As corporate travel rebounds post-pandemic, virtual cards (VCC) are emerging as a solution for travel-management companies settling supplier invoices.
The business travel industry is experiencing a digital payment transformation and VCCs are at the centre of this shift. This technological revolution is reshaping how TMCs, online booking tools, and corporate travel buyers settle billions in supplier payments.
What is a VCC?
At its core, a VCC is simply a digitised version of any traditional payment card, whether it's a credit card, corporate card, or specialised business card. The virtual format generates a 16-digit card number electronically, along with CVV and expiration date.
An important clarification for the South African market: the ‘virtual’ aspect of these cards does not inherently attract surcharges. Regular MasterCard and MasterCard Business cards carry no surcharge, whether they're issued as physical or virtual credentials.
This is because interchange fees in South Africa are regulated, meaning domestic cards follow standardised pricing. However, surcharge issues do arise with cards issued in foreign countries.
What makes VCCs compelling isn't avoiding surcharges, but rather their operational advantages: the ability to create multiple sub-versions from one account, instant cancellations and reissuance and sophisticated fraud controls that are impossible with physical cards.
What are the benefits of VCCs?
1. Enhanced fraud protection
Virtual cards dramatically reduce fraud exposure through their unique issuance model. Rather than using a single corporate card number across hundreds of transactions, creating multiple points of vulnerability, businesses can generate a unique card for each individual booking. Once the transaction settles, that card number expires and becomes worthless to fraudsters.
This one-card-per-transaction approach means that even if a hotel or airline's payment system is breached, the stolen card data cannot be reused.
2. Simplified reconciliation
Traditional corporate cards create reconciliation nightmares for travel finance teams. A single statement might contain dozens of hotel charges, airline tickets, and ground transportation bookings with minimal identifying information, forcing staff to manually match transactions to travellers, projects and cost centres.
VCCs transform this process through embedded metadata. Each card can carry third-level data, including travellers’ names, booking references, project codes, cost centres and custom descriptions. This information flows directly through to accounting systems, enabling automated one-to-one reconciliation.
Platforms like Glyde enhance this further by allowing users to add titles, descriptions and additional metadata at the point of card issuance. When the transaction appears on the statement, all the context needed for reconciliation is already attached.
3. Instant payments for cross-border transactions
For international travel bookings, traditional payment methods create significant delays. SWIFT bank transfers can take three to five business days to settle, creating uncertainty for both buyers and suppliers. Currency conversion adds another layer of complexity and delay.
VCCs enable instant payment across borders. A TMC in Johannesburg can book a hotel in London and settle payment immediately via card rails, with funds reaching the supplier within one to two business days.
The instant issuance capability also enables process automation. Rather than waiting for finance department approval and manual payment processing, booking systems can generate and assign VCCs automatically, eliminating bottlenecks and human intervention.
How to maximise VCC benefits
Realising the full potential of VCCs requires thoughtful implementation rather than simply swapping physical plastic for virtual numbers.
One card per transaction: The cornerstone of effective VCC use is generating a unique card for each booking. This maximises fraud protection, simplifies reconciliation, and provides granular visibility into spending. While it may seem administratively intensive, API integration makes this seamless at scale.
API integration: Leading VCC platforms offer APIs that integrate directly with booking systems and travel management software. This eliminates manual card generation, automatically creates cards with appropriate limits and expiration dates and embeds relevant transaction data without human intervention. The result is a streamlined workflow that scales effortlessly from dozens to thousands of monthly bookings.
Controlled agent access: For TMCs with multiple booking agents, VCC platforms should provide secure, controlled access with appropriate permissions. Rather than sharing a single corporate card number across the team, each agent can generate cards as needed within their authorisation limits. Robust two-factor authentication, detailed audit logs, and transaction-level visibility ensure security while enabling operational flexibility.
This combination of unique cards per transaction, automated issuance via API, and controlled multi-user access transforms VCCs from a simple payment method into a comprehensive travel payment management system.
Not all cards are created equal
While VCCs offer clear advantages, significant differences exist between providers, particularly for cross-border transactions where hidden costs can eliminate perceived benefits.
See the second part of Paulina Klotzbücher’s column next week on Travel News, delving into the challenges of cross-border transactions.
