“Making the Case for Virtual Cards” – How Businesses Can Benefit


by Nick Campbell/Fraedom

Over recent ears, we have seen strong growth in business use of virtual cards, driven both by new technology and the ongoing consumerisation of the enterprise. Yet, despite these trends, virtual cards still account for a relatively small share of the commercial cards market.

Currently, Apple is doing a good job of introducing the concept of virtual cards to consumers with its Apple Pay solution, which enables users to make purchases at participating merchants on their Apple Watch or iPhone. Certainly, as awareness of and education around virtual cards has risen and their use in the consumer arena has become more strongly established, the demand from younger employees, in particular, for virtual cards in the workplace has grown. After all, the argument runs, if the technology is available and used widely by consumers, why wouldn’t commercial enterprises also want to adopt it?

For virtual cards to really take off in a commercial context, businesses need to put the right processes in place to make it easy for employees to get up and running with them. In order for this to happen, it is all about implementing the right procedures to drive fast uptake in a business context. Again, this will involve working with technology that employees are familiar with to make it possible.

Fortunately, the only device employees would need for this is a mobile phone onto which they can download an app – making the process not only simple but fast and cost-effective. For example, staff can use the app to request a virtual card, with this request being sent quickly to their line manager for approval and allowing them to instantly sign-off on it. The process then triggers the card to be automatically issued to the employee’s mobile app, effectively bringing the power of virtual cards into their hands quickly and easily. This immediacy means new users don’t need to wait around to be issued a physical card and can instantly make the transactions they need to fulfil their role.

While that makes sense for businesses, to drive further usage, organisations also need to extend the range of applications for which virtual cards can be used: moving beyond simple expense management into the procurement process, for example. The business case for this is strong as organisations are likely to experience a number of benefits. After all, it is faster, easier and cheaper to establish a procurement process underpinned by virtual cards than traditional paper-based processes.

Once virtual cards have become an established part of business processes, their effects will be felt across the entire organisation with the impacts of implementing virtual cards able to be broken down into three areas: the reconciliation, automation and security of processes.

They also provide businesses with the tools to empower employees and remove many of the paper aspects of their roles, while also giving them trust, control of spend and a greater degree of transparency. Similarly, with a larger percentage of the workforce now classed as ‘millennials’, businesses are changing, and virtual cards allow businesses to keep up with the demands of a changing workforce, offering the tools and technology the younger generations have come to expect.

For most businesses, moving away from traditional forms of payments to using virtual cards makes processes like expense management and the procurement process faster, cuts costs, and provides more immediacy and transparency. There are, however, also several benefits for employees more generally. With managers able to approve employees spending via an app on their phone, it empowers employees, shows they are a trusted member of the team and gives them confidence that their employer is forward-thinking and investing in the latest technology to give them the tools they need perform.


Nick Campbell is head of product strategy and innovation at Fraedom