Accounts payable (AP) departments manage a lot of numbers, data, and vital information to ensure their businesses run smoothly. What more could you ask for than an opportunity to make things easier when running your AP department? Here we’ll look at how adopting a digital card payments process can help you do just that.

What are virtual cards?

Virtual cards were created to help simplify running your business by automating accounts payable (AP) processes, reducing the cost of paying suppliers, and creating more secure payments. A virtual card provides a randomly generated single-use code that is used for the payment of goods and services. A virtual card is perfect for secure transactions because it can’t be used repeatedly and is created with a pre-set amount that is determined by the user making the payment. Once payment is processed by the supplier, the card cannot be used again. Since there is no physical aspect to a virtual card, the process improves the experience for all parties involved in AP.

What are virtual card payments?

Virtual cards can be designated for many types of payments and accommodate the varying payment needs of suppliers. A virtual card not only reduces the manual labor required of an AP department to pay suppliers, but it also has increased security measures that reduce the possibility of fraud impacting your business. Once a virtual card payment has been made, the virtual card can be set to expire if the charge is not made within the designated time frame. This feature increases security measures and reduces the likelihood of cards being charged wrongfully.

For companies that regularly pay the same supplier for goods and services, virtual cards can simplify repetitive payments. The AP department in charge of paying suppliers typically requires manual labor, mailing expenses, and more, but with the use of virtual cards, the entire process is simplified for all involved. When virtual cards are utilized, vendors can plan to get paid on time – and sometimes faster – instead of waiting for a physical payment to come through the mail.

Benefits from adopting a digital card for your business

Looking beyond the simplicity that comes from adopting virtual cards into your business, there are several additional ways that virtual cards can improve your business. Here are six benefits that businesses can experience when paying suppliers electronically:

Reduce fraudulent payments

• Virtual cards drastically decrease fraudulent payments by expiring once the dollar amount has been processed to the recipient. Since there is no physical card to steal or static credit card number to use improperly, this process reduces the chances of fraud impacting your AP.

Save AP costs and decrease manual processing

• The time and money taken to process and send physical payments is not insubstantial. Using a digital payment solution to pay suppliers eliminates dealing with paper checks, bank deposits, bank check processing fees, and shipping costs.

Act sustainably

• Moving to an electronic payment system means that your business decreases its usage of paper, which is environmentally sustainable.

Improve payment accuracy

• For AP departments that are swarmed with paying vendors, duplicate payments can occur by mistake. Virtual cards simplify this process because you can assign the amount, and the card cannot be processed more than once. Simplifying, securing, and speeding up transactions with suppliers can lead to stronger relationships

Optimize AP operations

• Virtual cards can increase the speed in which suppliers are paid. This benefits both parties and frees up time for the AP department to put efforts elsewhere. Faster payments translate to more on-time payments, and that can strengthen relationships with key stakeholders and suppliers.

Simplify the payments experience for all

• Using a virtual accounts payable system not only simplifies the life of the AP department, but it also creates an easier experience for vendors. Virtual card payments provide the convenience that every accounts payable department needs and wants, and accounts receivable teams can benefit, too. A payment sent electronically can be deposited into a supplier’s account much faster than a physical payment method. In addition, a digital payment is traceable and has significantly fewer fraud threats as it cannot be intercepted or white-washed like paper checks.

Gain competitive advantage by embracing technology to move your business forward

Take the next step to move your business forward and digitize AP operations. Converting to a digital payment solution helps your businesses stand out against competitors and stay ahead of technological trends in your industry. The future of business operations is transitioning to a digital format where everything can be easily accessed electronically. There is also a growing culture shift to measurable sustainability practices in businesses, which further justify the importance of going paperless. Stay competitive and integrate virtual card technology into your business.

By incorporating a virtual card system and online payments, AP departments – which traditionally are cost centers – can be made into revenue generators. Doing so also enables efficiency and security.

Making the switch from manually intensive payment processes, such as writing physical checks, to automated accounting systems can be an effective way to save money. Processing checks is costly for suppliers since banking and processing fees can vary greatly depending on the size of the business and its financial institution.

According to the Association for Financial Professionals, the average cost of processing a check is around $2  to $4, whereas ACH payments (a type of virtual payment) typically cost around $0.26 to $0.50. Virtual card payments not only offer similar cost savings but can also generate rebates, giving companies a chance to earn money back on their outgoing payments.

Small businesses that receive or write thousands of checks per year become burdened with costs for envelopes and stamps. Plus there is the time spent writing, mailing, collecting, and reconciling those payments.

Adding to your company’s bottom line can be achieved with a virtual payment system that not only eliminates fees, but also generates revenue as a result of the savings created by eliminating manual processes.

Overcome the fear of integrating a digital payment system

Even with all the benefits, converting to a virtual payment system can be daunting. Systems need to be in place in order to adopt virtual card payments to suppliers. First and foremost, suppliers need to be on board with converting and receiving a digital payment compared to traditional paper checks. Convincing vendors to transition to a new and different payment method can present hurdles.

Get started with a WEX virtual card for AP payments

Using a virtual card payment solution is very similar to the payment process of a credit card. Although most suppliers are likely to have experience using a credit card, your business still needs to dedicate time to educate them on the differences and benefits of using a virtual card.

Learn more about how to get started with a digital card payments program.

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

• Your guide to virtual card rebates
• 2025 payment trends
• Accounts payables: Terms you need to know

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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