Let’s face it — fraud isn’t going anywhere. With the rapid advancements of technology, the risk of fraud is only increasing. According to the 2023 AFP Payments Fraud and Control Survey, 65% of respondents indicated that their organizations were victims of either attempted or actual fraud activity in 2022, with 63% percent of respondents reporting that their fraud activity was mainly via checks.
As check fraud schemes become increasingly sophisticated, the need for more secure payment alternatives is needed now more than ever. Virtual card, or “vCard,” payments provide fraud protections that make them significantly safer than checks, perhaps the most convincing rationale for transitioning to this payment method.
Boost’s Chief Compliance Officer, Elly Aiala, seems to agree: “Embracing virtual cards isn’t just a prudent choice; it’s an indispensable step towards a resilient and secure future in the realm of B2B transactions.”
“Virtual card payments are growing at a tremendous speed,” said Steve Smith, U.S. Chief Operating Officer at Esker. “We’ve seen a huge uptick in card issuance on the AP side and want to be a step ahead as it progresses to the receiving end.”
So, what are the top five reasons vCards are considered the most secure payment option for B2B clients? Let’s dive in ...
1. No physical card
VCards are digital representations of a physical card that are used to remotely make purchases in a digital environment. Since you have complete control over vCards, you can block or freeze these cards instantly with ease in case it is compromised. Think about it this way — you never have to deal with initiating a cancellation process, awaiting the issuance of a new card, and then dealing with a cumbersome dispute resolution procedure if the card number is lost, stolen or compromised, like with a physical card.
Esker helps leverage these fraud-prevention mechanisms by offering a single interface offering visibility into all the cards received, their current status and the customers/invoices they are associated with. That’s where the value of vCards as a form of payment is compounded and revealed: without ever touching a vCard email again, operational teams can easily track incoming payments and address exceptions when they are not automatically processed and applied to open invoices.
2. Enforcement of spending limits
VCards allow you to set specific spending limits for each card to prevent overcharging. This enables better control over expenses and ensures that transactions do not exceed predetermined thresholds. For example, if your virtual credit card number is active and you’ve set a $100 limit on it, an untrustworthy merchant or an identity thief can’t charge more than that to the number.
The central interface that Esker provides, associated with Boost’s seamless processing, means the acceptance rules and mechanisms can be automatically applied to incoming payments, delivering even more operational efficiencies. AI plays a big role in this process, pre-identifying where a given payment is supposed to go and which customers and invoices they are associated with.
Sources of payments are pre-verified, cards are automatically processed, and proceeds are sent daily to suppliers and automatically applied to the invoices they are supposed to pay. No more manual recognition and allocation — the system guides itself!
3. Account number expiration & automated deactivation
To ensure timely payment processing, virtual credit cards can be assigned expiration dates. In case a payment remains unprocessed within the permitted timeframe, the account number becomes invalid and cannot be charged. In other words, no one will be able to make a charge with your card after the set time period has elapsed. The time can be as short as 24 hours, so even if a merchant with your virtual credit card number was hacked days after you made a purchase with them, you wouldn’t have to worry.
Upon successful payment processing, a virtual account number promptly transitions into an inactive state, making it unusable thereafter. This proactive measure significantly diminishes the likelihood of deliberate fraudulent activities, as well as unintentional occurrences of duplicate charges after the payment is complete.
Integrated systems such as Esker’s embedded vCard processing with Boost allow for quasi-instant processing, meaning there is little time for fraudulent agents to intercept incoming payments.
4. Reduced risk of fraud & ability to outsource PCI compliance requirements
VCards also help to mitigate the risk of fraud through several means. First of all, emails containing card numbers and payment information are directed to PCI-compliant partners instead of the company, ensuring secure handling and reducing the chance of interception by malicious actors. Moreover, a common concern with such payments is the potential for suppliers to receive unsolicited emails containing sensitive card details. By involving specialized partners equipped to handle reception and processing, this risk is substantially minimized.
Additionally, since companies do not retain card numbers in their systems when utilizing vCards, they are exempt from stringent PCI compliance requirements, further enhancing security and streamlining regulatory adherence. This approach not only bolsters security but also builds trust and confidence in B2B transactions and facilitates smoother business operations all around.
5. Full visibility into payments & how they are applied to open receivables
Leveraging vCards in B2B payments offers comprehensive visibility into transactions. Businesses gain the ability to track incoming vCard payments via dedicated dashboards, providing real-time updates on payment statuses. Users can efficiently route vCard payments for processing, ensuring streamlined operations and minimizing delays. The transparency extends to cashed vCards as well, as users can easily trace the proceeds and understand how to securely apply them through cash application processes.
This level of visibility gives organizations actionable insights into their financial flows and helps promote informed decision-making and enhanced financial management. With clear oversight of payment statuses, processing workflows and cash application procedures, businesses can maintain better control over their financial operations.
A safer outlook with vCards
It’s no wonder why the vCard global market was valued at USD 13.31 billion in 2022 and is anticipated to expand at a compound annual growth rate (CAGR) of 20.9% from 2023 to 2030, according to Grand View Research. As we see more businesses adopt vCards for their B2B transactions, we can begin to see benefits of reduced fraud risk and cyber threats globally, making vCards the most trusted payment method for businesses worldwide.
With Boost Payment Solutions, our patented technology maintains high levels of security and reduces fraud risk for buyers, suppliers and financial institutions worldwide. In fact, over the last two years, Boost has successfully processed billions of dollars’ worth of payments with no fraud losses. If you're navigating the world of B2B payments, learn more about vCards here and start safeguarding your company’s financial integrity.
This blog was co-written by David Bork, Senior Vice President of Business Development at Boost Payment Solutions.
