Millennials are disrupters. We change the way businesses run by building sustainable, fulfilling, and environmentally friendly companies. According to BNP Paribus Global’s 2016 Entrepreneurship Report, millennial entrepreneurs found 2.2 times as many businesses as their baby boomer forefathers. In 2014, Millennials created almost 160,000 startups and made up one-third of all self-described entrepreneurs in the United States. According to the Harvard Business Review article, What Do Millennials Want at Work? by Bruce M. Pfau, Millennial business owners have shaken up traditional ways of doing business in order to maximize performance. Maximizing performance comes in many forms, including adding yoga studios to the office and perks like Segways, but one of the more significant millennial upgrades is virtual cards.
Business men and women aged 20 to 35 work in a world of gray-scale hierarchies and ethereal technology. Instead of fighting our way to the corner office, we’d rather build it. 67 percent of people born between 1982 and 2004 report wanting to own their own business. Instead of the microwave or latest pager shaking up our lives, we expect technology to achieve instant results for a myriad of tasks, not only for sustenance and connection. Our mentality, combined with the early 2000s tech boom has bred a peer-to-peer, on-demand economy as well as the rise of community through social media. The shift towards connectivity through tech has led to the virtualization of everything from holiday cards to dating, which in the business world, translates to a shift from analog programs to technology-assisted services.
Virtual cards are shaking up the payments industry. Just as your phone’s built-in contact list has replaced your old Rolodex, virtual cards replace checks and paper bills. They’re the new payment standard of entrepreneurs, CEOs and finance gurus everywhere. They’re the newest way to make secure, user-friendly business transactions.
Businesses have used invoices and checks to pay for regular expenses for years. The American Fraud Prevention Electronic Payments survey reported in 2016 that 51% of businesses use checks to make commercial payments. Aside from being inconvenient, checks incur more fraud than other payment forms. The National Check Fraud Center estimates over $10 billion in business revenue losses due to check fraud each year in the US; that figure is expected to increase by 2.5% in coming years.
Fortunately, fintech busted Catch Me If You Can style check fraud, and now business owners can make secure payments using virtual cards. By implementing the new virtual payment style, business owners could effectively wipe out that hefty $10 billion annual loss from fraud and regain control of their budgets.
Virtual cards eliminate fraud and inconvenience by being one-time-use and disposable. Checks are kind of like waiting weeks to develop camera film, but virtual cards are spending’s Snapchat. Spenders issue randomly generated virtual card numbers linked to their actual card, allowing them to spend money in their account without giving out a physical card number. Users also can set a maximum charge limit on the randomly-generated, virtual card number. This means online vendors or thieves could never max out your credit limit because the spending limit on the virtually-generated card number maxes at the limit you set.
[pullquote]Online merchants won’t know the difference between physical cards and virtual cards (that is unless they try to treat themselves to a Hawaiian vacation at your expense and it backfires).[/pullquote] Also, like Snapchat, the virtual card number disappears when you want it to–ideal for one-time-use. However, spenders can arrange for recurring payments (much like how you can watch a 24-hour Snapchat story as many times as you want). Additionally, online merchants can use virtual card numbers to charge you for your purchases, but the automatic deactivation feature of these cards guarantees the spender’s safety from fraudulent piña colada charges. The unique account numbers from virtual cards deactivate after use–meaning no more fraudulent charges and no more double charges. Tis evidently means no more headaches and no more worries.
Today, automated payments such as Venmo and one-click checkout on Amazon simplify consumer spending. The days of mapping out a careful budget have flown out the window; we live in a time when sending money across countries can happen instantly and impulsively. When making online purchases, filling out a card number, security number, personal information and billing address give the customer more opportunities to second guess before deciding to make a purchase. One-click shopping, on the other hand, makes driving online sales easier for businesses as the process evolves from feeling less like spending your hard-earned dollars, and more closely resembles liking a friend’s status update on Facebook. Consumers spend more money when they don’t have to click as much or fill in so many information boxes.
For business owners, optimized online shopping paves an expensive route to more systems, subscriptions, and recurring costs. These costs make it more difficult for business owners to clearly see where their funds are being spent. Funds start to flow out of the monthly budget in a small, often unnoticed stream as businesses spread automatic payments across various sites with multiple forms of payment. But like a leaking roof, the seemingly small annoyance can eventually sink businesses as small monthly fees add up.
Virtual cards patch up that leaky roof by prohibiting automatic payments that fall outside parameters you set. When spenders put a maximum charge limit on virtual cards, vendors cannot use the card number to charge you after the transaction reaches the spend limit. Owners of the cards can also set the card as one-time-use, meaning the vendor can never replicate the randomly issued virtual card number for other purchases. These parameters drown the possibility of draining your funds, thanks to the fact that no funds (outside of what you have designated beforehand) are available to drain.
Virtual cards make canceling at any time a reality–no more automatic, monthly charges to the gym no one on your team uses. Virtual cards, paired with a budget and expense budgeting app, allow you to cancel the form of payment directly, without going to individual websites to manage subscriptions.
More vile than recurring monthly payments, the possibility of getting hacked shatters that comfortable feeling of security for consumers and business owners alike. of consumers and business owners alike. The many data breaches in the recent past make tech security more important than ever. Many assume that entering information online is synonymous with decreasing you cyber security. However, virtual cards deliver an untappable line between merchants and consumers. Virtual cards eliminate the possibility of card-not-present fraud. If your Amazon (or Forbes, or TurboTax, or whatever services make your life easier) account ever gets hacked, hackers can’t use the information they find, because the cards only work to make purchases of a pre-specified allotment.
The world’s first virtual card was issued in Singapore ten years ago and had a limit of $18.60. Technology has evolved this largely theoretical mock-up version of a virtual card into a product that is widely available. Banks issue virtual cards for consumers to use on anything from their premium Skype subscription to the company pizza order. In order to seamlessly link your spending on virtual cards and your physical card, it’s best to use a free service such as Divvy which issues virtual cards and allows users to track their use of virtual cards in an app.
Uncertainty, fraud, and hidden charges combined make a trifecta of budget-busting problems for Millennial business owners. The solution: virtual cards translate to a seamless exchange of funds and provide increased control, convenience, and security in business. Virtual cards end millennial nightmares of uncertainty and lack of control. Goodbye hidden fees, transactions, and fraud–hello seamless control of spending. #success.
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