Unlocking the Benefits of a Virtual Card for B2B Transactions

Managing business finances efficiently is crucial for any organization. With advancements in payment technologies, virtual cards are gaining popularity. These digital tools are transforming how businesses handle transactions, offering speed, security, and flexibility.

If you're looking to have a better purchasing strategy for your company, this guide will unpack the benefits of virtual cards, show how to leverage them in conjunction with financing, and help you decide when they're right for your business.

What is a Virtual Card?

A virtual card is a digital payment solution linked to your existing bank account or line of credit. Unlike traditional plastic, physical cards, virtual cards exist entirely online, with a unique virtual card number generated for your transaction. They offer the convenience of electronic payments with added layers of security and control.

A virtual card can serve as a virtual debit card or as a virtual credit card, depending on the type of account it is connected to. Because virtual cards can be created quickly and easily, you can easily have multiple virtual cards with their own unique virtual card numbers. Whether you use one or many virtual cards is up to you and your purchasing and financing strategy.

For businesses, virtual cards are a powerful tool for streamlining B2B payments, managing expenses, and reducing risks. Whether you're handling vendor payments or subscriptions, virtual cards can make transactions more efficient and predictable.

How Do Virtual Cards Work?

Virtual cards operate similarly to traditional credit cards or debit cards. Once issued by your financial institution, they can be used for online payments. Each virtual card and the corresponding unique card number is created with one click and is typically ready to use within minutes. In some instances, you may spin up a new virtual card for a one-time purchase. In other cases, you may create a virtual card for different spending categories.

One of the best things about a virtual card in comparison to a physical card is the increased level of flexibility. Virtual cards can be used in customized ways that fit your purchasing strategy with added security and higher levels of control.

Here’s a general workflow for virtual cards:

1. Card Generation: You or your finance team generate a virtual card via your bank, payment platform, or alternative financing partner.

2. Set Parameters: Assign spending limit, specific vendors, or timeframes for use.

3. Make Payments: Use the card details for online transactions or vendor payments.

4. Track Spending: Monitor payments in real time through your card provider's dashboard.

With these steps, businesses can ensure payments are both secure and easy to manage.

Key Benefits of Virtual Cards

Similar to how Apple Pay and Google Pay are revolutionizing B2C payments, virtual cards are bringing B2B transactions into the modern age. By creating more ease and flexibility in the B2B purchasing process, virtual cards are addressing longstanding inefficiencies in traditional payment systems.

Here's a breakdown of their most impactful advantages:

1. Quicker Purchase Processing

Traditional payment methods, like bank transfers or checks, can be slow and cumbersome. Virtual cards streamline this process by enabling instant payments. When you're paying vendors, the speed of a virtual card ensures smoother operations and fewer delays. You can pay for and get access to mission-critical tools and technology in minutes.

2. Better Cost Management

Virtual cards empower businesses to manage expenses more effectively. You can allocate specific spending limits for each card, track purchases in real time, and even generate different cards for different departments, vendors, or projects. This means better control over spending and fewer surprises when the invoices roll in.

3. Higher Security

Security is a major concern in B2B transactions, and virtual cards are built with this in mind. Each card can be generated for single use or restricted to specific vendors. Even if the card details are intercepted, they can't be misused beyond the set parameters. This level of control is a game-changer for reducing the risk of fraud.

Additional security features include:

• A digital card number that is only used for specific purchases.
• The ability to deactivate a card instantly if suspicious activity is detected.

Real-Life Use Cases for Virtual Cards

The advent of virtual card payments brings many new opportunities. When you begin to understand how they work and their practical applications, you gain access to the wealth of new strategies you can implement.

Here are two common use cases that can transform business operations:

1. Bucketing Spend by Different Virtual Cards

Organizations of all sizes struggle with monitoring department-level spending. Whether you're a startup with every team moving fast and furious or a large organization with countless teams, virtual card transactions can provide you some relief.

