Virtual Cards: Everything You Need to Know

In the Global Virtual Cards Market 2023-2028, Juniper Research stated three main findings:

Driving this growth is the dominance of B2B virtual cards, surpassing consumer spending, as businesses embrace the flexibility and security these digital payment methods offer.

But what exactly are virtual cards, and why should you consider them?

What Is A Virtual Card?

Imagine your physical credit card condensing into a unique 16-digit number–that’s essentially what a virtual card is. But unlike its plastic counterpart, it boasts enhanced security. Each transaction generates a new, unique card number, usable with a single merchant, a specific spending limit, and an expiration date.

Why Should You Get A Virtual Card?

Reduced fraud: Multiple card numbers minimize exposure and limit damage from data breaches.
Enhanced privacy: Protect banking information and curb data tracking by advertisers.
Streamlined cash flow: Manage expenses and control vendor payments effortlessly.
Empowered employees: Safely extend spending power to employees with controlled virtual cards.

How To Use A Virtual Card?

Virtual cards are linked to an existing credit card account. The card numbers are generated randomly to ensure your bank account details aren’t shared online. These numbers would appear as any other credit card number for a merchant.

Depending on your card issuer, you may be able to request a virtual card online through your credit card account. Once a virtual card has been generated, cardholders can access these immediately and set spending limits and validity periods, among other customizations.

When Should You Use A Virtual Card?

While virtual cards offer immense flexibility, here are some situations where they truly shine:

Online Shopping: You can protect your real card information from potential data breaches at online stores.
Recurring Payments: Use virtual cards for subscriptions or memberships you might cancel later, preventing unauthorized charges.
International Travel: Minimize currency conversion fees and enjoy wider acceptance compared to some debit cards.
Business Expenses: Simplify expense management and employee spending with virtual cards tailored to specific needs.

Benefits Of Virtual Cards

Better Security

A virtual card ensures your real account number stays hidden when you shop online, keeping you more secure than using a physical card.

Let’s take an example.

If a data breach causes your main account number to be exposed, you’d have to get your main credit card reissued. This also means that you’ll get a new account number and need to manually update every vendor with whom you’ve set up recurring payments for the card number that was exposed. You’d also need to wait till you receive the physical card by mail.

Now, if you’d used a virtual card instead, you could’ve just closed the unique credit card number that was associated with the affected vendor and kept your main credit card account open. This ensures your main account is not exposed to a data breach and ensures you don’t have to track and update your recurring payments with vendors.

How Much Fraud Are You Liable For When Using A Credit Card?

The Fair Credit Billing Act (FCBA) limits your liability for unauthorized spending on a credit card to just $50.

This act provides protection from unfair billing practices like:

Unauthorized Charges: Money taken from your account without your permission.
Inaccurate Details: Charges with incorrect dates, amounts, or merchant information.
Undelivered Purchases: Charges for goods or services never received.
Misrepresented Products: Charges for products or services that differ significantly from their description.
Billing Errors: Incorrect calculations or unexpected charges appearing on your statement.
Unclear Transactions: Charges requiring explanation or confirmation due to lack of understanding.
Misdirected Statements: Billing statements sent to the wrong address, preventing timely review.

Rules consumers must remember:

Deadline to Dispute: You have 60 days from receiving your bill to challenge a charge with the card issuer.
Minimum Amount: Only charges over $50 can be formally disputed.
Written Requirement: Most disputes require written complaints.
Stolen Card Exception: For lost or stolen cards, phone disputes are allowed.
Dispute Assistance: Your card issuer can help resolve merchant disputes and temporarily withhold payment.
Limited Liability: You're only liable for up to $50 on unauthorized charges.
Authorized User Misuse: Charges by authorized users without your permission are your responsibility.
Challenging the Outcome: You have 10 days to contest the issuer's decision on your dispute.

Pro-tip: To ensure you aren’t responsible for any unauthorized charges, ensure you notify your credit card company immediately if your card has been lost or stolen. That way, your liability is reduced to zero before any unauthorized charges are made.

