Virtual Credit Cards for B2B Payments: What They Are & How They Work for Businesses

Do you want to streamline your B2B payments, reduce costs, and earn valuable rewards?

Virtual credit cards are the answer.

In this guide, you'll discover what B2B virtual credit cards are, how they work, and why they're a game-changer for businesses. Consider this: 81% of US businesses still pay AP vendor payments by paper check, even though it costs over $10 to process each check—making it both expensive and time-consuming. 

Additionally, 56% of US companies have experienced B2B payment fraud, with 24% losing over $100,000, as checks are the most vulnerable to fraud.

Virtual cards offer enhanced security, improved tracking, and increased control over your company's spending. Plus, they can extend your working capital and help you save money on payment processing fees.

So if you're ready to take your B2B payments to the next level, keep reading to learn everything you need to know about virtual credit cards for business.

What is a Virtual Credit Card for Businesses?

  • Virtual credit cards are digital payment solutions that provide secure, single-use card numbers for business transactions.
  • They offer enhanced control, customization, and security compared to traditional physical credit cards.
  • Virtual cards streamline B2B payments, simplify expense management, and strengthen vendor relationships.

A virtual credit card for business is a digital payment method that enables companies to make secure, convenient payments without the need for a physical credit card.

These 16-digit virtual card numbers function just like traditional credit cards but exist solely in electronic form. 

Virtual cards offer businesses enhanced control, customization, and security features, making it an attractive option for managing B2B transactions and simplifying expense tracking.

Examples of Virtual Credit Cards for Business

Virtual credit cards come in various forms to cater to different business needs. Some common examples include:

Single-Use Virtual Cards

These virtual card numbers are generated for a specific, one-time purchase. Once the transaction is complete, the card number automatically deactivates, preventing any further use. This feature is particularly useful for businesses that want to avoid storing card details or reduce the risk of unauthorized transactions.

Recurring Virtual Cards

For businesses that regularly pay for subscriptions or have ongoing expenses with a particular vendor, recurring virtual cards offer a convenient solution. These cards are set up with a specific spending limit and expiration date, allowing for automatic payments over a predetermined period. This simplifies the management of recurring expenses and helps businesses maintain better control over their cash flow.

Vendor-Specific Virtual Cards

Some businesses opt to create virtual cards designated for transactions with a specific supplier or vendor. By setting customizable spending limits for each vendor, companies can streamline their payment processes, strengthen vendor relationships, and gain better visibility into their spending habits. This level of granular control helps businesses optimize their accounts payable operations and reduce the risk of fraud or misuse.

How Virtual Credit Cards Work for Businesses

Virtual credit cards operate on the same payment networks as traditional credit cards, such as AmericanExpress, Visa or Mastercard.

When a business needs to make a payment, they generate a unique virtual card number through their issuing bank's online platform or mobile app. This number is then provided to the vendor for processing the transaction.

Behind the scenes, the virtual card is linked to the company's main credit account, allowing for seamless reconciliation and reporting. However, since the virtual card number is distinct from the primary account number, it adds an extra layer of security. Even if the virtual card details are compromised, the company's main credit account remains protected.

Virtual Card Benefits for B2B Transactions

  • Virtual credit cards offer numerous advantages for B2B transactions
  • Businesses can save money, enhance security, and improve expense tracking
  • Virtual cards provide increased control and customization over spending

Reduced Costs

Traditional paper checks are still widely used in B2B payments, with 81% of US businesses relying on this method for their accounts payable (AP) vendor payments. However, processing a single B2B payment by check can cost over $10, making it an expensive and time-consuming process. Virtual credit cards offer a cost-effective alternative, with lower payment processing costs compared to paper checks.

By switching to virtual cards, businesses can significantly reduce their AP expenses and streamline their payment processes. The cost savings can add up quickly, especially for companies that process a high volume of B2B transactions. Additionally, virtual cards eliminate the need for manual check writing, signing, and mailing, further reducing the time and resources required for payment processing.

Earn Valuable Cash Back and Rewards

Virtual credit cards offer businesses the opportunity to earn cash back and other rewards on their B2B transactions. Many virtual card providers offer competitive rewards programs, allowing companies to earn points or cash back on every purchase made with their virtual cards.

