Virtual Commercial Cards

Credit cards—they aren’t just for consumers. Businesses have been using commercial credit cards for a long time, particularly as a way to manage employee spending. Commercial cards are also increasingly being seen as a valid option for business-to-business payments, which creates the potential for card-not-present fraud to occur.

With many merchants seeking to streamline and automate their accounts payable processes with card payments, virtual card technology could provide a security solution that allows these transactions to be carried out in a greater degree of safety. How can virtual commercial cards help merchants reduce their exposure to fraud?

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Commercial credit cards have always been a convenient way to take care of business expenses and provide employees with a way to cover their travel costs and business-related purchases. In an increasingly fast-paced and paperless business world, commercial cards are seeing higher rates of use for making vendor payments and other B2B transactions more traditionally paid with paper checks.

There are several advantages in using commercial cards for these types of payments. Some merchants may find it helpful to have credit available for vendor payments when cash flow is limited. Others may have an easier time using card payments in an automated system in which accounts payable and accounts receivable are integrated, as opposed to paper checks or ACH payments.

The big drawback of using commercial cards for B2B payments is that these transactions usually have to be carried out remotely, over the internet—which means there’s a chance that cybercriminals could steal or intercept the card data.

While some commercial cards meant for employee expenditures may have restrictions placed on them, many corporate cards have very high limits. Any merchant who has dealt with true fraud chargebacks can easily imagine the financial damage a fraudster with a working commercial card could potentially cause.

One way to keep online commercial card payments safer from eavesdroppers and data breaches is to use a virtual commercial card.

What are Virtual Commercial Cards?

A virtual commercial card is a unique card number, linked to an existing commercial card account, which can be used online without exposing the actual card account number. Virtual cards can be single-use (for the greatest amount of security), but multi-use virtual cards can also exist. It may also be possible to apply special credit limits and other spending restrictions to virtual commercial cards.

It’s up to individual issuing banks to decide whether or not to offer virtual cards as part of their commercial card program, and what features to include.

As an example, a merchant might request a multi-use virtual card to use for making payments to one specific vendor. They might later request a one-time use virtual card to make a payment to an overseas vendor with whom they have no prior relationship. If an employee needed to purchase business materials online, they could request a virtual card with a specific spending limit and restrict the card’s use to a predetermined list of suppliers.

How Can Virtual Commercial Cards Prevent Fraud?

Manage Chargeback In-House Or OutshoreVirtual commercial cards protect their holders from fraud by ensuring that the primary account number never has to get transmitted over unsecure networks or stored on third-party servers.

When the virtual card number is specified for one-time use, the result is essentially a tokenized payment in which the card number used for the transaction cannot be used by fraudsters and cannot be connected back to the true account credentials.

Even multi-use virtual cards are safer than actual cards, as they are usually issued with additional restrictions or spending limits in place—but nothing offers more protection from fraud than a single-use virtual card.

It’s not uncommon for issuing banks to require virtual cards to expire after a relatively short timeframe. This can minimize fraud on multi-use virtual cards by greatly limiting the amount of time in which they can be used.

Virtual card numbers can also make it easier to identify and avoid internal acts of fraud. In an ideal world, merchants would always be able to trust their vendors and suppliers, but sometimes circumstances compel merchants to transact with businesses that may seem a bit sketchy. Virtual cards allow merchants to make these transactions without having to worry about who has access to their commercial card number or banking information.

Moreover, when multi-use virtual cards are assigned to specific vendor accounts, any fraud that later shows up on that virtual card may strongly indicate security issues with that particular vendor—like a data breach or a rogue employee—and merchants can take immediate steps to shut down that virtual card and notify the vendor.

A very effective way to minimize the risk of fraud is for merchants to be proactive about seeking out virtual cards that offer a great deal of spending controls and use them to create purpose-specific virtual commercial cards that would be near-impossible to use for anything but their intended function.


Fraud is a pervasive and costly problem for any business that operates online, and when merchants use commercial cards, they have to worry about fighting fraud on two fronts: fraudulent transactions from fraudsters posing as customers, and the potential theft and misuse of their own cards.

Of course, the same chargeback rights that protect consumers apply to merchants in their capacity as cardholders themselves, but it’s always preferable to avoid fraud entirely rather than see it turn into a chargeback.

In general, virtual card technology is a good thing for merchants. When ecommerce customers use virtual cards, they’re protecting their accounts from malware, hackers, and other high-tech fraud attacks, which means fewer true fraud chargebacks for the merchants they shop with. With that in mind, it can make sense for merchants to lead by example and use virtual cards for their own commercial transactions.

Making card payments to vendors might not be right for every merchant—some vendors may insist on being paid by check, after all—but for merchants who have the opportunity to use card payments in an account payable context but have concerns about their exposure to fraud, virtual commercial cards offer a viable solution that provides real protection.

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