The benefits of virtual cards for eCommerce businesses
New technologies have allowed eCommerce businesses to reach new levels of growth. This is great for brands, but growth also comes with complexities. This is particularly true if a business needs many different services, vendors, or employees to run its operations.
While greater growth comes with greater risk, it also comes with more audience demands. Without a brick-and-mortar store, eCommerce retailers are in a unique position to meet different customer preferences. Brands must prioritize the online user shopping experience to keep customers coming back while also managing vendors and employees.
This is where virtual cards come in handy.
What is a virtual card?A virtual card is exactly what it sounds like: a business card without plastic (or metal). Essentially, it allows you to use all the functions of a physical card, but it lets you perform those functions better.
Virtual cards generate unique card numbers for transactions you make. You can use the card number for a specific transaction on an ongoing basis or use it once and then deactivate it.
Fraud protection and added security
As technologies advance, so do hackers. Even the smallest incident of fraud can have a big impact on small or large businesses. Paying with virtual cards adds another layer of security to protect a business’s finances.
That’s because virtual cards have definite perks:
They don’t store personally identifiable information (PII).
They can’t be physically stolen.
You can deactivate them in seconds.
These unique qualities make virtual cards much more secure than physical cards. They don’t share bank account numbers and can have a preset-maximum spending limit to protect brands from fraud.
Virtual cards also use a one-time bank account number for each payment rather than the same single row of numbers for every transaction. Plus, brands no longer have to panic if they lose a card because criminals can’t steal important information by simply nabbing a physical card.
Financial control and management
eCommerce business managers can better control their finances with virtual cards. They enjoy better security and control by setting spending limits and custom expiration dates for company spending. Plus, you prevent overspending and can trust employees with corporate cash that retains the business’s budget.
With virtual cards, you can manage cash flow within a complex payment system. Simple oversight and management can prevent late payments and allow managers to receive financial data that the system collects. This new level of transparency allows eCommerce managers to improve internal efficiency by accessing information that encourages improvement.
An accounting department no longer needs to waste time tracking receipts or keeping tabs on spending logs for unnecessary transactions. Virtual cards simplify the financial process.
Third-party suppliers and vendors often play a vital role in an eCommerce business’s success. Brands often rely on these relationships to keep operations running smoothly and to fulfill orders.
Having multiple vendors can result in a complicated payment process. ManyeCommerce brands must keep track of numerous payments to various vendors each month. However, virtual cards streamline this process by giving brands greater control over their finances.
Additionally, eCommerce brand managers need to control their employee spending. Instead of using physical credit cards to make business purchases, managers can give employees virtual cards.
Managers who distribute virtual cards can set spending limits, expiration dates, and more for specific employees. This payment method allows managers to easily and effectively distribute and track employee funds to ensure transparency.
Virtual cards and dropshipping
Many eCommerce businesses follow the dropshipping operational model. Dropshipping refers to an order fulfillment method that lets stores sell products from a third-party supplier, which then ships the order directly to the customer. The eCommerce brand that made the sale must then collect customer payments and pay the supplier.
eCommerce businesses that follow the dropshipping method use virtual cards to ensure smooth and safe transactions among the business, customers, and suppliers. With so many parties involved in cash transactions, virtual cards can safely and efficiently streamline a complex process.
In the eCommerce world, convenience is key for both customers and brands. With virtual cards, creating or deactivating a card is simple. Businesses save time because they no longer need to write checks or hand out physical corporate cards.
You can access virtual cards anywhere, at any time. There’s no more worrying about leaving a wallet at home or losing important information because anyone misplaces a card.
One of the most important benefits of virtual cards is that virtual banks are open 24/7. Traditional banks have set working hours, but virtual banks can provide expert assistance in an instant. Managers can do all this without driving to a brick-and-mortar bank — with a few clicks on a laptop or mobile device, managers can perform transactions and get help with their account.
Lastly, you can forget the 7–14-day waiting time to activate your bank account. Because computers run everything digitally, you can open virtual card accounts quickly, with no paperwork or hassle.
Virtual cards also allow your accountants to focus on more important financial tasks. They don’t have to look for the mistakes that always come with traditional manual banking.
Overall, virtual cards offer true convenience for employers, employees, and customers.
Meet the Airwallex Borderless Card
Virtual cards provide multiple benefits for eCommerce businesses. A virtual card is not only a safer alternative to traditional payment options but also allows for more effective financial management.
Leanna Chraghchian holds a degree in Business Administration from UC Berkeley and is currently working to complete Berkeley's Fifth Year Master of Information and Data Science program. Leanna loves the world of marketing, with great interest in the role data plays to help businesses advance. When away from the laptop, you can find Leanna on the basketball court or at the beach!
Why accepting payments smarter matters more than ever before