Nonprofits play a vital role in communities worldwide, often providing crucial support to those who need it most. Because of their status, nonprofits enjoy certain financial benefits to which for-profit organizations may not be privy. One financial tool that for-profits have embraced, however, can also be particularly useful to nonprofits: Virtual card payments. Virtual card presents unusual benefits in cost-efficiency, payment efficacy and security to nonprofit organizations.
What Is a Virtual Payment Card and How Does It Work?
A virtual payment card generates a random credit card number that can be used only once in a payment to your vendors. The numbers themselves are associated with your account but your actual account number(s) are never present in the transaction data. All your real info is stored on a server that is located far away from where the transaction with your vendor actually takes place.
Virtual Card Numbers Are Good for Payments Security
The fact that the virtual card number for a particular transaction is usable only once means that it can never be used again by a hacker for any future illegal transactions. A breach of any kind can majorly disrupt a nonprofit’s mission. This level of security makes virtual card a wise and responsible idea for nonprofits to implement.
Virtual Payment Cards Allow You to Set Limits on Each Transaction
A majority of nonprofits necessarily adhere to rigorous budgets. In order for a nonprofit to properly manage its budgets, it needs the means for controlling spending. Virtual payments for nonprofits allow nonprofits to set precisely defined limits on the amount of each payment that an organization sends to a vendor.
This means that you can set up payments that deliver a fixed amount by an agreed-upon time. Doing so also has the benefit of preventing any of your vendors from increasing the amount of the payment or changing the frequency of the payments. This means more protection for the organization.
Virtual Payments for Nonprofits Help Better Manage Cash Flow
It’s no secret that nonprofits run a tight financial ship. Virtual payments can help you get a much firmer grasp on your cash flow, courtesy of enhanced spending controls. You’ll also have access to more detailed spending reports with each transaction that you make with virtual payments. This transparent cash flow record will come in handy when it's time to plan your next schedule of vendor payments, or do quarterly accounting and annual budgeting.
Learn More About Virtual Payments for Nonprofits
If you have questions about using virtual payments, our primer on virtual card for nonprofit organizations can help. Grab your copy here: