Every workflow will eventually be disrupted — or digitized — over a long enough horizon. After all, nothing is perfect. Any process can be improved by a business that knows what it wants to get by enhancing or modernizing. A prime candidate for disruption is the traditional invoicing process, which includes wiring money, paper checks and mountains of paperwork and bureaucracy surrounding the occasion.
That’s part of the reason why industry observers and insiders believe virtual cards are about to change the game when it comes to B2B payments.
Fortunately, the forward march of enterprise progress is inevitable — and increasingly virtual.
“Virtual cards are a great tool for getting all that friction out of the B2B process; vendors can process them immediately with no wait,” Hanks said.
He added that on the side of the payor, virtual cards allow them real-time insight into expense tracking by vendor and category.
Virtual card technology can also mimic various traditional commercial card products, eliminating the need for a separate purchasing card. This customization allows companies to tailor virtual cards for specific purposes, ensuring that expenses are allocated correctly and efficiently.
Over 100 trillion dollars crisscross the globe in B2B payments annually, with a good percentage within the domestic United States. But this total payments volume belies the difficulty that many businesses face when making payments.
Virtual cards can help firms reduce B2B errors, improve cash management and increase the transparency of their accounting processes by removing the complexity and redundancy inherent to the process of trying to track disparate expenses across multiple categories and vendors.
“On the back end, everything is so streamlined,” Hanks explained. “Firms can put controls around the virtual cards at a merchant level, so that they are able to know by each card that these are all my purchases with this vendor or with this airline for travel, whether it’s a single purchase or a repeat expense occasion.”
But it doesn’t stop there. Virtual cards also come with built-in controls upfront, preventing overspending or unauthorized transactions. They also provide enhanced security, helping firms avoid fraud and adhere to internal compliance programs.
The expenses are always going to be controlled somewhere, but this way, the control is there before the money is spent — instead of the other way around. “You can build all of those [controls] in upfront to the card so the controls are right there,” Hanks said. “And that’s another use case we’re seeing more of, which is one-time or short-term use corporate cards that are tailored with specific occasion-based spend controls such as not being able to be spent at a bar, or daily limits on food, that get built right into the card itself.”
Of course, not every company is quick to embrace virtual card programs. Institutional inertia and resistance to change can hinder adoption, as well as the inability of current systems to accommodate their use.
“If it’s difficult to use, then you’re not getting the benefits of a virtual card,” Hanks said. “It’s not just the ability to have a platform that has virtual cards, but there needs to be a good and intuitive UI/UX so that companies can actually figure out how to use and leverage virtual card capabilities efficiently.”
Frankly, he said, there are some businesses and banks that are just not on platforms that support virtual cards — the way of doing payments has been the same way for so long that companies are just figuring out the advantages they can get using solutions from firms like i2c.
Companies need to be educated about the benefits and potential cost savings of virtual cards, while virtual card platforms need to be marketed effectively to reach a wider audience.
With the right combination of education and promotion, virtual cards have the potential to revolutionize the way companies manage their B2B and internal expenses.
And as more companies overcome institutional inertia and realize the advantages of virtual cards, the growth of virtual card platforms is only expected to continue.
“It’s a fast-growing area,” Hanks said.