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Evolution of Commercial Payments: Insights on Virtual Card Numbers (VCNs) with Discover® Global Network

Digitalisation is reshaping the landscape of commerce for both consumer and business payments and prompting an increased focused on innovation, security and finance. At the forefront of this dialogue are virtual card numbers (VCNs), a digital- only form of payment that are gaining prominence for their ability to offer enhanced security, real-time transaction capabilities, precise data quality and simplified reconciliation.  

To gain deeper insights into the evolution of commercial payments in 2024, including the pivotal role of VCNs, we chatted with Marcos Gelfi, head of global commercial products and cardholder services at Discover® Global Network and a payments veteran, with more than 27 years of experience in the industry.

Here he shares his five insights so far for 2024.

Marcos Gelfi, head of global commercial products and cardholder services at Discover® Global Network
Marcos Gelfi, head of global commercial products and cardholder services at Discover® Global Network
1. VCNs are set to become more widespread

Virtual card numbers have been on the commercial payment landscape for the past seven to nine years, steadily gaining momentum. In 2024, we anticipate a significant surge in their adoption across various payment sectors within commercial payments.

This includes Travel, B2B and Small Medium Enterprise (SME). What was once considered a niche solution is now set to become mainstream for businesses globally.

This growth is propelled by VCNs’ versatility, offering secure and efficient payment alternatives for an array of use cases.

Corporations, whether big or small, need to handle payments, be it for travel-related expenses or B2B transactions, even mundane office supplies. Traditionally, physical cards were used and distributed to employees.  Then, card-on-file for online transactions surged in popularity. This convenience, especially in the travel space, enabled transactions for remote activities, such as purchasing airline tickets and hotel reservations.  Companies embraced card on file due to visibility to expenses and opportunities to negotiate with preferred suppliers while employees cheered for centralised expenses reducing the burden of producing expense reports.

Companies often use a travel account for booking business travel. And while the travel account offers a single channel to manage bookings, supporting travel policy, visibility into spend with suppliers, and simplification for the employee in expense report management, the central account can become challenging to reconcile transactions accurately. Corporations must match the incurred expenses against a single account. VCNs solve this problem by providing a tokenised number per transaction, ensuring 100 per cent reconciliation, policy management with enabled spend controls, and robust fraud prevention.

In essence, VCNs, when partnered with a legacy payment solution like a travel account or a purchasing card, layer additional security, data quality, and control assisting to check all the boxes to support streamlined and simplified payments for corporations.

2. There will be more diverse use cases for VCNs

Although it took some time for adoption to accelerate, digitalisation, especially in a post-Covid world, is driving increased demand for VCNs across various industries.

While VCNs have been historically used to support business travel, they are fast becoming a capability that can be used in alternative scenarios, including procurement payments, recurring expenses and utility bills.  As more corporations are managing hybrid offices and employees, and oversite to those expenses become even more critical, VCNs offer an effective means to manage their finances, ensuring policy compliance and controlling budgets.

The beauty of VCNs lies in their ability to provide transaction data that can be leveraged for data analytics, helping businesses make informed decisions and negotiate better deals with suppliers.

3. VCNs are transitioning to real-time data integration

Over time, we’ve witnessed a significant shift in data handling for businesses. Previously, data was processed in batches, often after the fact, which lacked the urgency needed in today’s fast-paced landscape. However, the paradigm is changing. Real-time data is becoming the norm, offering corporations the ability to access, customise, and analyse the information instantly.

This shift enables corporations to make more informed decisions, strike better deals, and effectively manage their expenses. You can expect to see the integration of real-time data analytics becoming increasingly prevalent in payment solutions, enhancing user experiences and decision-making processes.

4. Security and user experience remain top priorities for businesses

As we move forward, security and user experience will continue to be paramount in the payments industry. For businesses to remain competitive, they must have the confidence that their payment solutions are PCI compliant;  prioritisation of data security is non-negotiable.

At Discover Global Network, we place substantial emphasis on investing in security measures to protect payment information. Additionally, as many large corporations tackle antiquated, complex payment platforms, simplicity and user friendliness will remain top priorities as we evolve our products. We aim to make digital payment solutions as accessible and secure as possible, ensuring a seamless transition for all users.

5. Expect to see increased educational efforts around VCN from industry experts

In recent research conducted by DGN, we learned that 27 per cent of large corporations and 12 per cent of small medium enterprises are currently using VCNs to manage their business expense.  VCNs are forecasted to more than double in usage by 2026.

research conducted by DGN

While VCNs have been gradually gaining traction, we foresee a significant acceleration in their adoption, not only for business travel and procurement, but also managing expenses of remote hybrid employees in the coming years. Our industry is becoming increasingly aware of the advantages offered by VCNs, such as enhanced security, improved data quality, and better financial control.

To facilitate this adoption, educational initiatives will play a pivotal role. That’s why, at Discover Global Network, we’re spending time to educate the industry and supporting our partners to upgrade to a better use case and a more secure solution that ultimately will drive additional volume. This, in turn, will be much better for the users from a security and budget control perspective.

Discover Global Network

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