Technology is developing at such speed that digitalisation is fast-becoming the next phase in the evolution of the corporate card sector. Virtual payments involve the creation of a single use virtual account number assigned to each transaction and provided to the supplier.
Users are also able to set a specific pre-authorisation payment amount, date range and transaction details to help control spend and facilitate reconciliation processes. These virtual cards can not only be used in the area of T&E but in fact can also be widely used for general business purchases.
Companies that are best able to utilise digital platforms in finance and procurement are increasingly likely to gain an advantage over their less technologically advanced competitors, such as in the form of efficiencies and savings.
As such, demand for virtual payments is only set to increase, offering businesses a secure and efficient way to pay for goods and services. So, looking deeper, why could virtual payments be invaluable to your business?
Among our customers, we’re increasingly seeing companies put greater emphasis on getting the most value from their spending, as they ensure compliance to their purchasing policies.
Through virtual payments, companies can closely control spend which helps protect against out of policy spending – for example they can set and maintain spending limited by transaction or by month.
This level of visibility also means that companies can work with payment providers to help them draw out strategic insights from their spend data, which can help ensure greater adherence to policies and ultimately deliver savings.
We’re seeing growing demand for analytic tools that enable companies to better monitor and manage policy compliance within their organisation, across commodities, such as lodging.
For example, the American Express Coverage and Compliance tool is a new instrument that gives customers greater visibility over non-compliance to their policies, helping them identify how they can best take action to prevent out-of policy spend and ensure greater cost control.
We all know that in business, time is money. And much of the latest innovation in payments technology has been designed with speed front and centre – to ease the administrative burden of handling supplier payments and managing expenses while offering greater oversight of outgoing costs.
Consider that handling payments online eliminates the risk of valuable documents – such as paper, receipts and cash – being lost. This helps minimise the risk of human error and the chance of sensitive details falling into the wrong hands, as well as reducing the pressure on employees handling these documents.
Increasing numbers of our partners are appreciating the benefits of adopting a streamlined digital process over the risks of storing thousands of pieces of paper and we’ve seen ambitious plans across the sector for the adoption of virtual payments.
American Express’s 2018 Global Business and Spending Outlook, found that for the 100 senior finance executives surveyed, protection against data breaches was the single most important IT-spending priority over the coming year.
And according to a recent PwC study, nearly a quarter of fraud occurring in the UK over the past two years resulted in a loss of over $1m (£700,000).
The impact of fraud on smaller businesses in particular, can be devastating. So, it’s important to implement measures to mitigate risk, now.
Virtual payment cards have a significant benefit when it comes tackling fraud. Virtual card numbers are randomly created for a one-off transaction, meaning they can’t be traced back to a physical credit card, or to bank account information.
With freelance and flexible work on the rise, employers need to adapt their businesses to meet the needs of the modern workforce. Virtual corporate cards create greater efficiency, ease and trust between employee and employer, eliminating ambiguity over spend limits and enabling employees to manage expenses remotely.
For businesses with a high proportion of contractors or employees on fixed term contracts, who wouldn’t typically be given a regular, plastic corporate card, virtual corporate cards are a brilliant way to handle expenses as they can be assigned on a temporary basis. Account administrators can also set timeframes for use of digital cards, so they only function for specified periods.
Smoothing business travel
According to research commissioned by American Express last year, 71% of professionals who travel abroad for work say that travel makes their job more interesting. And, with UK business travellers undertaking an average of 11 trips a year, virtual corporate cards can significantly smooth the experience for employees doing business overseas.
For employees, digitalising travel bookings, payments and expense reclaims can take the headache out of the admin aspect of business travel – as well as eliminating any grey areas around spend compliance.
For administrators, virtual payments tools such as American Express’ Business Travel Account (BTA) enable businesses to manage corporate travel expenses through one centralised account, giving them greater control, compliance and visibility of travel expenses.
And on a practical note – if a plastic card is lost or stolen while abroad it can result in inconvenience and wasted time, whereas a virtual card can be sent directly to a mobile phone.
In a fast-paced business environment, efficiency is king – but businesses can’t afford to compromise on security and reliability. Virtual cards offer the best of both worlds, streamlining the payment and reconciliation process whilst driving efficiency and boosting the employee experience.