FIS Modern Banking Platform
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Kris Carrera | VP, Credit Payments
January 04, 2021
Stay-at-home measures and social distancing practices brought on by the COVID-19 pandemic have accelerated the digitization of payments. In the commercial space, virtual cards have emerged as an appealing alternative to their physical counterparts.
For financial institutions, a commercial card program is already a valuable source of revenue. With use cases for virtual cards expanding across various industries, adding a virtual component to your institution’s commercial card offering increases the program’s value for all your business customers.
From vendor payments to employee expense management, commercial card solutions help businesses streamline procurement and payment processes. The commercial card market is growing steadily, encompassing a variety of offerings including corporate, fleet, travel and expense, purchasing, accounts payable and more. Industry consulting firm Accenture forecasts the commercial card market to grow 10 percent annually through 2022.
Several factors are driving growth in commercial card spend, including:
As the pandemic has accelerated the demand for digital transactions, commercial enterprises are exploring their options to meet payment expectations among employees and vendors – and looking to their financial institution for solutions. Businesses want more efficient ways to make, receive and process payments that reduce or eliminate the use of checks while limiting risk. Virtual cards are the answer.
Like physical commercial cards, virtual commercial cards can be assigned a credit limit or designated for one-time use. Whether for employee expenses or payables, virtual cards can apply to various functions within an organization. Using an email link to a secure portal, virtual cards allow businesses to more quickly and securely remit payment.
Virtual cards offer several benefits financial institutions can leverage to differentiate their commercial card offering, including:
Convenience. Faster, easier access to funds increases operational efficiencies.
Security. Fraud controls help mitigate the risk of stolen data and funds.
Reduced costs. Automating the manual processes associated with checks helps lower costs.
Revenue opportunities. Institutions receive rebates on virtual card payments they can keep or pass on to their customers.
Customer acquisition and retention. A virtual card offering increases customer stickiness by adding value to a traditional commercial card program.
With the variety of virtual card products available, financial institutions should seek versatile solutions that allow for customization with the ability to:
Implementing a virtual card solution as part of a commercial card offering is crucial for financial institutions to stay competitive in an increasingly digitally-driven marketplace. FIS® offers a variety of virtual card offerings to help your institution meet customer demand and keep your card top-of-wallet. Reach out to us to learn more.
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