How one FinTech innovation could change the way you manage and control corporate expenses, Payments & Cards Network, April 2016 Edition

How one FinTech innovation could change the way you manage and control corporate expenses

The FinTech sector is about innovation. But which technologies will change the financial and business landscape now and well into the long term? Virtual Card Numbers is a technology that is being successfully used by some of the world’s biggest companies and yet it is relatively unknown. Conferma has been pioneering and developing VCN technology for 10 years. Its clients alone handled $2.5bn worth of transactions with its VCN technology last year. What is more, Conferma counts 20 card issuers including Citi Group and Barclaycard’s Precisionpay, which is its fastest growing product set in commercial payments, amongst its client base. Simon Barker, CEO and founder of Conferma gives us an overview of the payment technology and why its potential is something that we should take note of over 2016.

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What is a VCN

The term ‘virtual’ can be misleading. A virtual card number is a normal 14, 15 or 16-digit card number which banks issue from their standard Bank Identification Number ranges. Just like physical payments cards they also carry an expiry date, the cardholder`s name and a three or four digit CVV or security code. However, instead of being stamped physically across a plastic card, the number is generated digitally at point of sale and used for that designated payment only. VCNs don’t look any different to merchants and are processed as standard Cardholder Not Present transactions. Restrictions can be placed on how the VCN is used — including the merchant category code, amount and date range in which the VCN can be charged. VCNs are proving popular because of the advantages they hold over rival payment methods. A traditional centrally billed account, for example, is often not PCI compliant and can pose a security risk. The other alternative is issuing payment cards to individual members of staff but, as we shall explore in this article, this option holds the risk of expense claims not being right.

VCNs helping with the complexity of expense management

The vast majority of businesses are sensitive about their data security and protection. Recent data breaches and hacker attacks over confidential information have been a reasonable justification for concern. Yet it’s not simply your own business you should be worried about. Take a moment to think about how many different suppliers your payment details are stored with. Financial services, office supplies, IT supplies, caterers… anyone who supplies goods and services to your company is likely to have payment and other details about your business on record. All it takes is just one of them to have a data breach and you are compromised.

Because VCNs can only be used for a specified purpose and have randomly generated number, if it falls into the wrong hands, it is useless. Using VCNs to pay your suppliers means that they don’t have any payment information of yours on record and, if they have a data breach, your payment information will remain safe. Controlling the management of expenses is another area where VCNs can add significant value. Because VCNs are for specified purposes, time frames and amounts, they cannot be misused. For example, setting the date range in which the VCN can be charged, means that employees no longer need to use their personal cards. This eliminates the practice of expense claiming causing cash flow irregularities. Moreover, VCNs immediately do away with the risk of employees filing incorrect expenses claims.

VCNs and efficiencies

Managing expenses is time and costconsuming. There are receipts to be collated, forms to be filled out, checked, counter-checked and signed, payments to be approved and cost-centres to be reconciled against. All of these cost money but, with VCNs they needn’t as they are all done automatically. The VCN eliminates the need for expenses to be paid to employees as everything is paid for with the VCN. It takes away a labour intensive process and replaces it with a fully automated process. And that is always good for those profit margins.

Digital economy

Just about every aspect of our personal and banking lives is handled digitally now and we are all reaping the benefit of simple, secure and speedy finance. Yet, so far, expense management is lagging far behind. With the VCN the whole process is digitised and the time consuming paper handling becomes a thing of the past.


The VCN is a FinTech innovation that empowers business payment and solves problems identified by business leaders as having a significant impact on their companies. We believe that it is set to revolutionise payments in 2016 and beyond, bringing much needed security, automation and simplicity to corporate expenses at a time when this has never been more vital.

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