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Man Clicking on Virtua; Card

Advances in virtual card technology just turned your accounts payable (AP) into a profit center.  Payment by ACH and checks can be expensive and labor-intensive.  But, what if you could increase efficiency and security while turning your AP into a profit center?  Now you can.

Many card issuers are now offering Virtual Card programs which give you cash back annually on each dollar of AP you spend.  For example, if you spend $10 million per year in accounts payable, then you could receive up to $150,000 back on those transactions.  Most virtual cards now offer between 100 and 150 basis points back annually on each dollar spent on AP.  Some of the best virtual cards offer this feature.

Virtual cards offer a unique security feature as well.  The card number actually changes on each transaction and each number is only good for the specific transaction amount.  This increases security while reducing overcharges or inaccuracies.  The transaction cannot be processed without the amount exactly matching the “virtual number” assigned to that transaction.

Another benefit to using Virtual Cards is efficiency.  The transactions move faster than ACH and are less expensive, not to mention that ACH programs do not give you cash back. 

However, one barrier to entry for some companies looking to switch to virtual cards is the time required to sign up each vendor to the program.  Utilization by your suppliers is critical to the success of the program.  If only 20% of your suppliers agree to use the virtual card, then your rebate will be significantly lower.  So, as you look for a partner to provide a virtual card service, be sure an ask about their success rate of signing up vendors.  The quality and efficiency of this part of the program can be the difference between success and failure.

As more players enter this field, the rebate schedules are getting more aggressive.  Companies with a higher AP spend will find themselves at the top tier as high as 150 basis points.   

Could your organization use an additional profit boost along with a simplified AP program?  If yes, then it’s time to investigate virtual card programs and turn your AP department into a revenue generator.

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