Business credit cards are a regular part of the payment process for many companies. You can choose a physical card or a virtual business credit card. Both are used for business expenses, but the way you set up and manage payments differs. ICS offers both solutions and helps organisations find the right fit for their payment process. In this article, we explain the differences and when to choose each.
A virtual business credit card is a digital Card number with an expiry date and a CVC code. You create the Card number for a specific payment, period or project. You set conditions in advance, such as:
All payments made with a virtual business credit card land in one central Card account for your organisation.
Let’s say your IT department orders a laptop from an online supplier. You now arrange the payment through a virtual business credit card, so an employee no longer needs to pay out of pocket or use a manager’s physical credit card.
You create a separate Card number with conditions set in advance, for example:
This way, the payment is capped and clearly defined in advance.
A physical business credit card is issued in an employee’s name. You use it for recurring or varied business expenses, such as hotel stays, flights, taxis or entertainment costs.
The employee pays within the agreed limit at suppliers that accept credit cards. Your organisation’s internal process determines how you process these expenses afterwards.
The difference lies mainly in how you set up and manage payments. For example, there are different usages and ways of controlling and processing these credit cards.
A physical credit card is issued in an employee's name and suits a range of expenses within the agreed limit, such as hotel stays, taxis, meals and parking. The credit card is meant for ongoing use.
You create a virtual business credit card per payment or purpose, for example:
Want to know more about the uses of virtual business credit cards? Read our article on the practical applications.
With a physical credit card, an employee pays within the set limit at any supplier that accepts credit cards. That offers flexibility, but it also means more risk of misuse.
With a virtual business credit card, you define how it is used in advance. You set:
This prevents a payment from falling outside the agreed limits, which matters most for online purchases, suppliers without a fixed contract and project-based expenses.
With both physical and virtual credit cards, you see transactions in your provider’s online portal.
With a virtual business credit card, you add extra information as soon as you create it, such as a cost centre, project number or internal reference. This information is linked to every payment you make with the virtual credit card, so you record in advance which department or project the cost belongs to.
Is your credit card provider integrated with your accounting system, ERP or expense management system? If so, that integration sends all virtual credit card transactions automatically too. No integration in place? Then the details stay attached to the transaction and you process it manually. Either way, this saves the finance team time spent chasing information, because everything they need is already attached to the payment.
With a physical credit card, you set it up once through your credit card programme. After that, the employee uses the credit card independently.
With a virtual business credit card, an employee requests a new card for each payment, before the purchase or payment takes place. Depending on your organisation’s settings, the credit card may be available immediately, or the request may first go to someone who approves it. This keeps you in control of spending that falls outside the standard procurement process.
As a finance manager, ask yourself a few practical questions:
For many companies, physical and virtual credit cards complement each other. You use physical credit cards for employees who travel regularly and have varied expenses. You use virtual business credit cards for payments that fall outside your standard procurement process and that you want to define in advance by amount, period or supplier.
Still deciding? Read our article on the benefits of virtual business credit cards.
ICS offers both physical business credit cards and virtual credit cards. At ICS, virtual credit cards are called Virtual Cards and are part of ICS Payment Control.
If you choose Virtual Cards, your organisation gets a Virtual Card Account, where all virtual transactions land. From the Smart Data Portal, you create Virtual Cards for specific payments.
Through the Smart Data Portal, you manage who can create Virtual Cards, decide who approves requests and decide which conditions apply. You set limits, validity and supplier restrictions. Want to share Card details directly with the supplier who will ultimately receive the invoice? The portal sends the Card details to the supplier’s email address through a secure connection.
Want to process transactions automatically in your accounting, ERP or expense management system? Request Mastercard Smart Data Connect to set up the connection. Mastercard Smart Data Connect then automatically sends all your transactions and credit card data to your chosen system, where you can arrange further automation yourself. This eliminates manual work and keeps your bookkeeping in order.
Want to know more about Virtual Cards from ICS? Feel free to get in touch (link in Dutch).
We have put together the answers to the questions we hear most often. Don’t see your question listed? Get in touch (link in Dutch). We’re happy to help.