With virtual cards, you can assign separate cards to different budgets or teams for better accountability. For example:

• Use one card strictly for hardware purchases and another for software purchases
• Assign cards by department: one for product and engineering and one for marketing

This segmentation not only simplifies reporting but also ensures compliance with internal budgetary policies.

2. Virtual Card for Your Purchases Made With Financing

If your business uses alternative financing to fund operations, virtual cards can complement this strategy. By tying your financed funds to a virtual card, you can:

• Track financed payments in real time.
• Ensure borrowed funds are spent within approved categories or for critical needs only.

This combination of financing and controlled spending minimizes waste and ensures maximum ROI on financed capital.

How to Get Your Own Virtual Card

Getting started with virtual cards is surprisingly straightforward. Each time you create one, you'll be surprised by how simple it is.

Here are four steps to getting a virtual card:

1. Research Providers: Start with what you're already using. Your current bank account, credit card account, or financing provider may already offer a virtual card program. Some popular providers like Ramp, Brex, and Revolut offer virtual card options. Here at Gynger, we provide a virtual card for making purchases when using our alternative financing. 

2. Decide Your Strategy: Using this blog as guidance, decide how you want to strategically use virtual cards. Do you want to use one across the company? Or do you want to use separate cards for different needs?

3. Create the Card: With most providers, your card can be activated within minutes. It can be as simple as a click. Once you have it created, you can start using it for virtual card payments

4. Use the Card: You may have created the card for one specific purchase to get started, but as we've covered, you can start using it for more. If you have a recurring subscription or other online purchases with stored card data, you can update the card details to the new virtual card. You can also continue to use the card for your intended spending strategy. Virtual card acceptance is typically the same if the company accepts other forms of credit cards or debit cards, so feel free to use it as needed.

How Virtual Cards Work with Alternative Financing

You can save money, extend runway, and improve cash flow by using Gynger to pay your technology bills upfront while paying us back later. As an alternative financing solution, we make the financing process easy, and we strive to simplify the payment process. We know B2B purchases have been stuck in the past, and we're here to help change that.

With Gynger you can use alternative financing to pay for your tech expenses and use virtual cards to pay for those purchases. How it works:

• Virtual card recommendations: Once you set up your Gynger account and integrate your accounting software, we automatically make recommendations based on the purchases that would be a good fit for our virtual card.
• Flexible payment options: When you create your virtual card, you also choose the payback terms. Different from what you experience with other credit cards or charge cards, with Gynger, you don’t have to pay off the balance every month. These flexible payment options allow you to pay off the balance on a schedule that works best for your business: monthly over 3, 6, 9, and 12 months or net terms of net 30, 60, and 90.
• Multi-vendor card usage: You can use the same virtual card to pay for tech expenses for multiple vendors, or you can spin up different cards for different vendors. As discussed above, your virtual card strategy can be as customized as you want it to be.
• Auto-renewal Card Reloading: You can reload the same card, month after month, with new funds to put towards next month’s tech spend. If you have any unused funds on the card from the initial 30 days, then those funds are automatically carried over reducing the loan amount that you're requesting for next month.

Are Virtual Cards Right for Your Business?

Virtual cards aren’t just a trendy fintech solution—they’re a practical tool for businesses of all sizes. To decide if they’re right for you, ask yourself these questions:

• Does your business frequently process online payments or subscriptions?
• Are tracking and managing expenses a consistent challenge?
• Do you prioritize secure transactions and fraud prevention in your payment processes?

If the answer is yes to any of these, adopting virtual cards can offer significant benefits, from improved operational efficiency to stronger financial oversight.

Streamline Your Transactions with Virtual Cards

Virtual cards are more than just a payment method—they're a gateway to smarter, more controlled business operations. Whether you're refining your budgeting process, preventing fraud, or simply leveling up your payment game, virtual cards offer a solution.

Get started with alternative financing and pair it with a virtual card to unlock a new level of financial control, security, and flexibility.