Virtual cards are digitized cards that allow businesses and consumers to transact easily. A virtual credit or debit card is a 16-digit random number with a Card Verification Value or a CVV code that can be used to pay for goods, services, and subscriptions online or over the phone. Virtual cards make it possible to transact with a debit or credit card number without actually using your account number, as they generate unique card numbers associated with your account. Virtual cards also thwart hackers because that unique card number cannot be traced back to the original credit card number or debit account. To further the fraud resilience you can also assign an expiration date and a spending limit to a virtual card, or specify what types of retailers the virtual card can be used at.

Virtual cards bring benefits to both businesses and consumers. For businesses, virtual cards can help better control employee spending than reimbursements or corporate cards. Companies using virtual cards can set spending limits, allow what type of purchases can be made on the cards and designate whether the card can be used once or multiple times. 

For example, the rise of remote work means more employees are buying their own office supplies and other work equipment. Virtual cards can allow employers to set limits on how much remote employees spend on office supplies. Virtual cards can also be used to provide corporate card access to employees working remotely who may not have access to a physical card delivered to their office. 

Virtual cards can be issued instantly and payment settlement happens immediately, improving cash flow data. 

For consumers, a virtual card lets them access a new credit or debit card immediately from a card provider, faster than they would if they were waiting for the physical card to arrive in the mail. The virtual card will carry a different number than the physical card. Consumers can then instantly use the virtual card through a mobile wallet like Apple Pay or Google Pay. 

A virtual card can also be used to issue an instant replacement card to a consumer who has lost their physical card and cannot wait several days for a replacement to be mailed (such as someone away from home on vacation).

Either credit or debit cards can be virtual cards. They are available for business and consumer use from all the major card issuers. 

Both businesses and consumers increasingly use virtual cards for a number of applications. For businesses, virtual cards help you issue a debit or credit card virtually and immediately instead of having to distribute a physical card in-person. Virtual cards are the engine behind many B2C and B2B applications, fueling services such as point-of-sale lending, neobanking services and credit builder services. And the growing number of contract and gig employees can be paid more or less instantly through virtual cards.

Virtual cards can also be used when a single order is tied to multiple payments, such as drop shipping across more than one fulfillment partner. And when companies need to make disbursements such as the paying out of rebates and warranties, they can issue a virtual card to be used once. 

For both consumers and businesses, virtual cards bring the benefit of not having a physical card that can be lost or stolen, or even copied or cloned. If you set a virtual card as a single-use card, it will expire immediately after it is used, preventing future fraudulent use of the card.

Virtual cards generate a unique 16-digit card number that can be used for one or several transactions. A virtual card is not a physical plastic card, but a number that can be used during a card-not-present (CNP) transaction, such as online shopping or signing up for a subscription. The card pulls funds or makes a credit to the same balance as a physical card, but using a different card number, providing additional security against online fraudsters.

With the growth of e-commerce and the staggering $5.44 trillion in annual digital purchases globally, according to ResearchAndMarkets.com, the tide is only building for virtual cards and the fintechs that help companies leverage them. 

Given the increase in e-commerce and rise in American online purchases made through digital wallets and virtual cards, the move toward virtual cards and the fintechs that help companies leverage them is likely to rise. The global value of virtual card transactions is projected to reach $6.8 trillion in 2026, up from $1.9 trillion in 2021, according to Juniper Research.

Virtual cards allow businesses to provide near instant access to credit and debit for employees, while also making it easier to limit where and how much your employees spend, or having to track down who is responsible for a given transaction. If you could benefit from that immediate access, along with increased fraud protection and the ability to save time and money, consider using virtual cards. 

Synapse’s card programs lets companies issue cards in combination with deposit and For Benefit Of or FBO accounts. You can generate virtual or physical cards with dynamic spending limits, along with the ability to pause, terminate, and replace your cards as needed. If your business is interested in virtual cards we’re here to help.