Written by A virtual card is a payment card that exists only digitally. It’s not a physical plastic card but is issued virtually through a digital platform or payment app. Virtual cards are often used for online purchases, subscriptions, and one-time transactions. They can be generated instantly and come with unique card details (card number, expiration date, and CVV) that are typically linked to a bank account or credit line.
What Are Physical Cards?
A physical card is a traditional, tangible debit or credit card issued by financial institutions or card providers. These cards are used for both online and in-person transactions, and they’re widely accepted across various payment networks like Visa or Mastercard. Physical cards are often used for everyday business expenses, such as travel, office supplies, and team purchases.
Advantages of Virtual Cards
1. Instant Issuance
Virtual cards can be generated instantly through most platforms, making them perfect for businesses that need a card immediately. There’s no waiting for physical delivery, which is especially helpful for startups or businesses in urgent need of a secure payment method.
2. Enhanced Security
Virtual cards offer increased security by creating temporary or disposable card numbers that can be used for one-time or recurring payments. If your card details are compromised, it won’t impact your main business account. Many platforms also allow you to set spending limits, expiration dates, and merchant restrictions to prevent unauthorized use.
3. Lower Costs
Virtual cards often come with lower fees compared to physical cards because there are no manufacturing, shipping, or card replacement costs. This makes them a cost-effective option for businesses, especially those with high transaction volumes.
4. Easy Integration with Digital Tools
Virtual cards are ideal for online transactions and can easily integrate with digital tools such as accounting software, payment systems, and e-commerce platforms. This makes them a great option for businesses that operate primarily in the digital space.
Advantages of Physical Cards
1. Widely Accepted
Physical cards are universally accepted and can be used for both online and in-person transactions. Whether you’re making payments at a restaurant, purchasing office supplies, or booking travel, physical cards offer more flexibility for a wide range of business expenses.
2. Convenient for Employees
Physical cards are often preferred by businesses that need to issue cards to multiple employees for business expenses. They can be used at points of sale (POS) terminals, making them more convenient for employees who don’t always work in a digital environment.
3. Greater Control Over Employee Spending
Physical cards often come with more comprehensive reporting and controls, which allow businesses to monitor and track spending more easily. This is useful for companies that need to manage expense reports and enforce company-wide spending limits.
Limitations of Virtual Cards
- Not Accepted Everywhere: While virtual cards are perfect for online transactions, they may not always be accepted in physical stores, especially in regions where digital payments are not widespread.
- Limited Use for In-Person Purchases: Since they are primarily digital, virtual cards can’t be used at physical points of sale unless linked with a mobile wallet (like Apple Pay or Google Wallet).
Limitations of Physical Cards
- Higher Fees: Physical cards often come with higher fees for issuance, maintenance, and replacement.
- Risk of Fraud: Physical cards can be lost or stolen, potentially exposing the business to fraud or unauthorized transactions if not managed properly.
- Slower Issuance: Unlike virtual cards, physical cards take time to arrive and may require additional steps for activation.
Which One is Best for Your Business?
The choice between virtual and physical cards depends largely on your business needs:
- Choose Virtual Cards if your business deals with a lot of online transactions, subscription services, or short-term projects. They are ideal for startups, tech companies, or businesses that don’t require frequent in-person purchases.
- Choose Physical Cards if your team regularly makes in-person purchases, travels for business, or needs a universally accepted payment method that works in a variety of situations.
Many businesses find that using a combination of both virtual and physical cards offers the best of both worlds—virtual cards for online purchases and physical cards for everyday expenses and travel.