Accepting Virtual Card Payments: B2B Rules, Fees, and Workflow
Accepting virtual credit card payments from AP departments? Learn what they cost, how straight-through processing works, and how to reconcile each one.
Photo: Pixabay
On this page 7 sections
- Why Customers Pay Suppliers With Virtual Cards
- How a Single-Use Supplier Virtual Card Works
- Virtual Card Acceptance Fees Run on Commercial Interchange
- Straight-Through Processing vs. Keying the Card Yourself
- Reconciling Virtual Card Remittances to Open Invoices
- Accepting Virtual Credit Card Payments vs. Surcharging or Pushing ACH
- Virtual Cards From Online Travel Agencies Follow the Agency's Terms
Key takeaways
- Single-use controls cause most virtual card declines, so charge the exact remittance amount once, on the day the card arrives.
- Enhanced data lowers your cost only if your pricing passes lower interchange through, so check whether you're on interchange-plus.
- Price a virtual card against what it costs you to wait for a check, not against zero.
- With travel agency cards, the valid-from date and loaded amount set the rules, so take a separate guest card for incidentals.
Accepting virtual credit card payments works like any other card-not-present sale. A customer's accounts payable (AP) team sends you a card number tied to one invoice. You either key it into a virtual terminal or let the buyer's bank push the payment straight into your merchant account. What sets virtual cards apart is cost and paperwork. They are commercial cards, so they price on commercial interchange, and the remittance that explains each payment arrives separately from the money. Skip the data fields and you overpay. Skip the matching and you end up with unapplied cash.
Why Customers Pay Suppliers With Virtual Cards
Your buyer chose card for its own reasons. Companies that pay suppliers by card earn rebates from the issuing bank on that spend. They also hold their cash longer, because the card bill comes due after you've been paid. Fraud exposure drops too. A number that works once, for one amount, is worthless to a thief, while the bank account number printed on every check can be reused. For the buyer, that combination of rebates, float and fraud control is what virtual card B2B payments offer.
AP teams roll these programs out through supplier enablement campaigns. You get an email or a call asking you to take card on future invoices, and the pitch leans on faster payment. Card networks and AP software vendors promote these programs hard, and our supplier playbook for B2B virtual card programs looks at one recent push from the supplier's side.
Card acceptance is negotiable. Decide it one customer at a time, using the math later in this article.
How a Single-Use Supplier Virtual Card Works
A supplier virtual card is a commercial card number that the buyer's bank generates for one payment. The AP system attaches controls to it: a spending limit set to the payment amount and a short validity window. Programs that use merchant category restrictions add a third control. Once the window closes or the card has been charged, the number stops working.
The details reach you in one of three ways. You receive an email with the full card credentials and the list of invoices being paid, or a link to a secure portal where you view the card. Under straight-through processing, covered below, you receive no card at all.
Those controls cause most supplier declines. A charge above the loaded amount gets declined unless the program built in a tolerance. Splitting one invoice across two charges on a single-use card fails, and so does charging after the expiration date. Charge the exact remittance amount, once, the day the email arrives.
Treat that email as cardholder data. When it carries the full card number and security code in plain text, it falls under PCI DSS, the card industry's data security standard, which prohibits keeping the security code after authorization. Process the payment first. Then delete the email or lock it down under your PCI policy, and ask your processor or PCI assessor to confirm what that policy needs to cover. If a customer agrees to let you keep a reusable card on file, follow our guide on storing a customer's card on file safely.
Virtual Card Acceptance Fees Run on Commercial Interchange
Interchange is the fee set by the card networks and paid to the bank that issued the card. Commercial and purchasing cards sit in their own interchange categories, priced above standard consumer cards. Virtual cards also arrive keyed or online, and card-not-present sales price above card-present ones. Stack those two facts and virtual card acceptance fees look steep on your statement.
Your cost comes from two places. Network rules set the interchange category, based on the card product, the size of the sale and the completeness of your transaction data. Your processor's pricing then sets how that category reaches your statement. Keep the two apart when you read a bill, because one is a network rule and the other is one company's price.
Large-Ticket Rates and Enhanced Data
The networks' published interchange tables include categories for large commercial transactions. Once a sale crosses a set size, these categories charge a lower percentage than the standard commercial rate.
Enhanced data earns better rates too. Level 2 data adds fields such as the sales tax amount and a customer code, and Level 3 adds line-item detail like product codes, quantities and unit prices. Leave a required field blank and the sale drops into a more expensive category. That is the most common reason a B2B sale costs more than expected because of an interchange downgrade.
Category names and thresholds change with each network's rate update, so confirm the current tables with your processor before you price around them. Our explainer on Level 2 and Level 3 processing for B2B cards lists the fields involved.
Your pricing model decides whether you see any of the savings. On interchange-plus pricing, a lower category lands on your statement as a lower cost. On flat-rate or tiered pricing, the processor keeps the difference unless your contract says otherwise. If most of your card volume is commercial, find out which model you're on before you spend staff time on data fields.
