What is a virtual card and how does it work? The safer, faster way for businesses to pay online in 2025

Key takeaways

• Virtual cards remove the delays and risks that come with physical corporate credit cards. You can issue them in minutes instead of waiting weeks, and you decide where, when, and how they’re used.

• If you pay overseas teams, travel for business frequently, or manage recurring vendor costs, virtual cards give you greater visibility and control. You track spend in real time and set custom limits that prevent misuse before it happens.

• With Airwallex Corporate Cards, you get all the advantages of virtual cards, along with 0% international transaction fees and built-in expense management.

Your team needs to book flights for a last-minute trip, but the new company card is still in the post. A colleague pays with their own card, and finance begins its hunt for receipts. It’s the same story every time: banks bury you in paperwork, take weeks to issue cards, and often leave team members covering company expenses out of pocket. 

Virtual cards change that. You can issue them online in minutes, eliminating out-of-pocket spend and the hassle of reimbursements.

In this guide, we’ll break down how virtual cards work and weigh their pros and cons. We’ll also show you how Airwallex Corporate Cards help you cut costs and reduce manual work.

What is a virtual card?

A virtual card is a payment card that exists solely in a digital format. It comes with a unique number, expiry date, and security code, just like a plastic card. There are two main types: virtual debit cards, which pull money straight from your business account, and virtual credit cards, which let you spend on credit. 

Virtual card adoption is growing in Singapore, especially among businesses looking to expand overseas. Market forecasts estimate the Singapore virtual cards market will grow from US$1.34 billion in 2024 to US$6.68 billion by 2033.¹ That’s because virtual cards have features that meet the needs of international businesses, such as faster issuing and lower costs compared to traditional corporate cards.

How do virtual cards work? 

Virtual cards work much like physical cards, but with added flexibility and control for businesses. 

Here’s a detailed overview of how virtual cards work:

1. Card creation:  You generate a virtual card through your bank or financial provider’s platform. The system issues a unique card number, expiry date, and security code within seconds. With providers like Airwallex also, you can also set spend limits or expiry dates from the start.

2. Set the rules: Apply limits, expiry dates, or merchant restrictions before issuing the card to an employee.

3. Transaction: Enter the virtual card details at checkout, just like a traditional card. Transactions run through secure payment gateways, and employees can also add their cards to Apple Pay or Google Pay for travel and in-store payments.

4. Authorisation: The provider verifies the transaction, checks that funds are available, and confirms that the transaction fits within the card’s limits. Approval is then sent to the merchant without exposing your main account details.

5. Completion and reconciliation: The purchase amount is deducted from your account and recorded under that card’s number, making it easy to track spend by vendor or team. With Airwallex, every transaction automatically syncs to your accounting software, taking the manual work out of reconciliation. 

What are the key benefits of virtual cards for businesses?  

85% of bank executives believe virtual cards improve organisational processes, while 84% believe they enhance cybersecurity.² The reason is simple: virtual cards solve problems traditional cards can’t. Here are the key benefits for businesses:

Ease of issuance

• Instant card creation: Traditional corporate cards can take weeks to issue. And if you have overseas teams, issuing traditional corporate cards often means opening a local bank account – a process that can take weeks or months. Virtual cards can be created in minutes and give teams immediate purchasing power. 

• Cards for every purpose: Create virtual cards for one-off purchases, recurring subscriptions, or travel. With Airwallex, you can issue company cards for shared costs or employee cards with tailored limits. You can even name vendor cards and set budgets that show up in a real-time dashboard of all your subscriptions.

Improved expense management

• One dashboard for expenses:  Every transaction links to your business account, giving you real-time visibility across every card and team. With Airwallex, you see spend by employee, department, or campaign in a central dashboard. Team and vendor cards simplify reconciliation, while consolidated reporting gives you a clear view of costs across entities and subsidiaries. 

• Automated categorisation: Configure virtual cards to tag expenses by type, such as travel or ad spend. This makes budgeting more accurate and helps finance teams spot where costs can be trimmed.

• Accounting software integrations: Sync card spend directly with tools like Xero, NetSuite, and QuickBooks. With Airwallex, every transaction flows from card to ledger in real time, so finance teams don’t need to juggle between platforms – uploading bills in one place, paying them in another, and reconciling later. Everything happens in one platform, which means fewer errors, faster closes, and greater visibility across entities.

