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5 reasons businesses should accept single-use virtual cards

Young woman processing a virtual card payment on a POS terminal

Humans like to stick with what they know and business owners are no different. Many of them still cling on to checks as a primary payment method even though, in their private lives, they have probably moved on to mobile payment apps, allowing them to make instant payments using their phones. In fact, in the first half of 2021 alone, 1.8 billion business checks, amounting to $4.39 trillion, were processed by the Federal Reserve.

Don’t get us wrong, business checks have a lot of good qualities. They’re a familiar, reliable, and well-established payment method. But, and that’s a big BUT, they are also slow, require mail or in-person delivery, and are a nightmare to reconcile. Not to mention that extra trip to the bank and the additional fees it costs to deposit them.

Having to go through a huge pile of checks waiting for reconciliation and processing is never fun and it sure isn’t what you had in mind when you started your business. So, let’s talk about a better way to get paid: single-use virtual cards (SUVCs).

What is a single-use virtual card?

An SUVC is a virtual credit card that is received via email. It has an automatically generated random 16-digit card number that can be processed like any other card-not-present transaction.

It’s important to note that to receive virtual card payments you have to have a POS terminal that can process credit card transactions. This can either be a physical terminal, like the ones you find at the register in a store, or a virtual terminal that lets businesses process online or remote transactions, without the actual card.

How to process single-use virtual cards

To process a virtual card, simply type into your terminal the payment amount, card number, expiration date, and CVC code that appear in the email and proceed as you normally would a phone transaction. If your terminal requires entering a zip code as well, you can find that in the email as well—it’s right below the virtual card.

A virtual card can be used once and only for the exact sum of the relevant invoice, making it a more secure payment option for your customers.

A Melio single-use virtual card issued by JPMorgan Chase
A Melio single-use virtual card issued by JPMorgan Chase

Why single-use virtual cards are good for business

Now that you know what SUVCs are and how they work, here are five good reasons to start using them for your business.

1. Instant confirmation

A check may bounce after you deposit it. A bank transfer may fail after it’s sent due to insufficient funds. But, as soon as you process a single-use virtual card you get instant confirmation that the money is on its way and practically in the bank. That’s because it has already been processed and collected from your customer, so there’s no risk of the payment being rejected at a later stage.

2. Fits your schedule

Sometimes, business owners have to manage their finances during off-hours. Whether you’re inclined to take your invoices with your morning coffee or with a nightcap after the kids go to bed, getting virtual card payments means you’ll be doing it on your own time.

Forget about rushing to the bank to deposit a check before it closes or declining a call from a client because you’re on hold for a clerk to process a payment. When you get an email containing an SUVC you can process it on your POS terminal at any time, including nights, weekends, and holidays. This isn’t to say that we endorse working around the clock—you should always prioritize your wellness and spending time with loved ones—but we do understand that this flexibility can make a huge difference, especially if you’re doing your own finances.

3. Better security

There’s no need to expose your bank details in order to receive payments via single-use virtual cards. The card arrives in your email inbox and you process it securely through your existing POS terminal. Your customers’ payment details are encrypted and kept safe using top-of-the-line digital security measures.

Also, ​​Melio’s SUVCs are Mastercards issued by JPMorgan Chase so you know your money is in good hands.

4. Easier reconciliation

Reconciling incoming payments is a little like following your childhood dream of becoming a detective. But, instead of a magnifying glass and night vision goggles, you now use check stubs and handwritten notes to figure out who done it, meaning, who sent the payment and what for.

While your inner eight-year-old may be giggling with joy, adult-you, who chose a different path as a business owner, is likely less enthused. Reconciliation is a long and frustrating process that is also prone to errors that can cost you.

If you collect your payments via single-use virtual cards, you’ll never be left guessing again. The email you’ll receive will contain all relevant information for easier tracking and reconciliation of every incoming payment.

5. No additional fees

A single-use virtual card payment only costs you whatever processing fees you pay for any other card transaction that goes through your POS terminal. There are no added charges for you or your customers and you each get to keep your existing workflows.

Start accepting SUVCs today

If you’re tired of chasing payments and snooping for information to reconcile them you should really consider single-use virtual cards as an alternative. All you have to do is opt-in to receive all your payments on Melio via SUVC. It’s safer for you and your customers, saves time on reconciliation, and doesn’t cost you anything extra. In other words, it’s a win-win-win.

To start accepting single-use virtual cards, contact our sales team and we’ll get you settled.

Explore even more ways to pay and get paid faster and more securely, sign up to Melio for free today.

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.