Straight-Through Processing vs. Keying the Card Yourself
Straight-through processing (STP), also called buyer-initiated payment, removes the keying step. You enroll with the buyer's bank or AP platform and give it your merchant account details. From then on, the bank runs each payment into your merchant account and sends remittance data on its own track. Nobody at your company handles a card number.
| Manual keying | Straight-through processing | |
|---|---|---|
| Who runs the charge | Your staff, in a virtual terminal or gateway | The buyer's bank or AP platform |
| Card data exposure | You handle the full card number | You never see it |
| Declines from wrong amount or expired card | A real risk | Rare, because the bank runs the charge |
| Enhanced data | You enter it | Set by the program |
| Enrollment | None beyond your merchant account | Per-bank or per-platform setup |
STP saves labor and removes data-entry errors. In exchange, you give up control. The buyer decides when to pay, and both your interchange and your remittance depend on the buyer's data quality. Before enrolling, ask the program how it submits Level 2 and Level 3 data and whether the interchange category will show on your statement.
If you key cards yourself, set your tools up for B2B work. Use a virtual terminal or gateway that supports Level 2 and Level 3 fields, so staff enter the customer code and line-item detail on every charge. Field support differs by product and gateway. Get written confirmation before you rely on it, whether you stay with your current setup or compare options such as MannyPay's virtual terminals.
For address verification, enter the billing address exactly as the remittance shows it. That address belongs to the virtual card program, not to the ship-to line on your invoice. Keyed sales draw more scrutiny in general, and our piece on why keyed transactions cost more and trigger reviews explains how to stay clear of it.
Reconciling Virtual Card Remittances to Open Invoices
The money and its explanation arrive separately. Your bank deposit shows a batch total that mixes virtual card payments with your other card sales. The remittance email or portal shows which invoices the buyer meant to pay. Matching the two by hand gets tedious once you have a few dozen card-paying customers.
These habits make the matching easier:
- Put the invoice number in the customer code or PO field when you key the charge. It then appears in your processor's transaction report and counts toward Level 2 data.
- Save the remittance to the customer's record in your accounting system before you delete the card details.
- Reconcile from your processor's transaction-level report instead of from bank deposits.
- Post processing fees to their own expense account, so invoices close at full value instead of showing as short-paid.
Short payments need their own rule. When a virtual card covers less than the invoice, the buyer took an early-pay discount, disputed a line or applied a credit. Record the gap and its reason the day you see it. Sorting it out at month-end is much harder.
Accepting Virtual Credit Card Payments vs. Surcharging or Pushing ACH
You have three ways to respond to a virtual card request, and the right one depends on the customer.
Accept at full cost when card payment gets you paid meaningfully sooner or when collecting from this customer has been a struggle. Full-cost acceptance also fits when the account is big enough that friction isn't worth the risk.
Surcharging is available only where state law and network rules both allow it, and single-use cards make the mechanics tricky. The card is loaded for the invoice amount, so a fee added at the terminal pushes the charge over the limit and gets declined. The fee has to appear on the invoice before the AP team creates the card.
Network surcharge rules cover credit cards only, and a virtual card issued as a prepaid or debit product is off-limits for surcharges, so confirm the card type before adding a fee. Our guide to passing card fees to customers on B2B invoices covers the disclosure steps, and MannyPay's surcharging program handles setup where it's permitted. State surcharge laws differ, so confirm your obligations with a qualified professional.
Pushing ACH fits customers who will pay on time by bank transfer, because bank payments cost far less per transaction than card. Our comparison of whether to push customers toward ACH or credit card sets out the tradeoffs.
How to price the decision. Compare the card against the cost of waiting, not against zero. The cost of waiting for a check is the invoice amount × your annual borrowing rate × the number of days the check would arrive after the card payment, divided by the days in a year. The cost of the card is the invoice amount × your effective rate on commercial cards, taken from your own statement. Use your line of credit's rate for borrowing, and divide your total commercial card fees by your commercial card volume for the effective rate.
When the card costs less than waiting, or only slightly more, it wins once you add the staff time spent chasing checks and the risk that a check never arrives. A downgrade from missing data raises your effective rate and tips the comparison against the card, so the enhanced-data work above pays off here. If the customer would pay by ACH within a few weeks instead, the comparison tilts toward ACH. Ask before you agree to card.
Virtual Cards From Online Travel Agencies Follow the Agency's Terms
Hotels and tour operators receive virtual cards from online travel agencies when the guest prepaid the agency. These cards follow the agency's payment terms, not an AP department's.
Read three things on each card before you charge it. The first is the valid-from date, which the agency sets, and charging before it is a guaranteed decline. The second is the loaded amount, which matches what the agency collected from the guest and leaves out incidentals. The third is the expiration date, which the agency also sets and which leaves little room after checkout. Properties in Georgia can see how Georgia's $5 hotel fee and Atlanta hotel tax stack at checkout.
Check all three in the agency's extranet. Take a separate card from the guest for incidentals and handle that card under normal authorization hold practices. Charging early or over the loaded amount gets a decline, and an approved charge that breaks the agency's terms leaves you open to a dispute later. If that dispute comes through Amex or Discover, see how Amex and Discover dispute codes differ from Visa. Keep the reservation record and the agency's terms filed with the folio. Properties working through these flows can see how MannyPay supports payment processing for hotels.
Before your next statement arrives, pull a list of every customer paying by virtual card and check whether each charge went through with enhanced data. The ones that didn't show you where you're overpaying. If you want a second opinion on your commercial card pricing, request a free quote and a MannyPay specialist will respond within one business day.
This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.