Greater security and fraud prevention

• Freeze or cancel instantly: Just as you can create a virtual card in seconds, you can freeze or cancel it just as fast if needed, without affecting the use of other team cards.

• Transaction limits: Set spend limits by card, employee, department, or campaign. Block merchant categories, get real-time alerts for out-of-policy spend, and restrict transactions to certain vendors. Airwallex gives you full control over where and how company money is spent.

• No card to lose or steal: Virtual cards exist only online, which means there’s nothing to misplace. If a card number is ever compromised, you can cancel it instantly and issue a new one.

• Real-time spend tracking and approval: Every transaction made with a virtual card shows up instantly in your dashboard or mobile app. With Airwallex, you can set up multi-layer approvals that automatically route transactions to the right managers. You’ll see exactly where money is going, spot unusual activity right away, and take action before it becomes a problem.

Lower fees

• No annual fees: Many traditional corporate cards charge yearly fees just to keep them active. Airwallex Corporate Cards have no annual fees, so you only pay for what you spend.

• No hidden transaction fees: Some providers add markups, especially on international spend. With Airwallex, you draw directly from held balances in your multi-currency account, so there are no forced conversions and lower FX costs. On top of that, we charge 0% foreign transaction fees.

Virtual cards vs digital wallets or payment apps: what is the difference?

Virtual cards are digital-only versions of debit or credit cards, while mobile wallets and payment apps are platforms that store those cards for you to use them. In other words, a virtual card is the payment tool, and a wallet or app is where you keep and use it.

Here are the key differences:

Together, they complement each other. For example, employees travelling for work can add their virtual corporate card to Apple Pay or Google Pay to easily pay for business lunches and other expenses.

Downsides to using virtual cards

Not every bank or provider offers corporate virtual cards. In fact, 48% of companies say they don’t use them because their providers lack the infrastructure to support them.³ With Airwallex, that barrier disappears. You can issue and manage virtual cards directly from your Business Account. Beyond cards, you also get an end-to-end financial platform to handle global transfers, international bill payments, and online payment acceptance in one place.

Some providers also charge high annual costs or transaction fees. With Airwallex, you avoid both – issue up to 10 company cards at no cost and pay 0% on international transactions, even on our free Explore plan.

How to choose a virtual card provider

Not all virtual card providers are built the same. Here’s what to consider when choosing one that fits your business.

Support for multi-currency payments

If your team makes frequent cross-border payments, a multi-currency card is critical. Without it, you face repeated conversion fees. With Airwallex, you spend directly from held balances in currencies like USD, EUR, AUD, or GBP, avoiding forced conversions and 0% foreign transaction fees.

Ease of card issuing

Consider how quickly the cards can be issued and where they can be used. Traditional banks often take weeks, with each card requiring its own application. With Airwallex, you can approve and issue virtual or physical cards to your teams across markets in seconds. 

Spend control and visibility

Without controls, card spend can spiral. Look for providers that let you set limits, block merchant categories, and monitor spend in real time. Airwallex gives you a central dashboard where you see spend by employee, team, or vendor – making attribution, GL coding, and global reporting simple.

Fees and charges

Read beyond the annual fee to understand the true cost. Some providers hide markups on FX or international transactions. With Airwallex, you cut those costs by drawing directly from your multi-currency account at competitive interbank rates, with no annual fees and 0% foreign transaction fees.

Security

Choose a provider with strong built-in controls. Airwallex lets you generate single-use or vendor-specific cards, set alerts for out-of-policy spend, and freeze cards instantly if needed.

If you want to see how card issuers in Singapore stack up, check out our guide to the best virtual debit cards and our breakdown of the top corporate credit cards.

From expenses to expansion, Airwallex powers every step

Virtual cards help you cut fraud risk and simplify payments. With Airwallex, you get those benefits plus a platform built for global business.

It’s a better way to cover international expenses. Our Corporate Cards draw directly from held balances in your multi-currency account so you can pay in the currencies you hold and avoid unnecessary conversions. 

Airwallex Corporate Cards give you complete control over company spend. You can issue cards for specific teams or projects, and set rules for how they’re used. They come with built-in expense management that automates expense submissions and approvals. Instead of chasing receipts or waiting for manual sign-offs, expenses are automatically routed to the right manager for approval. Your team spends less time on admin and you get faster visibility into company spend.

