The transformation of the traditional corporate credit card

Advancements in technology and changing consumer preferences have had a significant impact on B2B payments digitization. The growth of digital platforms, mobile devices and secure online communications has prompted businesses to adopt more convenient and efficient payment methods. And as consumers, we’ve grown increasingly familiar with seamless digital transactions in our personal lives, driving demand for similar experiences with B2B payments.

Checks and manual processes simply won’t cut it anymore – but is there still a place for corporate credit cards?

The answer is a resounding yes.

Corporate credit cards today

Corporate credit cards have existed for decades and mostly remain the same in both form and function. There are many card types that can be issued depending on an employee’s role and spending requirements. The three most common are corporate, purchasing and one cards.

  • Corporate cards are used to pay for travel and expense costs incurred on behalf of the organization. Liability for payments can be solely on the organization or shared between the organization and individual employees. These cards can be used anywhere.

  • Purchasing cards (commonly known as p-cards) are used for B2B goods and services. Some can be set up with a predefined group of vendors or vendor types, such as preferred suppliers or office supply stores. These cards are the most restrictive in where and how they can be used and are typically for business versus individual purchases.

  • One cards are effectively a hybrid of purchasing and corporate cards. The organization can implement additional features, like spending and vendor restrictions, and tailor the card to the organization’s needs.

In addition, there are virtual credit cards. Think of a virtual credit card as a digital extension of a corporate, purchasing or one card program. Like a plastic card, a virtual credit card has a unique card number and CVV code that is linked to an existing card program. Unlike a plastic card, it can be for single use (for a specific transaction) or limited use (within a predefined timeframe). Virtual credit cards can be issued at any time, to anyone and used immediately.

“The global value of virtual card transactions is expected to jump to $6.8 trillion [by 2026] — compared to $1.9 trillion [in 2021] — and a large portion of that growth will come from business-to-business (B2B) transactions.”1

The growth of virtual credit cards

The corporate payment industry has witnessed an increase in virtual credit card use in recent years – and this growth is expected to continue. This is due, in part, to the following.

First, organizations now place greater value on the benefits of virtual cards. They’re a highly secure, efficient payment form that provides strong oversight and control. Virtual cards also have more functions than plastic cards, with new applications emerging regularly.

Second, virtual payment capabilities have expanded to solve many needs beyond general payables, such as mobile wallets for immediate purchases and card numbers for cardless travelers.

Finally, as mentioned before, our payment preferences are changing. As employees become more accustomed to the ease of digital payments in their personal life, they are beginning to expect the same in the workplace. 

New market entrants driving change

Embracing digital payments has accelerated from the realm of early adopters and into the mainstream. Fintechs and other new competitors have entered the payments space and are changing how we use corporate and virtual credit cards.

For example, fintech innovation created single-use virtual cards. These cards are generated for specific purchases and facilitate secure, efficient B2B payments.

Fintechs also were the first to introduce digital wallets. Digital wallets allow users to keep their payment-related information, including corporate credit cards, in one place and use near-field communications (NFC) technology to make in-store purchases.

Fintechs have focused on creating secure and simple-to-use payment methods. These solutions will play a key role in the continued evolution of digital B2B payments.

The benefits of virtual cards

Virtual credit cards offer several benefits for B2B payments and play a crucial role in the digitization of payment processes.

Improved control and security

Virtual credit cards provide the unparalleled ability to limit where and when purchases can be made. Virtual cards generated for a specific transaction or time period not only improve control but also reduce the risk of fraud and unauthorized usage.

Integrating virtual cards with online booking, expense management and financial systems can further improve employer control with built-in spending controls, real-time transaction reporting, approval workflows and other features.

Enhanced reconciliation and spend visibility

Managing and reconciling expenses manually is time consuming, cumbersome and error prone. Virtual cards are a completely digital experience that drastically simplifies reconciliation and improves visibility, saving valuable time and money.

If card statements are directly imported into an expense management solution, reconciling individual cardholder spend is significantly easier, as it eliminates the manual process of matching receipts against statements. Centrally storing all data also makes consolidated reporting more straightforward and allows for more effective budget tracking.

