How to choose the best virtual card provider: 3 essential tips

The future of digital payments is here, and that future is virtual cards. One study found that virtual card transactions globally are expected to increase from $1.9 trillion in 2021 to $6.8 trillion in 2026. 

That increase means that there are even more virtual card providers to choose from if you’re looking to either adopt or enhance your virtual payment capabilities to meet this increasing demand. Let’s examine the current virtual card landscape to give you three characteristics you should look for when evaluating virtual card providers. 

The present and future of virtual cards

Virtual cards experienced a surge in popularity at the start of the COVID-19 pandemic, as businesses were faced with the need to do business in a more virtual environment. The innovation that drove this transition is here to stay, with 55% of chief financial officers (CFOs) saying they are using ePayables with virtual cards more frequently due to digitization. 

Certain industries are seeing higher rates of adoption. For example, PYMNTS.com data shows that the hospitality industry experienced a 300% increase in electronic B2B payments between January 2020 and May 2021, as virtual cards and ACH transfers became increasingly popular. 

Why they’re growing in popularity

There are a few key reasons why virtual cards are here to stay: 

• Save time. Did you know that half of workers whose companies lack enough digitization say they spend at least two to three hours per day on inefficient processes? Virtual cards can remove many of the manual processes that exist with other forms of payment. 
• Save money. WEX has found that the average business leader estimates an annual loss of $1.176 million due to flawed payment and billing systems. Virtual cards can help streamline payment operations. 
• Reduce fraud. Virtual cards are subject to fraud at a rate that is far less than other common payment methods, such as checks, physical cards, and ACH. For example, in 2022, the percentage of organizations that had experienced some sort of fraud activity via check was seven times higher than that of organizations that had experienced fraud via virtual cards. 
• Greater transparency. With automation and technology powering the payments, it’s much easier for accounts payable teams and payment directors to learn more about payment statuses and perform record-keeping duties.
• Open up new revenue opportunities. While cutting costs is huge, virtual card payments can generate revenue in the form of rebates. The percentage you make with each payment via interchange gives virtual cards another edge over other forms of payment. 

3 traits to look for from your virtual card provider

There are a lot of virtual card providers to choose from. Here are three characteristics you should look for when evaluating virtual card providers: 

Unique pricing

Many virtual card providers have standard pricing. You might even find that pricing on their website. But does that mean you’re getting the best deal? No two businesses are alike, so providers must customize pricing based on each company’s unique needs and value they’re bringing. For example, at WEX, we offer pricing on each account based on a company’s accounts payable (AP) spend, repayment terms to WEX, supplier evaluation, and more. 

Monthly incentives

Speed of transaction is vitally important, especially for companies that have limited cash flow or deep lines of credit to lean on. When evaluating virtual card providers, take into consideration how often they pay incentives. Many providers pay annually or quarterly. At WEX, we don’t believe in holding your incentive as it’s paid monthly with full transparency into how it is calculated. 

Powerful card relationships

When working with any type of card, payment acceptance is key. Make sure to choose a virtual card provider who is enabling your providers for acceptance and not pushing that back on you or not doing it all.

For more insights and updates on corporate payments, check out:

• Your guide to virtual card rebates
• 2025 payment trends
• Is the secret to better cash flow management AI?

Learn more about how WEX payment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.

Stay up to date on the latest in business payments by subscribing to our blog! Simply hit the “Subscribe” button above or submit your email address in the form below.

The information in this blog post is for educational purposes only. It is not legal, tax or investment advice. For legal, tax or investment advice, you should consult your own legal counsel, tax, and investment advisers.

Editorial note: This article was originally published on December 18, 2023, and has been updated for this publication.

Resources:
Juniper Research
PYMNTS
Formstack
Association for Financial Professionals