Reasons Virtual Cards Are Better Than Physical Cards

Jul 2, 2021

Payments made using virtual credit cards in Singapore are becoming increasingly popular. Because of this, availing of virtual cards is an excellent idea if you're a business owner.

There are many advantages to using virtual cards over physical cards, ranging from convenience to better security.

With that said, continue reading on to learn more about virtual cards and why using them are better than physical cards.


What Are Virtual Cards and Their Uses?

Simply put, virtual cards are similar to how debit or credit cards function. However, the main difference lies in the fact that transactions using virtual cards are entirely online.

Nevertheless, these cards also have 16 randomly generated numbers, card verification numbers, and expiration dates.  

Some of the card associations that issue virtual cards are Visa, Mastercard, American Express and UnionPay. Virtual cards are also accepted anywhere credit cards can be used.

Another difference they have from physical cards is in terms of ease of use and operation. Unlike physical cards, you have complete control of virtual cards, so you do not need to depend on your bank for example, to freeze the card should you believe that its security is compromised.

Additionally, you can pick the currency you need, and decide on its spending limit. Because of these, payments are streamlined for both vendors and suppliers. That is why virtual cards can be incredibly beneficial for your business.

Virtual Cards vs. Physical Cards

Even though a physical card can be beneficial, having a virtual credit or debit card in Singapore can make life much easier and provide more security to your personal information. To give you a clearer idea, here are some of the differences between the two.

Virtual Cards

Physical Cards

Credit card numbers are unlimited.

You get one credit card number.

You can set spending limits

Some cards already have pre-set spending limits.

They can be used online (e-commerce sites), or QR codes through mobile phones.

They can be used in person or online.

They cannot be stolen or lost.

They can be stolen or lost.

The Rise of Digitalization in Payments

Because of advancements in technology, virtual payments are quickly on the rise. It is the most dynamic sector in the financial technology industry today.

The potential that digital payments will replace traditional payments is high because over 80% of all transactions are now done online.

In addition, digital payments are faster and offer more security. With digital payment methods, people no longer need to take the risk of bringing cash and physical cards to dangerous places.

Moreover, the increased ownership and usage of mobile money have reduced the expenses of making financial transactions, especially in remittance centers. This is because many remittance centers charge depending on the amount of money sent.

Additionally, the need to travel far to receive government financial assistance, remittance and paying bills has been eliminated. Therefore, people can save more on travel expenses and time. They also don't need to wait long because most digital payments are made in real-time. 

The world is developing continuously, so digital payments have become more significant. They have improved the quality of life in many countries around the world. Governments across the world are now supporting and promoting digital payments to curb the black economy.

In fact, according to the World Bank, better accessibility to financial services has provided incentives for people to save more. It has also motivated them to improve their financial habits.

Moreover, digital payments have created more opportunities for people to have automatic deposits, helpful default options, and schedule text notifications.

All of these have helped eliminate the cognitive barriers for better savings. These behavioral changes brought about by digitalization have become increasingly significant in this fast-paced world.

Nevertheless, there is much more to digital payments than just ensuring the arrival and flow of payments better, having better accessibility, and cheaper alternatives to making payments.

Digital platforms were also developed to have more powerful and compelling programs that gather data from transactions. These can be helpful for many digital payment providers.

Providing a sustainable and competitive alternative to banking needs to go beyond pricing and products. There should be more focus on customer experience, and this is possible with digital platforms.

The advent of digitalization has caused many digital payment operators to become more inspired and creative in their development.

Before, payments were simply used for utility. Nowadays, because of digitalization, payments have become more significant and have been offered to more customers.

In the future, people can expect that both developed and developing countries will follow the trend in digitalization in emerging markets like China.

Moreover, there will be a better understanding of consumers' payment behaviors and include them in the credit decision-making process.

There is no doubt that this will only be another option. However, businesses can be left behind later on if they decide not to get involved in digitalization.