These rewards can be used to offset business expenses, reinvest in the company, or provide incentives for employees. By strategically using virtual cards for B2B payments, businesses can maximize their rewards earnings and enjoy additional financial benefits beyond the cost savings associated with reduced payment processing fees.

Enhanced Security

One of the most significant advantages of virtual credit cards is the enhanced security they provide. Virtual cards use unique card numbers for each transaction, minimizing the risk of fraud and data breaches. If a virtual card number is compromised, it can be easily canceled without affecting the primary corporate credit card account.

Virtual cards also offer customizable spending limits, further reducing the potential for unauthorized transactions. By setting strict limits and short expiration dates, businesses can ensure that even if a virtual card number falls into the wrong hands, the potential for misuse is greatly limited.

Moreover, virtual cards reduce the exposure of the company's primary corporate credit card information. Since virtual card numbers are used for specific transactions or vendors, the actual corporate credit card details remain secure and unexposed.

Improved Expense Tracking

Virtual credit cards make it easy to track and categorize B2B expenses. Transactions made with virtual cards can be easily sorted by vendor, department, or project, allowing for more accurate and efficient expense tracking.

Real-time spending visibility is another key benefit of virtual cards. Finance teams can monitor transactions as they occur, providing better insights for budgeting and forecasting. This real-time data helps businesses make informed decisions and adjust their spending strategies as needed.

Virtual cards also streamline the reconciliation and reporting process. With transactions automatically categorized and matched to specific virtual card numbers, reconciling expenses becomes much simpler and less time-consuming. This improved efficiency allows finance teams to focus on more strategic tasks and analysis.

Increased Control and Customization

Virtual credit cards offer a high level of control and customization over B2B spending. Companies can set specific spending limits for each virtual card, ensuring that expenses stay within budget and reducing the risk of overspending.

Virtual cards can also be assigned to individual employees, departments, or vendors, allowing for more granular control over who has access to company funds. This level of customization helps prevent misuse and enables businesses to enforce their spending policies more effectively.

If a virtual card needs to be canceled or modified, it can be done easily without affecting other transactions or the primary corporate credit card account. This flexibility allows businesses to adapt quickly to changing circumstances and maintain tight control over their B2B spending.

Extended Working Capital

Virtual credit cards can help businesses extend their working capital by providing more time to make payments compared to traditional checks or ACH payments. Depending on the virtual card provider and the terms of the agreement, companies may have up to 30 days or more to pay their virtual card balances.

This extended payment period allows businesses to better manage their cash flow and take advantage of early payment discounts offered by some vendors. By using virtual cards for B2B transactions, companies can keep their funds in interest-bearing accounts for longer, maximizing the value of their working capital.

Additionally, the extended payment terms provided by virtual cards can help businesses navigate temporary cash flow challenges or take advantage of opportunities that require upfront investments. The flexibility and additional working capital offered by virtual cards can be a valuable tool for businesses looking to optimize their financial management.

Want to learn more about the benefits of virtual cards? We talked with 7 finance professionals on why they love using virtual cards - check it out to see what they had to say.

Process for Using Virtual Credit Cards for Payments

Setting Up a Virtual Credit Card Program

To get started, businesses need to select with a virtual card provider or leverage their existing corporate card issuer. Many major banks and fintech companies now offer virtual card solutions designed for B2B payments. The setup process usually requires providing basic company information and undergoing a credit approval process.

Once approved, the business can access a virtual card management platform where they can create, distribute, and monitor virtual cards. 

Creating and Issuing Virtual Cards

Through the virtual card management platform, businesses can create unique virtual card numbers for each vendor, purchase, or employee expense. This granular level of control helps prevent fraud and overspending – all while earning cash back rewards and rebates. 

When creating a virtual card, the business can set a specific spending limit based on the intended use case. For example, a virtual card for a one-time supplier payment might have a limit equal to the invoice amount. Cards for recurring expenses, like monthly software subscriptions, can have limits that reset each billing cycle.

Making Secure Online and Mobile Payments

Once a virtual card is created, the 16-digit card number, expiration date, and CVV can be used to make payments just like a traditional credit card. However, virtual cards offer an added layer of security for online and mobile transactions.