Airwallex is more than just a virtual card issuer. It’s an all-in-one financial platform designed to help you manage money across markets. Beyond cards, you also get:

• Global Accounts: Send and receive like a local in 20+ currencies

• Payments: Accept payments worldwide via cards and other local payment methods

• Spend: Manage expenses, bills, and approvals in one dashboard

• Yield: Put idle balances to work and earn returns on SGD and USD 

Every feature works together, so you spend less time on admin and more time scaling your business.

How to integrate Airwallex Corporate Cards into your business system

Airwallex virtual cards are designed to work smoothly across your business. It takes a few steps to get started:

1. Create an Airwallex account and get verified: Sign up and complete verification to activate your Business Account.

2. Fund your account: Add funds in the currency you want to spend via local transfer.

3. Issue your first card: In the dashboard, go to Cards → Create card. Then choose a virtual or physical card. Decide if this will be a Company (shared) card or an Employee (individual) card. Set the billing currency and name the card, then submit. Virtual cards are ready to use instantly, while physical cards will arrive in the mail.

4. Set card controls: Define controls like spend limits, approved merchants, countries, and transaction types. You can set card controls during card creation, or update them later. 

5. Turn on Expense Management: Automate expense submissions and route approvals to the right manager, so your team spends less time on admin.

6. Connect your systems: Link Airwallex to Xero, Netsuite, and other accounting tools to sync spend and automate reconciliation.

Frequently asked questions (FAQs)

What is the difference between virtual cards and physical cards?

Virtual cards exist entirely online. You get a unique card number, expiry date, and CVV that can be used instantly for digital payments. Physical cards are plastic cards you can tap, swipe, or insert for in-person purchases. Airwallex Corporate Cards are available as virtual or physical cards.  

What is the difference between a company card and an employee card?

 The difference between Airwallex's company cards and employee cards is who they’re issued to and how they’re used. A company card is created in your business name and works best for shared expenses, with the option to securely share access with up to three team members. An employee card is linked to a single staff member. They have direct visibility of their spend and can control features like freezing the card.

Can I withdraw cash from virtual cards?

Virtual cards are made for online and in-app payments, not for ATM withdrawals. Some providers may let you move funds from a virtual card into a linked account that’s accessible by a physical card, which can then be used to take out cash.

Are virtual cards safe?

Yes, virtual cards are highly secure. Each one comes with a unique card number and can be set with custom spend limits, expiry dates, or locked instantly if needed. Even if details are compromised, the risk of loss is minimal – giving your business stronger protection and more control over every transaction.

Should I use a virtual card for my business?

Yes, virtual cards can benefit your business, and in some cases, they can be a game changer. Here are some scenarios where they’re especially useful:

• Business travel: If your team travels frequently, virtual cards take the pain out of expense reporting and reimbursements. You can set a limit on each card that works as the employee’s per diem, giving them access to meals and transport while keeping spend within budget.

• International teams and contractors: No need to open local bank accounts where your offshore teams are based. Virtual cards can be issued instantly and shared with overseas teams from day one. 

• Subscriptions and vendor payments: Virtual cards are ideal for managing recurring payments like software services or services that bill based on use, such as social media ads. You can issue a card per vendor to track payments, and control unpredictable usage-based costs by placing spend limits. If the service is no longer needed, simply deactivate the card to stop future charges.

• Fleet management: Virtual cards make it easier to stay on top of your fleet’s expenses. By linking cards to specific vehicles or fuel partners, you have the visibility you need to keep costs under control, enforce spend policies, and even uncover opportunities to save. 

Sources:

1. https://www.verifiedmarketreports.com/product/global-virtual-cards-market-growth-status-and-outlook-2019-2024/ 

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

3. https://www.pymnts.com/news/b2b-payments/2022/48-of-businesses-say-theyre-unprepared-to-handle-virtual-cards 

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, or guarantees regarding content accuracy, completeness, or currentness. Product features, pricing and other details are subject to change. Airwallex does not guarantee the continued accuracy of this information and is not responsible for any inaccuracies that may arise from such changes. This publication is not intended to be relied on for the purpose of making a decision about a financial product. Users are encouraged to conduct their own verification and seek their own advice.If you would like to request an update of the content in this publication, 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.