Virtual Cards for Your Business – How They’re Beneficial For Security
The last couple of years have been revolutionary for the financial industry, with many new innovations hitting the market. One of the most game-changing ones have been virtual cards for businesses. Namely, virtual cards offer a variety of benefits, including improved control over finances, easy expense management, as well as reduced “shadow spending”.
In addition to these benefits, virtual cards also offer a variety of benefits in terms of security. However, before we dive into them, let’s first understand what virtual cards are and how they work. Read to find out.
What Are Virtual Cards?
Virtual cards are essentially credit or debit cards that are issued virtually, i.e., without a physical form. A virtual card is a one-off token that is directly tied to the account from which it was issued. This means that if you have an account with a bank, then you can easily create a virtual card for yourself, without having to get a physical plastic card for the bank account in question.
How Do Virtual Cards Work?
Virtual cards work similarly to physical cards, except that they have no physical form. Just like a physical debit card, the virtual card has its own card number, name on the card, as well as CVC code. Once the holder has this information, the card can be used for making payments on websites or apps, as well as for recurring payments like subscriptions and memberships. When a purchase is made with a virtual card, the funds are deducted from the linked account immediately and the holder of the card is notified.
Of course, virtual cards are not limited to online payments only. Thanks to modern NFC technology, software solutions like Apple Pay and Google Pay have appeared, allowing holders of virtual cards to effectively pay at POS terminals as if they had a physical card.
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Security Benefits of Using Virtual Cards
Now, let’s get to the point of this article – security benefits. Virtual cards offer several advantages in terms of security when compared with traditional payment methods. Let’s go over them:
Reduced Fraud and Theft Risk
The biggest benefit of using virtual cards is the significantly reduced chances of fraud and theft. Since all transactions are tied to the user’s account, it makes it almost impossible for someone else to gain access and use the card without authorization. Moreover, since virtual cards can be used only once and then automatically disabled, the risk of identity theft is significantly reduced.
Increased Visibility and Transparency
With virtual cards, businesses gain an unprecedented level of control over their finances. This allows them to easily track expenses and make sure that employees are not misusing funds. Furthermore, since it’s possible to set limits and restrictions on spending, companies can rest assured that they are always in control of their finances.
Improved Security Through Multi-Factor Authentication
The majority of virtual cards offer an additional layer of security through multi-factor authentication (MFA). This is essentially a combination of two or more methods used to verify the identity of the cardholder, such as a PIN code, biometric data, or even an SMS code. By requiring multiple authentication methods, businesses can be sure that only genuine holders of the card can access and use it.
Enhanced Data Security
Another major benefit of using virtual cards is enhanced data security. As these cards are not physically stored, sensitive information related to the cardholder and their account remains safe and secure. This means that businesses do not have to worry about storing card details in potentially vulnerable databases.
Easier Payment Management
In addition to the improved security, virtual cards also offer a much easier way to manage payments. This is especially beneficial for businesses with large numbers of employees who need access to funds while traveling or working remotely. With virtual cards, companies can easily generate one-off cards for their employees and control the spending limits or expiration date of each card. This will help them save time and money by avoiding unnecessary paperwork, complicated authorization procedures, and lengthy wait times.
All in all, we believe that virtual cards are a great tool for businesses looking to improve their security. With the ability to control spending limits, set expiration dates, and require multi-factor authentication, virtual cards provide an extra layer of security that is hard to match with physical cards. Furthermore, since they do not store sensitive data locally, companies can rest assured that their finances remain safe and secure.
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