Since virtual cards are not tied to a physical piece of plastic, there is no risk of the card being lost, stolen, or compromised. If a virtual card number is ever exposed in a data breach, it can be easily canceled and replaced without impacting other virtual cards or the underlying corporate credit account.

Streamlined Reconciliation and Reporting

Virtual cards can integrate directly with a company's existing accounting software and expense management systems. This integration allows for automated reconciliation of virtual card transactions, saving time and reducing manual data entry errors.

When a virtual card is used to make a purchase, the transaction data, including the amount, merchant details, and any custom reference fields, flows seamlessly into the company's financial reporting tools. This level of visibility helps businesses track spending in real-time, identify trends, and make informed budgeting decisions.

Use Cases for Virtual Cards in B2B Payments

Virtual cards can be used for a wide range of B2B payment scenarios, including:

  • Vendor payments and invoice processing
  • Employee travel and expense reimbursement
  • Recurring subscriptions and services
  • One-off purchases or infrequent spending

By using virtual cards for these common B2B expenses, businesses can maintain tighter control over spending, reduce the risk of fraud, and streamline their payment workflows.

As virtual credit cards continue to gain adoption in the B2B space, more businesses are discovering the benefits of this secure and efficient payment method. In the next section, we'll explore the steps involved in setting up a virtual card program for your business.

Setting Up Virtual Cards for Business

  • Streamline your business expenses with virtual credit cards
  • Enjoy enhanced security, control, and flexibility in managing company spending
  • Seamlessly integrate virtual cards with your existing accounting and expense management systems

Choose a Virtual Card Provider

Selecting the right virtual card provider is crucial to ensure your business needs are met effectively. Start by researching banks and fintech companies that offer virtual credit card solutions. Compare their features, fees, and integration capabilities to find the best fit for your organization.

Consider factors such as spending limits, the ability to set custom controls, real-time transaction monitoring, and reporting capabilities. Look for providers like Centime that offer seamless integration with your existing accounting software and expense management systems. This will simplify the implementation process and ensure a smooth transition to using virtual cards.

Apply and Undergo Approval Process

Once you've chosen a virtual card provider, it's time to submit an application. Gather the required business information and financial documents, such as your company's legal name, tax identification number, and recent bank statements.

The approval process typically involves a credit check to assess your company's creditworthiness. Providers will evaluate factors like your business's revenue, cash flow, and credit history to determine your eligibility and set appropriate credit limits.

Set Up Virtual Card Program

Upon approval, work with your virtual card provider to set up your program. Designate program administrators who will be responsible for managing the virtual cards, setting spending limits, and monitoring transactions.

You’ll also need to tell your suppliers you’d like to update your payment type. Need help with those conversations? Try using our virtual card script to convince your vendors about the perks of virtual cards. 

Collaborate with your provider to integrate virtual cards with your existing accounting and expense management systems. This integration will automate data synchronization, eliminating manual data entry and reducing the risk of errors. It will also enable real-time visibility into company spending, making it easier to track and control expenses.

Centime's B2B Virtual Card

Centime Credit Card empowers finance teams with an innovative virtual card solution that streamlines supplier payments at scale and increases AP ROI. Centime’s one-stop-shop for B2B payments helps your team transition to virtual card payments, optimizing the entire invoicing-to-payment process and provides remarkable savings through cashback rebates. 

Benefits of Using Centime Credit Card

Effortlessly manage supplier payments

Versatile electronic payment methods such as Centime Credit Card offer a swift, secure way to settle invoices, seamlessly integrating with your accounting system.

Transform payments into ROI

Adopting virtual card payments simplifies procurement and delivers substantial savings through cash-back incentives.

Tap into credit and streamline B2B payments 

Quickly and simply gain access to a new line of credit, Centime Credit Card, a virtual card designed to pay card-accepting suppliers.

Mitigate fraud risk and easily track payment status

Avoid sharing banking details by paying with a virtual card and easily track payments status along the way.

Extend working capital 

Make the most of the credit available to you and leverage 20-50 additional days of working capital.

