Virtual cards for business travel provide benefits for both Travelers and finance team members working on expenses and overall spend management.
Virtual cards are nothing new. They’ve been around for years, but they may finally be gaining the spotlight from traditional corporate cards at a time when more and more corporate employees are working across wide geographic areas. Virtual cards for business travel are also gaining in popularity as more banks are offering virtual cards with advanced capabilities. And more travel vendors are accepting virtual cards.
The benefits are widespread, both for Travelers and for the finance teams and back office employees who work on expenses. And employees who concern themselves with travel spend management. Here’s more on how virtual cards work — and the pros and cons of implementing them within your travel program.
How Do Virtual Cards Work
Virtual cards in practice work just like the name would suggest. Rather than using a real-life card that you carry in your wallet. Employees use a card number and expiration date that exist virtually. That is, there’s no real-life card that includes the number and expiration date.
Companies typically create virtual cards for specific amounts to be spent within specific time periods. Institutions providing credit cards have continually innovated to create advanced virtual card products that make them easier to use now than ever before.
Most card providers allow users to request and retrieve them from mobile apps. Once virtual cards have been created, users add them to mobile wallets so they can start making payments.
For example, Citi offers a single app that can be used to request and retrieve virtual cards in 66 different currencies.
The Pros of Virtual Cards for Business Travel Spend Management
Virtual cards deliver benefits both to Travelers and finance teams that work on expenses and spend management.
For business Travelers, the expense process becomes much more streamlined when virtual cards are involved. Because Travelers are requesting and retrieving virtual cards for specific amounts and purposes. That information is captured on the back end, which makes generating expense reports easier than ever before.
Also, the use of virtual cards for business travel does away with the use of personal cards (followed by a reimbursement). This is the approach that many small businesses have relied on for decades. But it makes life harder for both Travelers and finance teams.
For finance teams, the use of personal cards and even traditional corporate cards can make closing the books a time-consuming and onerous process. The use of corporate cards and personal cards also make it more difficult for finance teams to identify and analyze spending patterns, which is essential to effective spend management.
When virtual cards are used, finance teams spend less time on closing the books and more time analyzing spend data in search of savings and efficiencies.
Finally, virtual cards create a higher level of security for transactions. Because cards exist virtually, and because cards are created for specific amounts and certain periods of time. There are fewer security risks.
The Cons of Virtual Cards for Business Travel Spend Management
The single con related to the use of virtual cards is adoption. While most travel vendors are now accepting payments from the mobile wallets where virtual cards are kept for use, not all of them are. This may be especially true when Travelers visit less developed countries where technology is limited.
Because virtual cards aren’t accepted by 100% of travel vendors. Travelers must still use personal cards or corporate cards in some cases. In the future, Travelers may be able to hit the road with confidence that they only need a virtual card. But that’s not always the case right now.
Connect With the Travel Technologies Your Business Needs
The key to implementing virtual cards for business travel and finding success with them is having the right travel technologies in place. At JTB Business Travel, we help our clients evaluate the technology landscape and choose the tools that they need to reach their goals. Those goals include streamlining the experience for Travelers while also minimizing travel spend to the greatest extent possible.
Get in touch to learn more about what JTB Business Travel can provide as your travel management company.