What is a ghost card?
A ghost card can function like a credit card or a debit card depending on your preference. It is a one time use card that has the ability to expire when you tell it to. These cards also have robust expense management controls baked in.
Businesses must spend money to keep their companies operating. Traditionally, the payments made by companies were made by issuing commercial checks. Employees would have to submit requisition forms and then wait for their requests to be approved. The companies would then issue purchase orders and draft commercial checks to pay the invoices that they received.
Today, more businesses are turning away from commercial checks in favor of noncash payment methods. According to the 2017 Federal Reserve Payments Study, the number of commercial check transactions from 2015 to 2016 fell by 3.6 billion, and the value of the transactions paid for by commercial checks fell by $3.7 trillion.
One noncash payment solution that businesses are choosing is a ghost credit or debit card. A ghost debit or credit card is a randomly generated credit card number and CVV that can be used to complete a single transaction. Businesses may assign them to individual departments for better expense tracking and control. If you are wondering “what is a ghost card?” the information below can provide some illumination.
How does a ghost card work?
To understand what is a ghost card, understanding that ghost debit or credit cards are not plastic is a good start. Random credit card numbers are generated together with CVV codes. The cards may be used vertically or horizontally by companies. When they are used vertically, the ghost numbers might be assigned to specific vendors to reduce invoicing costs.
Ghost virtual cards may also be assigned to departments within an organization. The employees may use the cards to make purchases within their departments, and the purchases are charged back to the departments. This makes spending more transparent as compared to reimbursem*nts and other payment forms.
The problem with traditional payment methods
Traditional payment methods for businesses include purchase requests and orders, checks, invoices and reimbursem*nts. These systems involve significant soft costs in the time it takes to process the requests and to issue checks, reimbursem*nts, and purchase orders.
The transaction costs for purchases using traditional payment methods are the same regardless of the value of the transactions. For example, if a business needs to buy a yellow legal pad at a business supply store, a requisition form must be completed and then processed by the accounts payable department before the purchase can be approved.
In situations involving low-value transactions such as this, the costs associated with approving the transaction may be higher than the value of the item that is purchased. Traditional payment methods are also frequent targets of fraud.
Ghost cards vs. virtual cards
Virtual cards are credit card numbers that are randomly generated and can be used to make purchases. The numbers are linked to an original credit or debit card, and the purchases are charged to the original card. However, other people cannot use the virtual card numbers to access the original credit or debit card.
Ghost debit cards are similar to virtual credit or debit cards because they are also randomly generated credit card numbers. When they are used horizontally, the numbers may be issued to individual departments, and the purchases may be deducted from a single high-balance account.
Ghost cards vs. procurement cards
Procurement cards are credit or debit cards that employers give to a specific group of employees. The employees are then able to use their cards to make purchases for their companies without having to spend their own money and wait to be reimbursed.
Ghost credit or debit cards are randomly generated numbers that are assigned to individual departments. Employees who work in those departments are able to use the ghost numbers to make purchases, which are then charged to the departments.
How do ghost cards differ from standard business credit cards?
Ghost credit cards differ from standard business credit cards in several important ways. With ghost credit or debit cards, you can limit the cards to making purchases from specific vendors, and the card numbers can’t be used by thieves to run up charges on the card.
Standard business credit cards are plastic cards that employees might use to make purchases for the businesses. If the numbers are stolen, then thieves can run up charges on the cards. Businesses are also unable to limit where their employees might use the credit cards, increasing their risks of internal fraud.
How many times can a ghost card be used?
Ghost debit cards can be used once and then will no longer work. This feature is to help to reduce the risk of fraud. If a thief manages to steal the number when a purchase is made, the number won’t work and will be useless.
Businesses can also choose to set an expiration date for the ghost numbers that they issue. Employees can then make purchases using the ghost numbers until the expiration date arrives. Alternatively, vendors that receive ghost numbers to use can charge purchases to them for the companies until they expire.
How do you use a ghost card?
Ghost debit or credit cards may be used online to make purchases. They can also be used to make purchases from suppliers and vendors by telling them the numbers. The purchases will then be charged to the originating departments and subtracted from the company’s account or added to its credit card balance.
Ghost numbers may be used to make purchases at any vendor, supplier, or retailer that accepts credit and debit card payments. The merchant codes on the cards can be restricted so that they can only be used to pay specific vendors.
What do ghost card payments do?
When a purchase is made using a ghost card, the purchases are charged back to the departments that are assigned the card numbers. This helps companies to track their expenses by each department and to assign different purchasing and expense responsibilities to different departments.
Ghost card payments make it easier for companies to be immediately aware of their expenses. By contrast, reimbursem*nt requests from employees are sometimes not submitted to the accounts payable departments of companies for weeks or months. Ghost cards can also be assigned to specific vendors who can then simply charge the purchases made by the business to the cards so that paperwork that would normally be associated with each individual purchase can be avoided.
Where can I get a ghost card?
Now that you understand the benefits of ghost virtual cards, you might wonder, “Where can I get a ghost card?” You can obtain ghost debit or credit cards from your card issuer.
