A virtual card payment can be made without swiping physical cards. In order to make a payment, the virtual card company/processor of the payer will generally print a 16-digit number for the card and a CVC, expiration date, payment amount and the Explanation of Payment (EOP) advice that will explain the specific type of services that the payment covers with a provider. Each provider can process the payment by keying in the virtual card information/details into their merchant card POS terminals. A provider will generally be charged some processing fee for the transaction, the fee would have been negotiated and pre-agreed by each provider and their merchant processors.
Some virtual card benefits include faster payments, no deposit procedure to follow in order to clear paper checks, and immediate fund transfer that is similar to a typically credit card transaction.
Providers’ Readiness To Accept Virtual Cards’ Payments
For a provider, a virtual card payment is an effective and low risk payment solution. Each provider however may still get/receive some of their reimbursements with paper check or through direct deposit (ACH) if they want.
Card payments generally provide some significant opportunities that can be put to some good use since more than ninety-five percent of providers accept them. Unlike the 10% adoption level for ACH, providers’ adoption range for debt/credit cards are from 50 to 70%. Some of the reasons for this is the fact that the cards are easy to reconcile and payments through them are generally fast, the cards also have some level of protection from fraud too and payments from them are more reliable than those that are made through the mail.
The Advantages Of Receiving Payments With Virtual Cards
- Virtual cards generally make receiving electronic payments simpler
- They also eliminate the cost of paper check claims payments
- They eliminate the risk and possibility of losing a check or check theft
- Card transaction processes are familiar enough for most providers to follow
- Such payments are also an economical processing method since their merchant fees on the average are relatively low and are also within credit cards payment range of charges/fees
- They can also aid cash in flow since the payments are made immediately, virtually