Centime Credit Card vs Other Virtual Cards

Centime's virtual card options stand out by integrating directly within the AP automation workflow while offering cash-back rebates, providing a better way to manage the end-to-end invoice through payment process.

Seamless integration with accounting systems and easy implementation make Centime Credit Card user-friendly. Enhanced financial visibility and robust security measures ensure efficient and secure transactions.

Plus, Centime's exceptional customer support guarantees a superior experience, setting it apart from other payment solutions.

How to Set Up Virtual Cards with Centime

Setting up Centime Card Card is simple:

  1. Apply for CentimeCredit
  2. Once approved, Centime Credit Card is included with your Centime AP subscription
  3. Activate your Centime Credit Card and start making payments

Using a Centime Credit Card lets you streamline supplier payments while extending your working capital.

Virtual Card Security Features

  • Virtual cards offer enhanced security through single-use numbers, customizable controls, and real-time monitoring
  • Businesses can prevent fraud and maintain tight control over employee spending
  • Advanced features like merchant category restrictions and fixed expiration dates provide an extra layer of protection

Single-Use Numbers

One of the most powerful security features of virtual cards is the use of single-use numbers. Each time a virtual card is used for a transaction, a unique, randomly-generated card number is created specifically for that purchase. This means that even if a merchant's system is compromised and card data is stolen, the information is essentially useless since the card number can't be used for any future transactions.

Single-use numbers effectively prevent card details from being stored or compromised, reducing the risk of fraud and unauthorized charges. This is particularly important in today's digital landscape, where data breaches and cyber attacks are becoming increasingly common. By using a different card number for each transaction, businesses can minimize their exposure to these threats and keep their financial information secure.

How Single-Use Numbers Work

When a business makes a purchase using a virtual card, the virtual card provider generates a new, unique card number that is linked to the company's main account. This number is used for that specific transaction only and becomes invalid once the purchase is complete. If a hacker manages to obtain that card number, they won't be able to use it for any other purchases, rendering the stolen information useless.

Customizable Controls

Another key security feature of virtual cards is the ability to set customizable controls. Businesses can set transaction limits to manage spending, specify approved merchants and purchase categories, and set fixed expiration dates for enhanced control. These features allow companies to establish strict spending policies and enforce them automatically, without the need for manual oversight.For example, a business can create a virtual card to pay a vendor for an upcoming tradeshow. The card can be set to expire after a specific date, such as the date of the event. This level of control helps prevent overspending, unauthorized purchases, and misuse of company funds.

3 Benefits of Customizable Controls

Customizable controls provide businesses with several benefits, including:

  1. Reduced risk of fraud and misuse: By setting strict limits and restrictions on virtual cards, companies can minimize the potential for fraudulent activity and ensure that funds are used only for approved purposes.

  2. Improved budget management: With the ability to set spending limits and track expenses in real-time, businesses can better manage their budgets and avoid overspending.

  3. Increased visibility and control: Customizable controls give finance teams complete visibility and control over employee spending, allowing them to identify and address any issues quickly.

Real-Time Monitoring

Virtual cards also offer real-time monitoring capabilities, allowing businesses to track card usage and spending as it happens. This enables finance teams to identify and address suspicious activity immediately, without waiting for monthly statements or expense reports.Real-time monitoring tools typically provide a centralized dashboard where administrators can view all virtual card transactions, including the merchant name, purchase amount, and date. If any unusual or unauthorized activity is detected, the team can quickly investigate and take appropriate action, such as canceling the card or adjusting the spending limits.

The Importance of Real-Time Monitoring

In today's fast-paced business environment, real-time monitoring is essential for maintaining tight control over company spending and preventing fraud. By catching suspicious activity early, businesses can minimize financial losses and prevent potential damage to their reputation.Real-time monitoring also provides valuable insights into spending patterns and trends, allowing finance teams to optimize their expense management processes and make data-driven decisions.

Virtual Card Expense Tracking

  • Automatically categorize transactions for faster reconciliation
  • Gain real-time visibility into spending for better decision-making
  • Streamline reporting and identify optimization opportunities

Automatic Transaction Categorization

Virtual credit cards allow businesses to assign specific cards to vendors, projects, or departments, ensuring that expenses are automatically categorized as transactions occur. This feature significantly reduces the time and effort required for manual expense categorization and reconciliation.