In addition, centralized data provides more complete data sets for real-time analytics on corporate spend. This insight could help finance departments and business analysts make smarter travel planning decisions, secure better negotiated rates with vendors, minimize inefficient spending and identify possible fraud.

Managing cardless employees

Traditional corporate credit cards are often issued to a core group of road warriors who travel regularly and to employees who make purchases on behalf of the organization. Organizations face limited options for employees without a corporate card who need to travel or make business purchases, contractors or freelancers who submit expenses for reimbursement, and interviewees who request travel reimbursement. Personal credit cards, checks or even cash are often used in these instances.

Although most are eventually approved, an organization has limited control and visibility over these kinds of expenses. And because these purchases are not part of an organization’s card program, they also require expense reports for tracking and reimbursement as well as additional levels of approval, all of which take a long time to complete and process.

Virtual credit cards and mobile wallet capabilities reduce these logistical headaches by removing the burden of an employee paying out-of-pocket and requesting reimbursement while providing the employer control over and visibility into spend.

Reduced risk and fraud exposure

A major drawback to physical cards is that they can be lost, stolen or otherwise compromised (e.g., the number can be skimmed at gas stations or restaurants).

With virtual cards, the account data isn’t physically available or even stored on a mobile device. Instead, the device stores a randomly generated token that is linked to the account information. A fraudster would not only have to steal the device but also know the passcode – and even then they could only make purchases through the phone’s mobile wallet, as tokens make it nearly impossible to get the full account details.

Even in the unlikely event that a fraudster attempts a transaction, restrictions on merchant category codes (MCC) can further minimize potential fraud. For example, if restrictions are placed on vendors with goods that can be resold quickly, like electronics or clothing stores, transactions at those vendor types would be rejected.

Added convenience

Issuing new cards or cancelling and reissuing compromised cards can be a hassle. And depending on the employee’s location, it can take one to five days to receive a plastic card, which can be a major inconvenience. Virtual cards can be issued and used immediately – eliminating the wait for a physical plastic card.

Other benefits

There are ancillary benefits that organizations could achieve by channeling more spend through corporate card programs. Virtual credit cards can be used for a wide range of business payments and new use cases continue to emerge.

Corporate credit cards are traditionally used for low-value purchases that do not require advance approval such as office supplies, maintenance/repair/operations, and travel and expense (T&E) costs. Higher-value goods and services such as office equipment, cost of goods sold and professional services that require approval through purchase orders or other documentation have conventionally been paid by check, wire or ACH.

Using a virtual credit card instead for higher-value, invoice-based purchases can allow more spend to be captured as part of the corporate credit card program, increasing rebate potential. The ability to extend payment terms by floating card balances could have a positive impact on cash flow, too.

In addition, uses are expanding beyond direct organizational purchases. For example, organizations can embed virtual cards as part of their payment experience for things like claims payments or travel credits. Virtual cards not only can increase rebate potential by capturing previously uncardable expenses, but they can also improve customer satisfaction by eliminating the wait for reimbursements or vouchers.

Paving the way for B2B payments digitalization

Corporate credit cards still have a place in today’s ever-evolving B2B payment trends. The corporate credit card landscape is changing to accommodate new technology and business preferences – and virtual credit cards are playing an integral part of this transformation. By offering unparalleled security, efficiency, convenience and transparency as well as increased rebate potential, virtual payments are redefining how businesses make payments.

To adapt to the digitalization of B2B payments, organizations should look no further than their current corporate credit card program. 

Start of disclosure content


1Virtual Card Use, Payment Choice, On the Rise. March 2022.

The creditor and issuer of U.S. Bank charge cards is U.S. Bank National Association, pursuant to separate licenses from Visa U.S.A., Inc., and Mastercard® International Inc.

Notice: Foreign-denominated transactions are subject to foreign currency exchange risk. Customers are not protected against foreign currency exchange rate fluctuations by FDIC insurance, or any other insurance or guaranty program.

The foregoing products are available solely for business transactions and not for personal, family or household transactions.