A small business can never really have too much liquidity. Without sufficient cash to hand, the gears of commerce can quickly grind to a halt. A late payment from a major client, an unexpected rise in costs, a supply-chain issue; all of these problems can have knock-on consequences if there isn’t the cash available to keep things moving.
A virtual credit card is a simple means of dealing with this problem, among many others. When there isn’t cash available, credit can be easily called upon and paid back later. But, as we’ll discover, that isn’t the only benefit of a virtual card.
The market for virtual cards has expanded exponentially over the last few years. It works in exactly the same way as a physical card, and confers many of the same benefits. So exactly what are these benefits?
Transparency
Managing expenses is critical if the business is going to prosper. A paper trail makes this task far simpler. Virtual cards allow each employee to be assigned a single unique card, rather than relying on a single shared card. This makes it easy to see who spent what and where. In many cases, the spending can be monitored and tracked using a smartphone.
This makes it easy to spot where there’s room for optimisation. But as well as helping to troubleshoot, this can help incentivise the right kinds of spending. Employees will not be tempted to overspend on non-essential items. If you’re looking to control the amount of money you spend, therefore, a virtual prepaid card is an obvious choice.
Easier Payments
Getting approval for a given payment is easy with the help of virtual cards. A purchase need only be approved by a given manager, who then creates a virtual prepaid card which can be used to make the purchase. Given that a virtual card is functionally the same as a physical one, they’re accepted just about anywhere, including from ATMs.
Security
A virtual prepaid card limits the opportunity for abuse and online fraud. There’s no danger that the card will be lost or stolen. Moreover, the card is unconnected to a bank account. A new card can be created for each new purchase, and once the balance is spent, the card can be effectively destroyed after use.
With a virtual card, you cannot spend more than the designated amount. This makes it impossible for the card to go into debt.
