There are a lot of misconceptions about virtual cards that prevent companies from adopting and taking advantage of their varied benefits.
Today we'll go over the common myths surrounding virtual cards as well as the evidence that disputes them. Virtual cards are a payment type you can't afford to overlook, lest you miss out on new revenue opportunities, process benefits, and technological advancements.
Let's begin busting these common myths.
Myth 1: It's an All-or-Nothing Virtual Card Adoption Process
One reason your firm may hesitate to adopt virtual cards (v-cards) is the misconception that doing so means converting all your payments to virtual cards. A more realistic outcome is that around 20-25% of overall accounts payable (AP) payments will switch to virtual card payments. We consider this a successful adoption rate, and the rebates from this will quickly add up.
Today, approximately 30% of companies are incorporating virtual cards into their payments strategy. We expect this number to go up as more companies invest in no-touch payment methods.
According to a PYMNTS study, as of 2020, virtual cards are the fastest-growing B2B payment type. Even outpacing more familiar methods such as ACH and purchasing cards.
This rising trend towards virtual cards is due to the benefits they bring and the ease of their use. Don't miss out because you think you have to convert all your payments to v-cards in order to benefit! If you adjust even a quarter of your accounts payable (AP) payments to leverage virtual cards — you will reap the benefits.
Myth 2: Virtual Card Payments Result in Increased Costs
There's a common belief that virtual card companies will have service charges that go hand-in-hand with their use. In reality, the opposite is true. Digital payments, in general, reduce costs, and virtual cards, in particular, open up additional revenue streams.
First, let's look at how eliminating paper and adopting ePayments would really affect your bottom line.
Per a 2020 study, reducing paper processes and replacing them with digital process saves U.S. businesses $150 billion annually. Going one step further, large-scale adoption of ePayments could collectively save businesses more than $150 billion a year. These numbers are hard to argue with.
Second, let's talk about virtual cards. They earn cashback and empower your AP team to issue payments at no cost.
Here at OnPay Solutions, our solution enables you to turn spending into profit with up to 1% cashback on AP spend via monthly rebates. Interested in learning more about virtual cards and how cashback work? Check out our best practices AP guide today.
Myth 3: Suppliers/Vendors Won't Want to Process Them
Not every vendor or supplier will be interested in accepting virtual cards, this is true. But a larger selection of them than you may think either already do from other partners or will go far to please their clients by adopting them.
According to recent research, over 30% of suppliers already prefer v-card payments over all other methods. This corresponds with the 30% of companies that reported they are incorporating virtual cards into their payment strategies. Vendors are matching that trend at an equal rate.
Many CFOs underestimate how far a vendor will go to keep their clients happy, and virtual cards are an easy sell in today's increasingly touchless business environment. Another enticement for suppliers is that virtual card payments bring with them the potential for early payments and the ability to access remittance data in a vendor portal you will both have access to.
Our vendor portal:
- Allows 24/7 remote access
- Was designed with suppliers/vendors in mind
- Enables transparent status updates and tracking
It pays to keep up a positive relationship with your vendors, and virtual cards are a good way to do that. They benefit both sides of the relationship.
Myth 4: There Are Better Ways to Make Touchless Payments
There's no question that touchless processes and no-touch payments are on the mind of every CFO. What is in question — is which payment method is the best choice?
For many, virtual cards are not the answer their mind jumps to. This is a mistake, virtual cards come with a lot of advantages and are the ideal payment type for the future success of your AP department.
Virtual cards are among the top no-touch payment methods and making the change is crucial for finance departments to survive the volatile future of our work environments. A Harvard study early in 2020, predicted that COVID-19 could potentially keep people at home periodically through 2022.
Business continuity and adaptability are key to ensuring your company will continue to thrive in the future. Virtual cards are not just easy to approve from home or from the office, they open a new revenue stream to recoup the losses you may have suffered due to Covid-19.
It's never been easier to take your accounts payable department to the next level. Take advantage of virtual cards today and ensure you stay ahead of your competition.
Open up an additional revenue stream and be the hero of your finance department team — current technology and the right payment partner make the process quick and non-disruptive.
This is a syndicated post courtesy of our partners at OnPay Solutions.