By linking virtual cards to specific expense categories, finance teams can quickly identify and track spending across different areas of the business. This automated categorization process eliminates the need for tedious data entry and minimizes the risk of human error, leading to more accurate financial records and faster month-end closing processes.

Benefits of Automatic Transaction Categorization

  1. Time savings: Automated categorization significantly reduces the time spent on manual expense classification and reconciliation. They can also streamline expense management by introducing more transparency, control, and efficiency.
  2. Improved accuracy: By eliminating manual data entry, businesses can minimize errors and ensure more accurate financial records.
  3. Faster financial close: With expenses automatically categorized, finance teams can close the books more quickly at the end of each month or quarter.

Real-Time Spending Visibility

One of the key advantages of virtual credit cards is the ability to monitor transactions in real-time. As expenses occur, finance teams can track spending across various categories, vendors, and projects, providing valuable insights for budgeting, forecasting, and decision-making.

Real-time visibility into spending patterns allows businesses to identify potential issues or overspending early on, enabling proactive management of expenses. By monitoring transactions as they happen, companies can quickly detect and address any unauthorized or fraudulent purchases, minimizing financial losses and ensuring compliance with corporate spending policies.

Moreover, real-time spending data can be used to inform future budgeting and resource allocation decisions. By analyzing historical spending patterns and identifying trends, businesses can make data-driven decisions to optimize their expenses and improve overall financial performance.

Streamlined Reporting and Analytics

Virtual credit cards offer powerful reporting and analytics capabilities that streamline expense management and provide valuable insights for businesses. With just a few clicks, finance teams can generate comprehensive expense reports by card, vendor, project, or timeframe, allowing for granular analysis of spending patterns and trends.

These reports can help identify areas where expenses can be optimized, such as negotiating better rates with frequently used vendors or eliminating unnecessary subscriptions. By leveraging the analytics provided by virtual credit card platforms, businesses can make informed decisions to reduce costs and improve their bottom line.

Furthermore, many virtual credit card solutions offer seamless integration with popular accounting software, such as QuickBooks or NetSuite. This integration allows for the automatic transfer of expense data, eliminating the need for manual data entry and reducing the risk of errors. By streamlining the expense reporting process, virtual credit cards enable finance teams to focus on more strategic tasks, such as financial analysis and forecasting.

Benefits of Streamlined Reporting and Analytics

  1. Granular expense analysis: Generate reports by card, vendor, project, or timeframe for detailed insights into spending patterns.
  2. Cost optimization opportunities: Identify areas where expenses can be reduced or eliminated based on spending data.
  3. Seamless accounting integration: Automatically transfer expense data to accounting software for efficient record-keeping and reconciliation.

Integration with Accounting Software

Virtual credit cards can integrate with various accounting software solutions, including QuickBooks, NetSuite, Sage Intacct, Microsoft Dynamics and others. This integration ensures seamless data transfer, reducing errors and manual data entry.

Virtual credit cards offer a secure, flexible, and cost-effective solution for B2B transactions. They provide enhanced control, customization, and real-time expense tracking, making them an attractive alternative to traditional payment methods. By minimizing fraud risk, streamlining vendor payments, and extending working capital, virtual cards can help businesses optimize their financial processes.

Implementing a virtual card program is straightforward, with providers like Centime offering seamless integration and user-friendly features. As more companies recognize the benefits of virtual cards, their adoption in the B2B landscape is set to grow exponentially.


Frequently Asked Questions About Virtual Cards

Is a virtual credit card a good idea?

For most businesses, virtual credit cards offer significant advantages. They provide enhanced security, greater control over spending, and simplified expense tracking. By reducing the risk of fraud and enabling more efficient payment processes, virtual cards can be a smart financial tool for companies of all sizes.

What is the point of a virtual credit card number?

The primary purpose of a virtual credit card number is to add an extra layer of security to online transactions. Since the virtual number is used instead of the main credit card number, it helps protect sensitive financial information from potential breaches or unauthorized use. Additionally, virtual numbers can be set with specific spending limits and expiration dates, giving businesses greater control over their expenses.