pay in multiple currencies with 0% foreign transaction fees, and manage all spend from one dashboard.

A virtual card is a digital payment card that exists entirely online. There’s no plastic, no waiting for delivery, no branch visits.

Like a regular card, it comes with a unique card number, expiry date, and security code. You can use it straight away for online payments, recurring subscriptions, and mobile wallet transactions.

In this guide, we cover the different types of virtual cards, how they work, the main benefits, and what to look for when choosing a provider.

What is a virtual card?

A virtual card is a payment card that exists solely in digital form. It has its own card number, expiry date, and security code, just like a physical card.

Virtual cards can be debit or credit, and single-use or multi-use. Understanding the differences helps you pick the right type for each payment need.

Virtual debit cards

A virtual debit card draws funds directly from your business account. You can only spend what you hold — there’s no credit line and no interest. Most fintech providers in Singapore issue virtual debit cards, including Airwallex.

They suit everyday business payments well: vendor invoices, software subscriptions, digital ad spend, and team expenses.

Virtual credit cards

A virtual credit card lets you spend against a credit line and repay the balance later. Most come with an interest-free window of 30 to 55 days. Traditional banks in Singapore typically offer virtual credit cards as part of their corporate card programmes.

They work well if you need short-term payment flexibility or want to earn rewards on business spend.

Single-use virtual cards

A single-use virtual card is generated for one transaction only. Once the payment clears, the card number expires automatically. This makes it highly secure for one-off supplier payments or any purchase where you do not want a card number to remain active after use.

For example, travel agencies use single-use virtual cards to pay individual flight, hotel, and experience bookings. Each card is tied to a specific booking, which makes refunds and reconciliation straightforward.

For more, see our guide on single-use virtual cards for travel agents.

Multi-use virtual cards

A multi-use virtual card stays active across multiple transactions. You can assign it to a specific vendor or subscription and set a monthly spend limit. Cancel it instantly when the service is no longer needed.

This is the most common type for ongoing business costs — SaaS tools, ad platforms, and recurring team expenses.

How do virtual cards work?

Virtual cards run on the same payment networks as physical cards — typically Visa or Mastercard. The difference is in how they are created, controlled, and used. Here is a step-by-step breakdown.

1. Card creation

You generate a virtual card through your provider's platform — a bank or a fintech. The system issues a unique card number, expiry date, and security code within seconds. You can set spend limits or expiry dates straight away.

2. Set the rules

Before issuing the card to an employee or vendor, apply the controls you need. Set a spend cap, restrict it to certain merchant categories, or tie it to a specific expiry date. These rules apply at the card level, not just the account level.

3. Make a payment

Enter the card details at checkout, just as you would with a physical card. Your team can also add virtual cards to Apple Pay or Google Pay for in-store or travel payments.

4. Authorisation

When a payment is made, your provider checks that funds are available and that the transaction fits within the card's rules. The payment is approved — or declined — without exposing your main account details to the merchant.

5. Completion and reconciliation

The purchase amount is deducted from your account and recorded under that card's number. This makes it easy to track spend by vendor, employee, or project without sorting through a shared statement.

Common use cases for virtual cards

Virtual cards are flexible enough to cover most types of business spend. Here are the scenarios where they work especially well:

1. SaaS subscriptions and software tools

Businesses running multiple software tools often lose track of recurring charges spread across shared cards. Assigning one virtual card per subscription fixes this.

Every charge is clearly attributed, unused tools are easier to spot, and cancelling a service is as simple as freezing the card.

2. Digital advertising spend

Ad platforms like Google, Meta, and TikTok bill in foreign currencies and can spend unpredictably if campaign budgets are not tightly controlled.

A dedicated virtual card per platform — with a monthly spend cap — keeps ad spend contained and clearly separated from other business costs.

3. Overseas supplier payments and accounts payable

Businesses that pay international suppliers regularly can use virtual cards to make fast, traceable payments wherever Visa or Mastercard is accepted. This removes the need to initiate a wire transfer for every invoice.

For teams managing accounts payable across multiple vendors, issue a dedicated card per supplier. Each card carries its own limit and expiry date, so every payment is tracked automatically without manual matching at month-end.

4. Employee travel and expenses

Rather than asking employees to pay out of pocket and claim back later, issue individual cards with pre-set travel budgets. Finance teams get real-time visibility into what is being spent. Employees avoid the friction of expense reports and reimbursement delays.

5. International teams and contractors

You do not need to open a local bank account where your overseas teams are based. Virtual cards can be issued instantly and shared with team members or contractors in other countries. They are ready to use from day one, within whatever spend limits you set.

