The ultimate guide to virtual card rebates, savings, and profits

Virtual cards have become a mainstay in payments for businesses around the world. But many may not realize that virtual cards offer distinct advantages over ACH or traditional checks as a form of payment. And have you heard of virtual card rebates? Let’s break down these complexities and enhance your businesses’ financial efficiency today. 

What is a virtual card rebate? 

Virtual card rebates are incentives offered by issuers (such as WEX or a credit card company), providing cash back or discounts exclusively for virtual card payments. Unlike traditional rebate programs, virtual card rebates are seamlessly woven into the payment process, offering businesses a hassle-free way to optimize their spending. These rebates also eliminate the need for manual paperwork, helping your business save money and time. With virtual card rebates, organizations can increase efficiency while enjoying the benefits of an automated rebate system.

How do virtual card rebates work? 

When a business pays with a virtual card, the issuer automatically calculates and applies the rebate based on predefined criteria. The rebate is applied to the transaction, ensuring businesses experience quick cost savings. This automated process is a seamless and user-friendly experience, where cost reductions are easily reflected in the transaction.

Revenue potential versus other payment types

Virtual cards vs. traditional check payments

What can make checks a cost center? 

• Accounts payable teams that rely on traditional check payments often incur expenses related to check printing, postage, and mailing.
• Manual processes, such as check issuance and reconciliation, are time-consuming and require dedicated staff.
• Delayed payment processing can lead to missed early payment discounts, potentially costing the organization money.

How can virtual cards turn accounts payable into a profit center?

• By switching to virtual cards, accounts payable teams can earn rebates on the payments made to suppliers who accept virtual cards. These rebates turn what used to be an expense into a source of revenue.
• The streamlined and automated payment process reduces the labor and administrative costs associated with check payments, freeing up resources for more strategic activities.
• Faster payment processing with virtual cards enables organizations to capture early payment discounts more consistently, resulting in cost savings and improved cash flow.

Virtual cards vs. ACH

What can make ACH a cost center? 

• ACH payments are generally more cost-effective than paper checks but still involve transaction fees.
• Accounts payable teams may still need to dedicate resources to managing payment files, ensuring data accuracy, and reconciling payments.
• ACH payments lack the revenue-generating potential of virtual card rebates.

How can virtual cards turn accounts payable into a profit center?

• Virtual cards offer similar cost-saving advantages when compared with other payment types but also provide the opportunity to earn rebates, effectively turning payments into a source of income.
• The automation and efficiency of virtual cards reduce the administrative burden on accounts payable teams, allowing them to focus on value-added tasks.
• By encouraging suppliers to accept virtual cards, organizations can maximize their rebate potential and further increase their revenue.

Virtual cards vs. physical credit cards

What can make physical credit cards a cost center? 

• Accounts payable teams that rely on physical credit cards may incur annual fees for each card issued to employees.
• Expenses related to card issuance, replacements, and cardholder training can add up.
• Physical credit cards do not typically offer rebates or cashback benefits to the organization.
• The risk of unauthorized or excessive spending can be higher compared to virtual cards.

How can virtual cards turn accounts payable into a profit center?

• Virtual cards can offer similar expense reduction benefits as physical credit cards, such as reducing the need for paper checks and manual processes.
• Unlike physical credit cards, virtual cards often come with the potential to earn rebates, effectively turning payments into a source of revenue for accounts payable teams.
• Virtual cards can provide more granular control over spending, allowing accounts payable teams to set specific transaction limits and restrictions.
• Enhanced security features of virtual cards, such as one-time-use card numbers, reduce the risk of fraud and unauthorized spending.

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

• Is the secret to better cash flow management AI?
• Traditional vs. virtual payments
• Mobile wallets for B2B transactions

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.

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

Editorial note: This article was originally published on February 26, 2024, and has been updated for this publication.