In the digital economy, traditional corporate payment credit cards will eventually become virtual, app-based and a boon to administrative efficiency.
To enable businesses to digitalize and streamline all their payment requirements, a mobile solution called Visa Commercial Pay is available now. This solution provides businesses with real-time visibility of their employees’ spending on the virtual purchasing card, and also captures enhanced data for automatic reconciliation. Even non-employees can be issued such virtual cards on demand via their mobile app for contactless, in-app and online payments in their work.
Benefits that can be unlocked by having better visibility include the identification of core spending categories, and with that knowledge, more effective price negotiation with suppliers is possible. Such virtual commercial payment cards reduce the need for employees and non-employees to pay out of their own pockets first, as the card can be instantly issued even for ad-hoc transactions.
Visa’s Country Manager for Singapore & Brunei, Kunal Chatterjee, commented: “The opportunity to convert more business payments to be made digitally is tremendous in the commercial sector. We believe it is important for us to work with our partners … to introduce innovative solutions that will benefit corporates—including the ability to issue virtual commercial cards instantly to employees of organizations so that they can make business payments seamlessly. We are also proud to share that it will be the first time in the world that corporates are able to make mobile contactless payments using their virtual payment cards with Visa Commercial Pay.”
Virtual vs traditional commercial cards
Compared to traditional commercial cards, the new Visa Commercial Pay card offers the following advantages:
|OCBC Virtual Purchasing Card||Traditional Commercial Card|
|Issuance||Managers can instantly issue virtual cards to both employees and non-employees for business purchases. ||It typically takes weeks from application to the issuance of the physical card to employees.|
|Controls||1) Option of single-use in addition to recurring-use virtual cards with pre-defined control parameters and customized data fields for each invoice payment to suppliers. |
2) Managers can issue cards with pre-set spending limits and validity periods.
3) Managers can limit the virtual card’s use to certain categories of goods and services. For instance, if a virtual card is issued for laptop purchases, the card cannot be used at non-electronics stores.
|1) No option of issuing single use cards.|
2) A physical card is a one-time issuance and spending limits are fixed, generally at higher levels, which could lead to overspending. The validity period usually spans years and automatically renews.
3) No option to restrict spending to certain categories only. In the ‘spend first, approve later’ process of a traditional commercial card, the purchases made using the card would only be known to the manager when the monthly statement is generated for his approval.
|Security||1) For tap-and-pay contactless payments, employees and merchants never see the card details. |
2) For online payments, while employees can see the card details, fraud risk is mitigated with option of issuing single use cards (see “Controls” above)
|As card details are on the physical card, they are exposed to the employee and merchant, and therefore subject to potential fraud risks.|
The first organization in the world to adopt this card technology is OCBC Bank. Its Virtual Purchasing Card also features two other B2B payment offerings: Visa Commercial Pay B2B and Visa Commercial Pay travel.
- Visa Commercial Pay B2B: A digital platform that allows corporates to generate unique virtual card numbers with pre-defined control parameters and customized data fields for each invoice payment to their suppliers.
- Visa Commercial Pay travel: A solution that enables businesses to centrally manage their business travel spend, such as air travel, hotel, rail and car rental. The solution seamlessly integrates into business travel reservation processes and can deliver enhanced travelers’ data, full spend visibility and automated expense reconciliation through the use of unique virtual card numbers for each booking. Travelers are also able to view their travel reservations together with their trip spend within the Visa Commercial Pay mobile app.
According to OCBC Bank’s Head of Global Transaction Banking, Melvyn Low: “The virtual card is a highly secure payment solution that gives a bird’s-eye view on spending, which is data that many businesses do not yet have access to today. We expect the take-up to be strong, especially for businesses looking to introduce a commercial card scheme for the first time as they can now leap-frog physical cards and go straight to a virtual card scheme.”
The bank’s first customer for the card is the Singapore University of Social Sciences (SUSS), and it will be piloted to employees in Q2 2021. Said Kwek Peck Lin, Director for Planning & Finance, SUSS: “This virtual card solution makes payments easier for our employees—everything can be done via mobile app—and for our finance department too. In terms of security, virtual cards provide more assurance compared to traditional commercial card solutions, and that was also an important factor for us when deciding to come onboard.”