6. Fleet management

Link cards to specific vehicles or fuel partners. This gives you the visibility to keep fleet costs under control, enforce spend policies, and spot opportunities to reduce unnecessary spend.

Virtual cards vs physical cards

Virtual cards and physical cards serve different purposes. Understanding when to use each helps you build a smarter payment setup for your business.

Here’s a quick overview:

Most Singapore businesses use both. Virtual cards cover online purchases, subscriptions, and vendor payments. Physical cards handle in-person travel, client meetings, and any merchant that requires a card to be present for verification.

Virtual cards vs digital wallets

Virtual cards and digital wallets are often confused, but they serve different functions. A virtual card is the payment instrument — the digital wallet is where you store and use it.

They work together, not against each other. Your team can add a virtual corporate card to Apple Pay or Google Pay for in-store use. This makes it easy to pay for business lunches, transport, and other in-person expenses while travelling for work.

What are the key benefits of virtual cards for businesses?

Virtual cards solve practical problems that physical corporate cards cannot. Here are the four main benefits for Singapore businesses.

1. Ease of issuance

Traditional corporate cards can take weeks to issue. If you have overseas teams, the process often means opening a local bank account first — which can take even longer.

Virtual cards cut that wait to seconds. You generate a card in your provider's dashboard and share it immediately. No paperwork, no branch visits, no waiting for plastic to arrive in the post.

With Airwallex Corporate Cards, you can issue virtual or physical cards to team members across 60+ markets from your dashboard, in minutes. Learn more about our Corporate Cards or sign up now.

2. Improved expense management

Every virtual card transaction links directly to your business account. This gives your finance team real-time visibility across every card and team member, without chasing receipts or waiting for month-end statements.

You can configure cards to tag expenses by category, such as travel or ad spend. This makes budgeting more accurate and helps you spot where costs can be trimmed.

Virtual cards also sync with accounting software like Xero, QuickBooks, and NetSuite — so transactions flow from card to ledger automatically, with no manual data entry.

3. Greater security and fraud prevention

When you pay with a virtual card, your real account details are never shared with the merchant. Instead, each card has a unique number that acts as a proxy for the payment. Even if that number is intercepted, it cannot be used to access your underlying account.

This approach, known as tokenisation, is one reason virtual cards are more secure than physical cards for online payments. Your main account number stays protected regardless of which merchants you pay.

Beyond tokenisation, virtual cards give you additional controls:

• Freeze or cancel a card instantly, without affecting other team cards

• Set spend limits by card, employee, department, or campaign

• Block specific merchant categories or restrict a card to a single vendor

• Get real-time alerts for out-of-policy spend the moment it happens

85% of bank executives believe virtual cards improve organisational processes, and 84% believe they enhance cybersecurity.¹

4. Lower fees

Many traditional corporate cards charge annual fees just to keep them active. Some also add markups on international transactions — costs that add up fast for businesses that pay overseas suppliers or run ad spend in foreign currencies.

Disadvantages of virtual cards

Virtual cards solve many problems — but they are not without limitations. Here are a few disadvantages to keep in mind:

No ATM withdrawals

Virtual cards are designed for online and in-app payments. They cannot be used to withdraw cash. If your team needs cash on the road, you will still need a physical card for ATM access.

Some merchants require a physical card

Most online payments work with virtual cards, but some merchants still require a physical card for verification. Hotel check-in deposits, car rental holds, and certain in-person vendors fall into this category. A physical card alongside your virtual cards covers these gaps.

Not all providers are built for global spend

Some virtual card providers lack multi-currency support or charge high foreign transaction fees. Others add markups to exchange rates that are not obvious upfront.

If your business pays overseas suppliers or runs spend in foreign currencies, the cost difference between providers can be significant — so it is worth reading the fine print before you commit.

How to get a virtual card for your business

Most providers offer a fully online application. Here are the general steps.

Step 1: Choose a provider

Consider what matters most for your business — multi-currency support, spend controls, accounting integrations, and fee structure. For a full comparison of options available to Singapore businesses, see our guide to the best corporate virtual cards in Singapore.

Step 2: Prepare your documents

You will typically need your ACRA Business Profile, proof of identity for company directors, and in some cases recent bank statements or proof of business activity. Many fintech providers support Singpass verification, which speeds up the process.

Step 3: Apply online

Most fintech providers handle the entire application online. Traditional banks may require a branch visit or a call with a relationship manager.

Step 4: Wait for approval

Fintech providers typically approve applications within one to two business days. Some offer near-instant approval via Singpass for Singapore-registered businesses. Bank applications can take longer.

