If you’re used to sharing your business credit card number with employees and deal with the hassle of tracking down receipts, you may wonder if there’s a better solution.
If you’ve ever had to update your credit card number with a long list of merchants because the number was lost or stolen, or exposed in a data breach, you may wish there was an easier way to keep your account information safe.
If you have had an employee go rogue and make unauthorized purchases on a business credit card, you may want to limit the number of employee cards you issue.
In all of these examples, virtual credit card numbers may be a helpful tool that allow your small business to save valuable time while still empowering your employees with the ability to make essential purchases.
What Is A Virtual Credit Card?
A virtual credit card is a single-use credit card number that looks and works like a regular credit card number, but it won’t ever appear on a physical card. Instead it is generated online (through an app or website) so it can be used mainly for online or phone purchases. Typically it will have a a unique expiration date and CVV code, and you may be able to limit its use to one merchant or set a specific spending limit.
Ultimately, the main benefit is that you can make purchases without revealing your actual credit card number, and you can often set up greater controls for these numbers.
How To Use Virtual Credit Cards In Your Small Business
A small business is an ideal place for virtual credit cards. They allow you to create multiple credit card numbers that can be used by employees for specific purchases, or to pay for online subscriptions for SaaS products, for example.
While many small businesses are familiar with employee cards, virtual card numbers provide even greater control over spending. That’s because each card number can be tied to a specific merchant or can offer a customized credit limit.
Let’s say your employee wants to try out a new service that offers a free trial. You can use a virtual card number, and if you don’t want to continue the service, simply turn it off.
Or let’s say your office manager wants to buy lunch for the office, you can create a virtual card number for that one-time purchase with a specific limit.
Another scenario: let’s say you hire a contractor who needs pay for an online tool to complete a task. You can easily create a virtual card number for that purpose.
While you won’t get individual statements for each virtual card number, you may get tools that help you monitor spending with different cards.
How Safe Are Virtual Credit Card Numbers?
Virtual credit cards are generally extremely safe. Because a number is tied to a specific merchant or has a small credit limit, it will unlikely be of much use to a hacker who gets a hold of it. That doesn’t mean no damage can be done, but it’s certainly less likely.
However, it’s worth it to keep in mind that credit cards in general are the safest payment method.
If your virtual credit card is tied to a credit card account, any fraudulent activity will fall under the generous federal protections that apply in the case of fraudulent use. When it comes to credit card fraud, generally cardholders aren’t responsible for more than $50 in fraudulent activity on a credit card, and most issuers offer zero liability which brings your out-of-pocket cost to $0.
It’s important to understand, though, that any time you give a credit card to an employee, you authorize use of that card regardless of the specific charges they make. If they use it to buy something for personal use, that will be an issue between you and the employee.
If you use a virtual card number tied to a bank account or debit card, though, different rules apply as those types of purchases aren’t covered by the same federal law that limits liability for fraudulent credit card use. Still, virtual card numbers can add another layer of protection for debit card purchases.
In this scenario, it’s important to monitor that activity and contact your financial institution immediately if your bank account or debit card is compromised through the use of a virtual credit card number. It’s also a good idea to review the terms and conditions to understand their policy if the underlying account is accessed this way.
How To Get Virtual Credit Cards
The fastest and easiest way to get a virtual credit card number is through one of the credit cards you already have. If the issuer offers them, find out how to generate new virtual credit card numbers. Typically, this will be through a mobile app or by logging into your online account.
If your card issuer does not yet offer virtual credit card numbers, consider getting a new credit card from an issuer that does.
There’s another twist here. Many issuers allow cardholders to add credit cards to digital wallets like Apple Pay, Google Pay or PayPal, for example. They may describe this as a virtual credit card, and technically they do create a token that hides the card number is hidden from the merchant, but it’s not the same as virtual card numbers you can create with specific parameters.
Another option is a third-party service provider like Privacy.com. However, there may be an additional cost for using third-party services and, in the case of Privacy.com, it is linked to a debit card or bank account rather than a credit card.
Pros And Cons Of Using Virtual Credit Card Numbers
Of course there are both benefits and downsides to virtual credit cards. Generally speaking, they can be convenient, especially in a business setting where you need to allow multiple employees to make purchases.
- Great for managing recurring payments
- Can help limit employee spending
- Can be useful for contractor purchases
- Not available on all business credit cards
- Typically not useful for in-person transactions
- Crediting the account for returns isn’t always possible
Best Virtual Credit Cards On The Market Today
Virtual credit card numbers are a feature of a card for which they are offered so you typically shop for the card first. In other words, if you want this feature, you’ll need to apply for a credit card that meets your needs that also offers virtual credit card numbers.
When it comes to major credit card issuers, digital wallets are much more popular than virtual credit card numbers. However, virtual card numbers are commonly offered on corporate cards such as Airbase, dash.fi, Divvy, and Brex.
BILL Divvy Corporate Card
Small business owners looking for virtual credit card numbers may want to check out Divvy.
Divvy offers unlimited virtual card numbers along with its robust expense management tools. In addition, the Divvy Chrome extension makes it easy to create virtual card numbers.
Ramp is an expense management system powered with a corporate credit card. It offers unlimited virtual cards. Automate expense reports with real-time reporting. There is no personal credit check or founder guarantee.
Your business must be an LLC, Corporation or LP, provide an EIN, and have at least $75,000 in a linked bank account.
FAQs For Virtual Credit Cards
Is there an additional credit inquiry to qualify for a virtual credit card number?
Once you are approved for a credit card, you should not expect additional credit checks simply because you create a new virtual credit card number. Some issuers do periodically review credit reports for cardholders, but those reviews should create a soft inquiry that does not impact credit scores.
Does BofA offer virtual credit card numbers?
While Bank of America allows you to add your Bank of America credit or debit card to your digital wallet, it does not offer the ability to create virtual credit card numbers.
Does Wells Fargo offer virtual credit card numbers?
Wells Fargo allows you to add eligible cards to your digital wallet. It also announced in 2020 that it was offering commercial customers the WellsOne® Virtual Card Payments service to allow them to create one-time virtual card numbers to digitally pay invoices. However, its current website does not have any information about this service.
Does Chase offer virtual credit card numbers?Header
Chase does not offer virtual credit card numbers specifically. It offers Click to Pay on many of its consumer credit cards (but not business credit cards) by adding the card to your digital wallet.
Does Capital One offer virtual credit card numbers?
Yes, Capital One offers Eno, a virtual shopping assistant. You download the ENO browser extension, register your Capital One card, then you’ll be able to create a virtual account number to pay for online purchases without sharing credit card information from your physical credit card. Eno automatically saves virtual card numbers for each merchant so they can be used again and you can manage those numbers from your online dashboard.
Does American Express offer virtual credit card numbers?
For American Express Corporate Cards (not small business cards), Amex offers the ability to create virtual cards and send them to employees via the Amex GoTM mobile app. They can be created for immediate use or added to a mobile wallet to be used as needed.
In addition, eligible American Express Card Members can get an instant card number if they are approved for an American Express card. This allows them to start shopping even before the card arrives in the mail.
Does Citi offer virtual credit card numbers?
Select Citi cards may be eligible to create virtual card numbers to use when shopping online (or by mail order). If your card is eligible you can use a randomly generated Citi card Virtual Account Number instead of your real account number.
Does Discover offer virtual credit card numbers?Header
No, Discover no longer offers virtual card numbers.