Additionally, if your credit card number and not the physical card have been stolen, you aren’t liable for unauthorized use.

Better Budgeting

A virtual card can help you set spending limits with any merchant. Depending on your card issuer, you can set up a virtual account number with the spending limit you need. Once the card has reached its limit, it won’t be able to make any more charges with the associated account number.

Better Flexibility

You decide the time limit for your cards, post which they expire. This can be useful if you want to use a card only for a specific period of time.

How To Get A Virtual Card?

With most credit card issuers, virtual cards are available for any credit card they have; all you need to do is initiate them on your account.

It’s possible that virtual card numbers are already available for your existing credit cards and any new cards you want to get. Log in to your online baking account to see how you can access a virtual credit card number for your card.

Why Should You Get An Amex Virtual Card?

Each virtual card provider may have their own unique strengths, such as specific features tailored to business needs or wider international acceptance. However, for Amex cardholders who prioritize merchant compatibility, integrated rewards, dynamic security, and convenient mobile management, Amex virtual cards could be a compelling choice. Here’s why:

1. Broader Merchant Acceptance

Amex has a wider network of accepting merchants compared to many standalone virtual card providers in the U.S. This means you'll have greater flexibility to use your Amex virtual card for various purchases.

In fact, according to the 2022 Nilson Report, Amex is accepted at 99% of places in the U.S. that accept credit card payments.

2. Integration with Amex Rewards

If you're already an Amex cardholder, virtual cards seamlessly integrate with your existing rewards program, allowing you to earn points on all your virtual card transactions. This can be a significant advantage for frequent Amex users.

3. Dynamic Security Codes

Amex virtual cards generate dynamic One-Time security codes with each transaction for you to confirm your identity. This reduces the risk of unauthorized charges if your card information is compromised.

4. Enhanced Card Management

The Amex mobile app offers robust features for managing your virtual cards, including setting spending limits, tracking transactions, and creating new cards easily.

But that’s not all…

You can now generate virtual cards on demand directly linked to your existing Amex credit line! But how?

Fyle: Your Amex Superpower For Smarter Spending

Are you juggling too many physical cards and chasing employees for receipts? You can ditch the hassle with Fyle’s direct integration with American Express Business Cards. You can connect your Amex cards to Fyle to instantly collect and match receipts, track spend, and automatically code expenses according to your GL without depending on bank feeds. Here's how it fuels your business:

Fyle also integrates with Visa and Mastercard credit cards for instant notifications on credit card spend, collecting receipts via text message, and automated reconciliations. Click here to learn more.

Unlimited Cards For Your Employees

You can set spending limits and choose custom validity periods for each card, which ensures that you never overshoot your budget or even leave any room for misuse. All linked to your existing Amex credit line.

Receipt Chase? Never Again!

Employees can text their receipts to Fyle for all their card expenses. Fyle will instantly check if there’s a matching card expense and automatically match. This enables your accountants to collect receipts 5x faster without chasing employees for receipts.

Reconciliation? Instant!

Fyle auto-matches card expenses to receipts as soon as your employee sends them, ensuring your books are updated in real time.

Expense Tracking Made Easy

Fyle’s intuitive dashboards let you monitor employee spending like a pro–spot trends, make better decisions, and ensure your budgets are adhered to.

Fraud? Not On Your Watch!

Instant spend alerts and single-use virtual cards ensure fraudsters are kept at bay. Sleep soundly, knowing that your finances are protected.

In Conclusion

Virtual cards aren't just a passing trend; they're a revolution in security and budgeting. Shield your real card number, streamline expenses, and empower employees – all with a tap or click.

Ready to join the virtual card movement? Major issuers like American Express, Citi, and Capital One offer them. And if you're an Amex Business Card holder, Fyle unlocks even more potential.

Manage expenses, automate tasks, and gain real-time insights –all from one platform. Ditch the plastic, embrace the security, and see how Fyle supercharges your Amex Cards.