Step 5: Issue your first card

Once your account is active, generate a virtual card from your dashboard. Set a spend limit, assign it to a team member or vendor, and it is ready to use immediately.

How to choose a virtual card provider

Not all virtual card providers are built the same. The right choice depends on how your business pays — and where. Here are the key factors to evaluate:

Spend controls

Look for per-card controls rather than account-level limits only. The ability to set spend caps, restrict merchant categories, and assign expiry dates at the card level gives your finance team far greater control than a single shared card ever could.

Number of cards you can issue

Some providers cap the number of virtual cards you can issue or charge a fee per card. If you need cards for multiple employees, vendors, or campaigns, check whether the provider supports unlimited issuance.

Fees and transparency

Look at the full fee picture: annual card fees, foreign transaction fees, exchange rate markups, and any fees for issuing additional cards. Providers vary significantly here and the differences compound over time.

Ease of issuance and administration

Your finance team should be able to issue, adjust, and cancel cards without raising a request with your bank. Look for a provider with a clean dashboard that puts card management in your hands.

Multi-currency support

If your business pays overseas suppliers, runs ad campaigns in foreign currencies, or has teams across markets, multi-currency support is essential. Check whether the provider lets you hold balances in multiple currencies and pay directly from those balances, rather than converting every time you spend.

Providers that convert on every transaction typically add a markup on top of the exchange rate. These fees are not always visible upfront but add up quickly for businesses with high overseas spend.

Accounting integrations

A virtual card that does not connect to your accounting software creates manual work. Check that the provider integrates with the tools your finance team already uses — Xero, QuickBooks, NetSuite, or similar — and that transaction data flows automatically without needing to export and import files.

Issue unlimited virtual cards with Airwallex

If you are looking for virtual cards for your business, Airwallex lets you issue unlimited virtual employee cards instantly — no waiting, no paperwork, no per-card fees.

Simply sign up for an Airwallex Business Account (there are no monthly fees on the Explore plan), and you’ll get:

• Unlimited virtual employee cards issued immediately from your dashboard

• Granular spend controls — set limits by day, week, month, quarter, or year at the individual card level

• Merchant category restrictions — lock cards to specific vendors or block categories entirely

• 0% foreign transaction fees — pay directly from held currency balances with no conversion markup

• Global issuance — issue cards to team members across 60+ markets; add to Apple Pay or Google Pay for in-person use

• Real-time visibility — every transaction appears instantly, no waiting for month-end statements

• Accounting integrations — transactions sync automatically with Xero and other major tools

Frequently asked questions (FAQs)

What is a virtual card number?

A virtual card number is a unique set of card credentials — a 16-digit number, expiry date, and security code — assigned to each virtual card. It works like a regular card number but is separate from your main account number. This means merchants never see your primary account details when you pay.

Can I use a virtual card in person?

Yes, in most cases. You can add a virtual card to Apple Pay or Google Pay and use it for contactless payments at any terminal that accepts those payment methods. The main exception is merchants that require a physical card to be present — for example, some hotels and car rental companies that place a hold on a physical card at check-in.

Is a virtual card safe?

Yes. Virtual cards are generally more secure than physical cards for online payments. Each card has its own unique number that masks your real account details. If a virtual card number is compromised, you can cancel it instantly without affecting your other cards or your main account. You can also set spend limits and merchant restrictions to reduce exposure further.

What is the difference between a single-use and a multi-use virtual card?

A single-use virtual card expires after one transaction. It is best for one-off supplier payments or any purchase where you do not want a card number to remain active after use. A multi-use virtual card stays active across multiple transactions and is better suited to ongoing costs like SaaS subscriptions, ad platforms, or recurring vendor payments.

Are virtual cards free for businesses?

It depends on the provider. Some charge annual fees per card or a fee for issuing additional cards. Others offer unlimited virtual cards at no extra cost. Always check the full fee structure — including foreign transaction fees and exchange rate markups — before signing up. With Airwallex, you can issue unlimited virtual employee cards at no cost as part of a business account.

Can virtual cards be used to manage employee expenses?

Yes. Virtual cards are one of the most effective tools for managing employee spend. You issue each team member a card with a set budget, restrict it to relevant merchant categories, and track every transaction in real time. This removes the need for expense reports and reimbursements. If you are evaluating cards specifically for employee expenses, see our guide on how to choose a business expense card in Singapore.

Sources:

1. mastercard.com/us/en/news-and-trends/Insights/2024/commercial-cards-address-a-longstanding-payments-anomaly.html

This publication does not constitute legal, tax, or professional advice from Airwallex, nor does it substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.