Significant Benefits of Virtual Cards

Empowerment of Employees

One benefit of virtual cards is that many employees who process payments for their companies regularly can be given virtual cards. Therefore, it will be better for companies to issue individual and unique virtual cards to their employees.

This can be done instead of bothering your finance department or manager to provide access to one physical card for payments or spending much time processing physical paper claims.  

Additionally, businesses can set a spending limit on every virtual card so that you can control your spending when making official payments.

Removing payment difficulties can make your business move faster because purchasing equipment and software will no longer undergo any delays.

When done correctly, purchase requests will not pile up for weeks while the employees wait for them to be approved. If they have their virtual cards, they can make purchases more efficiently and companies can still maintain control and authority over the transactions.

Better Accountability

Another benefit of virtual cards is better monitoring and accountability. Because you can assign virtual cards to particular vendors or suppliers, you know where the money was spent.

When you pay using a virtual card, the purchase is automatically recorded in the card management system. All the data is processed and labeled neatly. Because of this, it is virtually impossible to record mysterious payments since everything is organized accordingly.

There is also an excellent opportunity to reduce the number of hours spent on validating your accounting department's cost receipts.

Since every payment is recorded and attributed to the employee who made the purchase, you can easily track and go back to the purchase transaction. Your accounting staff can focus more on what they need to do, which is to predict and provide financial suggestions for your company's future.

Increased Security

One of the best benefits of virtual cards is having a better and higher level of security. Digital payments are perfect for making secure and safe payments online.

Since virtual cards are not physical, they are nearly impossible to clone. This is because there is nothing physical that can be taken away.

Moreover, there is also an option for them to be used once and directly expire after. Therefore, there will be no problems with fraudulent transactions made on your card.

Nevertheless, it is highly recommended to practice the same level of caution when making payments through a virtual card,  even though they offer better security.

Physical and virtual cards are different in many aspects, but they are both tied to real money. Therefore, you still need to take the same security precautions and treat your virtual card as a physical card when making payments.

High-quality virtuals cards are made by reputable card companies such as Mastercard and Visa. They have the same fraud assessment and security similar to other cards included in their network for every payment made.

Hassle-Free to Make and Use

Before, virtual cards could only be availed by large companies. However, because of the advancement of technology, more businesses can now avail of virtual cards.

Virtual card companies can provide virtual cards quickly. You only need to create an account that can be completed online and start making these cards for your business.

Easy Reconciliation

Finding the owner of a transaction to assist with receipt collection or reconciliation is one of the most complex problems many finance departments face. Typically, they need to reach out to many people before understanding what the transaction was for.

When virtual cards are used, they can have cards assigned with a unique expense code to a particular employee or department.

As a result, businesses can reconcile purchases made more quickly to the correct account., They can also determine more easily the people concerned for the receipts for transactions, saving them a lot of time.

Easy Subscription Management

It can be a challenge to manage subscriptions online. Monitoring what you are precisely charged for and when you need to renew or upgrade can be tricky to monitor.

There is also a significant risk of experiencing data breaches with subscriptions. The good news is, virtual cards can address these issues. Managing all subscriptions online can be done with virtual cards.

You can use a new virtual card for each subscription and assign a different card for every vendor. Moreover, you can quickly know where the breach originated. 

Aside from easily tracking all your subscriptions, your card information is protected if it becomes compromised. You can also prevent being overcharged. If you want to cancel, you do not need to update your payment details for each vendor.

Virtual cards offer spending limits, card deletion, recurring payment setup, and card freezes, among many others. Because of these, you can control and change any of your subscriptions.

For example, if you notice a vendor attempting to make additional charges, you can just delete the card. You do not have to go through the cancellation process.

Conclusion

Finally, you understand what virtual cards are all about and why you should consider them over physical cards. Utilizing virtual payments for your business can make your financial flow more efficient.

Their benefits go beyond making payments more convenient. Virtual credit cards in Singapore can offer you numerous advantages – from better security to improved efficiency.

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