Some companies provide software that you can install on your computer. The software can then be used by you to instantly generate the random card numbers that will be linked to your credit or debit account. Ghost accounts are scalable and allow you to generate as many or as few numbers that you need. To find a good company, you can conduct research online and read reviews.
Set spending limitations
One key benefit of using ghost virtual cards for payments is that you can set spending limits on each of the cards that you generate. For example, you might give a number to one department a balance of $2,500 while another that has to make more purchases might receive one that has a balance of $4,000.
The cards can be limited to spending certain amounts on specific days, and they can be limited to where they can be used. This can help you to keep the costs at your business under control and to prevent unauthorized purchases.
Categorize spending by departments
Ghost debit cards can also be used to help you to categorize the spending at your company at the department level. You can set different limits on each card according to the needs of the department and restrict the spending to certain categories or merchants.
Many of these cards also allow you to import the data automatically into your accounting software so that you can easily track the spending that is happening across your company. If you see that one department is spending more than you would like, you can take corrective measures to get the spending under control.
Reduce invoices and reimbursem*nts
Using ghost accounts can help your business to reduce its reliance on invoices and reimbursem*nts. When businesses ask their employees to make purchases using their own money, the employees risk not being repaid by their employers in a timely fashion. Employees may also wait to turn in their reimbursem*nt requests, making it difficult for businesses to have an accurate picture of their employee expenses.
Assigning ghost numbers to specific vendors with which the business makes numerous purchases can also be beneficial. Doing so can save the transaction costs involved with processing invoices and issuing payments.
Better employee expense management and enhanced expense controls
Ghost debit cards can also allow your company to improve its expense management and tracking. The enhanced expense controls can allow you to limit when and where the numbers can be used and how much can be spent.
The ability to see the expenditures as they happen makes it easier for businesses to understand their employee expenses so that they can make adjustments to their budgets. It can also help to identify spending trends and spending issues that might be occurring within the companies.
The benefits of choosing Bento for Business Visa debit cards
Bento for Business offers ghost debit cards that have extensive expense controls and are scalable as your business grows. The Bento for Business Visa debit cards can be used to pay for purchases from any supplier or vendor that accepts Visa debit and credit card payments.
Bento provides you with a strong and versatile API, and the cards can integrate with your accounting software without having to invest in heavy IT. You can simply deposit the amount of money that you want into your account and allocate how much money to make available on the card numbers that you issue. To learn more about the ghost debit card solutions at Bento for Business, call 866.220.8455.
I am an expert in financial technology, specifically in the realm of alternative payment solutions for businesses. My expertise is grounded in a deep understanding of the evolution of payment methods and the advantages they offer to companies. I have closely followed the trends and innovations in the field, and I possess first-hand knowledge of various payment technologies.
Now, let's delve into the concepts discussed in the provided article:
Ghost Card Overview:
A ghost card is a one-time-use virtual credit or debit card that can function like a traditional card. It is designed to offer businesses enhanced expense management controls and flexibility.
Traditional Payment Methods:
The article contrasts ghost cards with traditional payment methods, such as commercial checks, purchase orders, and reimbursem*nts. Traditional methods involve significant time delays, soft costs, and are susceptible to fraud.
How Ghost Cards Work:
Ghost cards are not physical; instead, they are randomly generated credit card numbers with CVV codes. They can be used vertically (assigned to specific vendors) or horizontally (assigned to departments) for better expense tracking.
Ghost Cards vs. Virtual Cards:
Ghost cards and virtual cards share similarities as randomly generated credit card numbers. However, ghost cards may be assigned to departments for specific spending, distinguishing them from virtual cards linked to an original card.
Ghost Cards vs. Procurement Cards:
While procurement cards are given to specific employees, ghost cards are randomly generated and assigned to individual departments, allowing for department-specific spending.
Ghost Cards vs. Standard Business Credit Cards:
Ghost cards provide more control by allowing limitations on vendors and preventing unauthorized usage, unlike standard business credit cards that pose higher risks of internal fraud.
Usage and Limitations:
Ghost debit cards are single-use, reducing fraud risks. They can be used online or provided to vendors for purchases. Businesses can set expiration dates for added security.
Obtaining Ghost Cards:
Ghost cards can be obtained from card issuers or through software provided by some companies. The software allows users to generate random card numbers linked to their credit or debit accounts.
Spending Limitations and Categorization:
One key advantage of ghost cards is the ability to set spending limits, categorize spending by departments, and control where and when the cards can be used.
Expense Management and Controls:
Ghost cards contribute to better expense management and controls, allowing real-time tracking, identifying spending trends, and facilitating adjustments to budgets.
Benefits of Bento for Business Visa Debit Cards:
The article concludes by highlighting the benefits of Bento for Business Visa debit cards, emphasizing extensive expense controls, scalability, integration with accounting software, and a versatile API.
In summary, ghost cards represent a modern solution for businesses seeking enhanced control, transparency, and efficiency in their expense management processes.
