Most of the conversation around card payments in the nonprofit sphere tends to be about the best ways to process electronic donations. This focus is, of course, highly understandable: No 21st century nonprofit can thrive without empowering donors with an easy means of supporting the organization. But what about the flip-side of the payment coin? Nonprofits have to pay their suppliers, too, and some ways are smarter and more beneficial to charitable organizations than others.
For instance, when nonprofits implement virtual card solutions for their automated accounts payable, the accrued benefits can be exceptional - revolutionizing not just the accounts payable process, but organizational funding strategies, as well. A not-for-profit organization that implements virtual card payments for a significant portion of its AP spend can expect to reap a host of perks, including cost-savings; time-savings; heightened payment security and control; and most compellingly, an alternative source of revenue to help fund its mission.
Reason #1: More Cost-Savings
Virtual cards deliver cost-savings to all types of organizations - not just nonprofits - in several ways:
- A more efficient payment process helps organizations save money on staffing, processing and posting costs.
- By providing revenue share to their users, virtual cards can help fund AP improvements like an ERP upgrade.
- Because virtual card is a proven AP solution that costs nothing to implement, users avoid the financial risk typically associated with adopting a new payment platform.
Reason #2: More Time-Savings
Time is money, particularly for an organization operating on a strict budget, so it's worth delving more into the ways virtual card promotes efficiency for its users:
- Deploys a payments process that takes 60% less time than paying by check.
- Bypasses the time‐intensive practice of supplementing ACH payments with detailed invoice information.
- Seamlessly interfaces with any accounting system and provides automatic reporting.
- Requires no downtime for install and implementation.
Reason #3: More Payment Security and Control
In addition to being hyper-efficient, virtual card is incredibly secure. Here's how this technology helps nonprofits uphold their fiscal accountability:
- Reduces risk of check or wire fraud by taking advantage of Single Use Ghost Account (SUGA) technology: each payment is made with its own, one-time-use, 16-digit credit card number.
- Suppliers keep no buyer payment info on file. No card number on file = no opportunity for theft of card number.
- Reduces risk of “maverick” spending that comes with purchase cards by centralizing buying through virtual cards, which are authorized for a specific payee and specific payment amount that can't be altered by a third-party.
4) Mission-Funding Revenue Share
Perhaps the single biggest way virtual card payments can revolutionize a nonprofit's AP strategy is by transforming accounts payable from a cost center to an authentic source of revenue to help fund organizational operations:
- Every payment made generates a rebate for the purchasing organization.
- Quarterly rebate checks deliver significant, tangible funding potential.
- Rebates in no way compromise nonprofit status.
The fact that, at press time, more than 20,000 organizations now pay more than 1 million suppliers with virtual cards is a testament to what the platform delivers: super-efficient, super-secure payments, and a significant revenue share. These facts, along with an increased openness to all forms of electronic payment, explain why virtual card payments have surged among nonprofits. Is your nonprofit organization already using this simple, highly effective technology? What do you love about it?
Not using virtual card, yet, and feel like you might be missing out on something big? Download our ebook on virtual card for nonprofits to learn more about what's involved with implementing virtual card, and what rewards your organization may realize by using it.