Supplier skepticism is a perennial obstacle. Costs and legacy processes often take center stage.
Abhishek, global head of B2B Acceptance at Visa Commercial Solutions, told PYMNTS CEO Karen Webster that many corporates feel they’re doing just fine with ACH and bank transfers, while in reality virtual cards can improve their operations significantly.
Suppliers have pushed back on fees and integration hassles, and thus acceptance is not what it could be, Webster noted.
But there’s an urgency to reexamine the ways in which virtual cards can soothe some of the pain points that exist between buyers and suppliers. “Late payments are a universal drag on businesses of every size and sector,” with some firms seeing 3% to 5% of their working capital eroded by delayed receivables, Abhishek said.
There’s evidence that executives are embracing the cards, given the fact that, as PYMNTS Intelligence and Visa’s data show, 53% of CFOs are using corporate and virtual cards data to reduce DSO data. But there’s significant room for more adoption.
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Education Over Innovation: Changing the Conversation
Abhishek maintained that reframing virtual cards as business improvement tools, rather than payment products, sparks new interest. He emphasized how education, rather than innovation alone, is the core driver for adoption.
“We need to step away from that very traditional mindset lens of looking at commercial cards as just another card,” he told Webster. “Our value of commercial card acceptance research shows that suppliers can actually drive revenues. They can actually drive working capital benefits through DSO acceleration and process efficiencies.”
For suppliers that make the leap, the financial upside is proven. If they invest a dollar in acceptance, they typically generate anywhere from $1.30 to $1.50 in savings that accrue to the bottom line, Abhishek said, a finding echoed in both Visa and PYMNTS research. In sectors with chronically long days sales outstanding (DSO) such as healthcare, “there is not a corporate out there that does not benefit from it.”
Bottom-Line Benefits: Tangible ROI and Competitive Gains
Fast payment isn’t the only motivator. Virtual cards are also powerful data engines. “What virtual cards are doing, which is definitely better than some of the alternatives that exist today and are used most commonly, is to provide depth of information that comes in for the suppliers … on the reconciliation side, on the invoices they’re paid, when they are paid, what was the invoice date and other [information].” Abhishek said.
The same features strengthen fraud defenses. Single-use numbers and controlled spend limits reduce exposure compared with static account details.
Adoption varies widely by geography. North America has evolved to the forefront of virtual card acceptance, he said, but Europe still struggles with perception. On the Continent, virtual cards are viewed as akin to basic (and expensive) credit cards, he said. Interest is high in Asia, he told Webster.
These gaps reinforce the need for education across buyers, suppliers and banks.
Accelerating Adoption
Financial institutions can help broaden virtual card acceptance, Abhishek maintained. “Banks typically go out and are selling corporate cards as a payables program,” but for virtual cards to become the norm in supplier acceptance, legacy attitudes must be replaced by a data-driven, outcome-oriented approach.
Abhishek noted that reframing the conversation can help move treasurers and CFOs to focus on metrics beyond costs, where the key questions to ask include, “Would you be interested in a solution that actually offers you potential to increase sales, faster cash receivables, fraud prevention, risk mitigation, and better reconciliation than your bank transfer?”
Shifting the conversation to running a business more effectively, rather than simply focusing on card acceptance, can successfully pique a treasurer’s interest, as Abhishek said. “When you start to talk about virtual cards in the context of business outcomes, the light goes on. That’s the kind of education that changes minds,” he told Webster.
PYMNTS CEO Karen Webster is one of the world’s leading experts in payments innovation and the digital economy, advising multinational companies and sitting on boards of emerging AI, healthtech and real-time payments firms. She founded PYMNTS.com in 2009, a top media platform covering innovation in payments, commerce and the digital economy. Webster is also the author of the NEXT newsletter and a co-founder of Market Platform Dynamics, specializing in driving and monetizing innovation across industries.
Abhishek, global head of B2B Acceptance at Visa Commercial Solutions, is an expert in the B2B and commercial payments business. One of the few executives who intricately understands acceptance, the critical enabler for commercial payments.
