‘Virtual’ cards find greater following with real-world banks

As the concept of “virtual card payment” becomes more well-established with the growing use of these online-only payments, industry experts as well as bad actors see where these digital-only transaction methods present new obstacles.

Silicon Valley Bank, one of the country’s largest and most cutting-edge financial institutions, launched a new virtual card offering via the Emburse platform. With $163 billion in assets, Silicon Valley Bank (SVB) is the first U.S. bank partner to link a deal with the virtual card-issuing partner. So-called “virtual cards” respond to the market’s growing demand for a more digitally focused and integrated card option, offering cardholders greater control and reconciliation.

Being reconciled to their homes, financial service institution (FSI) customers (including business customers) have made more usage of online banking, bill-payment, commerce and investing, linking their 16-digit payment card number to transactions where possible.

“Partnering with Emburse allows us to offer our large number of mutual clients a seamless and easy experience for effectively managing and controlling card issuance and spend,” said Jon Oakes, managing director of card products at Silicon Valley Bank, in a prepared release. “Removing barriers traditionally associated with corporate cards means our clients can more easily use virtual cards and channel spend through them.”

“Whether it’s less time with month-end reconciliations, or less spend leakage or larger cashback rebates, we’re excited about the many ways that our high-growth technology and life science clients will benefit from this new integration,” Oakes continues.

Tighter controls for virtual cards

Virtual payment cards have been around for well over a decade.

“Many finance teams are uncomfortable issuing cards with open lines of credit and would rather issue dynamic cards with controls specific for the users that are going to be spending on them,” says Omar Qari, head of corporate strategy and business development at Emburse. “With SVB’s virtual cards and Emburse’s workflows, we can avoid cards being only issued to managers. Cards can be requested directly by employees, with spend and category limits specific to each request.”

According to experts, virtual card fraud can be avoided simply by limiting the personal information shared at the point of the transaction. Additionally, virtual payment “cards” typically limit spending to a specific amount — creating a more distinctive spend for legitimate customers on a budget.

Virtual debit and credit cards promise improved real-time authentication, policy controls and automated reconciliation, including straight-through processing to enterprise resource planning (ERP) systems for card transactions with all the appropriate controls and classifications, and actionable insights, where regular financial is gathered together to create specific decision-based reports.

“There’s a major shift underway in corporate spend. Different types of spend — whether a travel and entertainment invoice, or long-tail recurring spend, such as subscriptions — are all blending together,” said Eric Friedrichsen, CEO at Emburse said in a statement.

“As a result, customers demand even more tightly integrated solutions for making and managing payments — and will switch providers to get them. Financial institutions have an urgent need to respond to this requirement and we’re providing an accelerated on-ramp so they can win more customers, reduce client attrition and drive incremental card spend,” he added.