Virtual Cards vs. Traditional Payment Methods

As digital payments continue to grow in popularity, the global virtual cards market is expected to more than triple in size over the next five years.

Yet, many companies in the business (B2B) context still rely on traditional payment methods such as wire transfers, shared physical debit/credit cards, or even cash. These methods have been in use for years and serve their purpose, so why is the virtual card market set to grow so rapidly?

Most spend management platforms, such as Q-Card, have developed innovative software built around virtual cards to deliver maximum value to businesses. This software is available via an app on both mobile and desktop, ensuring easy access whether in the office or on the go. Here are five key advantages of switching from traditional payment methods to virtual cards:

1. Streamlined purchasing process with instant payments

Virtual card solutions typically offer apps available on both desktop and mobile devices, enabling businesses to establish pre-approval flows. Employees can request virtual cards with a predefined budget, which managers can approve in seconds. Once approved, the employee receives the virtual card and can immediately use it to pay for the expense.

Traditional payment methods often lack this level of control and simplicity. Employees are typically required to navigate complex purchase requisition processes, while the finance team manually processes payouts. Virtual cards, on the other hand, simplify tail spend management and offer easy scalability for growing businesses.

2. Multi-purpose usability

Virtual cards can be utilized for various purposes, such as:

• Consolidating all costs for a specific project, with the option to charge them back to a client.
• Managing department-specific budgets.
• Virtual cards are also ideal for specific use cases, including:
• One-time purchases.
• Monthly budgets (e.g., for sales teams or other field employees).
• Recurring expenses (e.g., software subscriptions).

Because the Q-Card is functionally more versatile, it covers a wider range of use cases, enabling the end user to accomplish more than with for example traditional credit cards.

"We are excited to start this project together with Q-Card and modernize our tail spend process with an intuitive and flexible solution that will be fully integrated with our financial system."

Heijmans

Heijmans

3. Real-time visibility

Virtual card platforms often include business intelligence (BI) dashboards, providing users with real-time insights into spending. Teams can track key metrics such as:

• The number of requests submitted and approved.
• Actual expenses versus forecasted spending.
• Spending amounts are categorized by expense type, cost center, GL code, project, and more

Unlike traditional methods, credit card statements are often processed only at the end of the month, while reimbursements and invoices arrive unexpectedly. Virtual cards, combined with the associated software that allows for pre-approvals, provide real-time visibility into expenses at multiple levels. This includes tracking per employee, department, or company-wide.

With this improved insight, finance and procurement teams can forecast future expenses more accurately, leading to better financial planning and control.

4. Global Acceptance

For companies operating on a global scale, equipping employees with widely accepted payment tools is essential. Virtual cards leveraging Visa and Mastercard schemes provide the global reach businesses need, with acceptance in over 200 countries worldwide.

This international compatibility ensures employees can purchase the products and services required to complete their tasks. No matter where they are.

5. Enhanced budget control and cost savings

Virtual card platforms often allow businesses to set budgets for individuals or teams, ensuring expenses remain within limits.

Processing reimbursements, non-PO invoices, and credit card expenses are time-consuming for employees, procurement teams, and finance departments alike. Also, manual processes often lead to inefficiencies and errors. By centralizing expense management on a single platform like Q-Card, businesses can:

• Implement or simplify the (consumer-like) purchase requisition process which reduces maverick spending.
• Automatically retrieve expense coding at the time of request and transaction.
• Seamlessly integrate with ERP or financial backend systems.

This eliminates manual coding errors and frees up time for employees to focus on value-adding activities, such as negotiating better supplier deals or strengthening client relationships.

Finally, working together with expense management platforms often enables the capture of receipts or invoices, increasing compliance with receipt submission and allowing your company to reclaim VAT.

Measure the impact of virtual cards today

Finally, working with expense management platforms often makes it easy to capture receipts or invoices. These platforms can, for example, send a notification and direct the user to their phone's camera, allowing receipts to be recorded immediately and preventing them from being forgotten later. This improves compliance with receipt submissions and enables your company to reclaim VAT.

Q-Card, a Quyntess company, is a trusted expert in helping organizations quantify the real improvement potential of managing spend with virtual cards. Eager to discover the potential within your organization? Use the links below to get in touch: