Many businesses are leveraging ghost cards to simplify payments, reduce fraud risk, and streamline expense management. But what exactly is a ghost card, how does it work, and how can you determine if your business needs one? Read on for all the details.
What Is a Ghost Card?
A ghost card, sometimes called a virtual credit card (VCC) or tokenized card, is a digital version of a credit or debit card. Ghost cards are generated electronically and exist in digital form. The term “ghost” refers to the fact that these are not typical tangible credit cards.
Ghost cards are usually tied to a specific bank account and can be used for online or recurring transactions. Businesses often use these cards to handle specific types of payments, such as supplier invoices, subscriptions, or employee purchases. Some businesses use ghost cards for spend management, setting budget limits for projects. Others assign a unique ghost card number for different projects to help with reconciliation and expense allocation.
How Does a Ghost Card Work?
Ghost cards operate like any traditional credit or debit card but with added layers of control and security. Each ghost card has a unique 16-digit card number, expiration date, and card verification value (CVV). In some cases, businesses can choose the ghost card’s expiration date to help ensure spending occurs only during a specific project timeline.
Financial institutions and payment providers issue ghost cards. Once you’ve selected a provider, you can tailor your ghost cards to specific purposes, such as assigning them to a department, project, or vendor.
Ghost cards are linked to your business’s primary account but each can have a custom spending limit and usage restrictions. Transactions are automatically logged to your account and organized by ghost card number, which simplifies the process of tracking project spending and reconciling accounts.
These virtual cards can only be used for online purchases, automated bill payments, or transactions with approved vendors. Since there is no physical card, you cannot use a ghost card to pay for dinner in a restaurant, for example.
Benefits of Ghost Cards for Businesses
Ghost cards offer a range of advantages that make them useful for certain business scenarios.
Enhanced Security
Ghost cards reduce the risk of fraud by limiting exposure to sensitive account details. Each card is tied to a specific purpose, and its usage can be monitored in real time. If a ghost card is compromised, it can be quickly deactivated without affecting other accounts or cards.
Additionally, since there is no tangible card, there’s no risk of physical theft or loss like with a tangible card.
Improved Expense Management
By issuing ghost cards for different departments or projects, businesses can more easily track and categorize spending. Plus, ghost cards eliminate the need for sharing account details across teams, helping reduce errors and unauthorized charges.
Streamlined Payments
Ghost cards can simplify supplier payments by assigning a dedicated card for each vendor, supporting clear and accurate reconciliation. Ghost cards are also helpful for recurring expenses like software subscriptions or utility bills, as businesses can set usage limits and expiration dates.
Cost Savings
By using ghost cards, businesses can reduce the administrative costs associated with processing paper checks or manually reconciling accounts. Ghost cards may also involve lower transaction fees compared to traditional payment methods.
Scalability
Ghost cards are highly scalable, making them a good choice for growing businesses. You can issue new cards as needed without the logistical challenges of handling physical cards.
Oversight
For employees handling temporary tasks, such as travel or event coordination, a temporary ghost card ensures that spending is limited to the duration of the assignment. Managers can monitor and close employee-related cards once their purpose has been fulfilled, promoting tighter controls.
How to Know if Your Business Needs a Ghost Card
Not every company requires ghost cards, but they can be helpful in businesses that handle high volumes of payments or that deal with multiple client accounts. Following are some signs that your company might benefit from adopting ghost cards.
Regular Payments
If your business regularly pays multiple suppliers and has many recurring payments, ghost cards can simplify the process and improve spend management.
Security
Businesses concerned about payment fraud can benefit from the added security of ghost cards, including features like limited use and easy deactivation.
Decentralized Spending
Companies with multiple departments or remote teams often struggle with expense management. Ghost cards provide a solution by assigning specific cards to each team or project.
Financial Transparency
If your business requires detailed expense reporting and clear visibility into spending patterns, ghost cards are a viable tool.
Digital Payments
Ghost cards provide a solution for businesses moving away from manual, paper-based accounts payable (AP) processes.
Sample Use Cases for Ghost Cards
Following are just a few of many business use cases where ghost cards provide value:
Streamlining AP: You can use ghost cards to pay vendors more quickly and securely than traditional payment methods like paper checks.
Recurring payments: Assign a ghost card to subscription services such as software, cloud hosting, or marketing tools. You can set spending limits and expiration dates to avoid unwanted charges.
Vendor trial periods: Use a ghost card with a short-term expiration date to ensure you’re not automatically charged when a trial period ends.
Employee expense management: Issue ghost cards for employees to cover travel expenses, event registrations, or client entertainment without the hassle of ordering and issuing physical cards.
Digital ad buys: Use virtual cards to pay for Google Ads, Facebook campaigns, or other digital advertising platforms. The controlled spending reduces the risk of going over budget and helps break down spending by campaign.
Project-specific budgets: Assign a card to a campaign, event, or project to more easily track and reconcile costs and stay on budget.
Secure online payments: Make payments through online marketplaces with a ghost card without exposing your primary account.
Mitigating card sharing risks: Instead of sharing a physical card among employees or departments, generate virtual cards for specific users or purposes.
How to Start Using Ghost Cards in Your Business
If you’ve decided that ghost cards are the right fit for your business, here’s how to get started:
1. Define Your Needs
Identify the use cases for ghost cards in your business. Will they be used for supplier payments, employee expenses, or recurring subscriptions? Do you need to more clearly delineate spending by client or project team? This will help you choose the best provider for your needs.
2. Select a Ghost Card Provider
Research financial institutions or payment platforms that offer ghost card services. Consider factors like cost, ease of use, and integration with your existing financial systems.
3. Set Controls
Establish spending limits, usage restrictions, and expiration dates for each ghost card. This ensures that your cards are used responsibly and within budget.
4. Train Your Team
Educate employees on how to use ghost cards and the benefits they bring to the organization. Ensure everyone understands the importance of adhering to spending policies.
5. Monitor and Adjust
Regularly review transaction data to identify trends, spot anomalies, and optimize your spending strategies. Consider new ways to streamline AP work with ghost cards.
Final Thoughts on Ghost Cards
Ghost cards can revolutionize your business’s payment processes by enhancing security and improving expense management. Whether you need better control over spending, a scalable payment solution, or a more secure way to handle transactions, ghost cards offer valuable benefits.
Explore how virtual credit cards can fit into your financial strategy by consulting with a payment expert today.