Virtual Cards: A Golden Opportunity to Re-Engineer Your Procurement Processes

This week, the Institute of Commercial Payments brought me and hundreds of commercial card and procurement professionals under the sun of Scottsdale. It was my second time attending, and once again, a very fruitful experience.

I’ve attended many conferences over the years. But this one is different.

What makes it different is the role attendees play in their organizations, their tenure, and their openness. People know each other. Conversations go deeper. And in my second year, I now feel part of that community.

I came this year with a very specific intent: to better understand how Government, Higher Education, and Corporates are adopting virtual cards.

And what I learned genuinely surprised me.

Virtual cards have not replaced physical cards

The first insight is simple, but important.

Organizations are not using virtual cards as a replacement for existing payment methods. Very few organizations have replaced physical cards with virtual cards for tap to pay.

There are two practical reasons for that are typically mentioned.

The first reason is that some operate “one card” programs that combine P-Cards and T&E cards. In these environments, the card has to be accepted everywhere. Virtual card acceptance however remains inconsistent in certain hotel chains.

The second is policy related. Security policies in certain organizations require the use of a company-issued mobile device to enable virtual card usage with tap to pay. But the device is not always provided to employees.

So physical cards have remained.

The SUA Trap: Virtual Cards as Invoice Payment Tools

The second insight is more structural.

Even fewer organizations have reengineered their procure-to-pay processes to take full advantage of virtual cards. Instead, many are using virtual cards, often referred to as SUA (Single Use Accounts), to pay invoices sent by suppliers.

On paper, this sounds like progress. In reality, results are mixed. Why? Because the underlying process has not changed.

The organization still receives an invoice, processes it through Accounts Payable and now uses a virtual card instead of ACH or check to settle it.

From a supplier perspective, the value proposition is weak. Why would a supplier accept card fees if they are not being paid faster, nor benefiting from a better buying experience? The response is predictable: “Just send an ACH.”

This is how virtual cards end up with a mixed reputation in supplier payments—not because of the technology itself, but because of how it is being used.

A Structural Disconnect Inside Organizations

What this reveals is a deeper issue. There is still a disconnect between Accounts Payable, Card Program Managers and Procurement.

Each group is optimizing for its own objectives:

• AP focuses on invoice processing and payment efficiency.

• Card Program Managers focus on card issuance and management.

• Procurement focuses on negotiated savings and supplier management.

The head of Finance Services at a large US Public University was himself complaining that payment methods and payment terms is second or third priority for procurement making card usage a real issue and generating fees charged back by suppliers when SUA are issued for payment.

Without alignment, they get confined to incremental use cases, like invoice payments, rather than unlocking their full potential.

Where the Real Opportunity Lies

Replacing plastic cards to virtual cards is a first step every card program managers should be considering. It streamlines card requests, card issuance and management as well as expense reconciliation. It also provides an added level of security that plastic cards do not offer. And on top it is very good for the environment.

But the real opportunity is in rethinking the procure-to-pay process itself.

Today, invoice-based processes still dominate a large portion of spend—especially for online purchases and tail spend. This is where virtual cards can fundamentally change the model.

Instead of:

• Request → Approval → Purchase → Invoice → Payment

You can move to:

• Request → Approval → Payment → Purchase

And even collapse everything into a single event at checkout.

By issuing a pre-approved virtual card at the point of purchase, organizations can:

• Eliminate invoice processing entirely for many transactions

• Embed controls before the spend happens (not just after)

• Capture data and receipts in real time at authorization

• Speed up reconciliation and accounting

• Improve user experience dramatically

This is not an incremental improvement. It is a structural shift.

Productivity and Rebates: A Step Change

When organizations make this shift, the benefits compound quickly.

First, productivity gains are significant. You are not just optimizing AP. You are removing entire steps from the process.

Second, P-Card usage expands meaningfully. More transactions move from invoice-based payments to card-based payments.

And with that comes a financial impact that is often underestimated. Rebates are no longer marginal. They can multiply. In some cases, organizations can see a 10x increase in rebate-generating spend simply by shifting how purchases are made, not by negotiating better rates, but by changing the payment rail.

When embedded at check out suppliers find true value and are being paid way faster than they would ever been through AP. In fact the payment takes place way before the products gets shipped offering yet another opportunity to negotiate pricing with suppliers.

The Winners Will Rethink the Process

The takeaway from this year is clear.

Virtual cards, on their own, do not transform anything. Adding new technology—whether it’s virtual cards or AI—on top of existing processes will only deliver incremental benefits. The real value comes from reengineering the process itself.

The organizations that will win are not the ones that adopt virtual cards. They are the ones that rethink how buying and paying should work in a digital world.

Closing Thought

Virtual cards have the potential to do much more than replace plastic or digitize payments. They can redefine how organizations buy. But that requires a shift in mindset from optimizing existing processes to redesigning them entirely.

And that shift is only just beginning.