If you manage finances for a large business or organization, ghost card payments are the best way to monitor and control spending, oversee financial trends, and eliminate reimbursement paperwork. When you partner with a virtual card platform that offers integrated security and account control features, you can also save your organization hours of time and reduce the chance of credit card fraud.
Learn more about the advantages of using ghost cards and how they’re different from traditional credit card payment methods.
What Is a Ghost Card?
Ghost cards are an alternative to traditional credit or debit cards that allow large businesses to assign virtual cards and individual numbers to specific departments or suppliers. That department or supplier may then use their ghost card to make purchases or charges — within preset limitations, if applicable — that are charged back to the appropriate department or account.
Ghost payment cards are ideal for:
- Large-scale businesses or organizations with frequent spending among multiple departments.
- Businesses and organizations with high-volume suppliers — like health care centers — that want to cut out multiple invoices.
- New vendors or suppliers that you do not have a relationship with yet, to ensure secure charging.
- Organizations that conduct regular, frequent business with repeat vendors.
Compared to traditional credit or debit cards, ghost cards are not tied to a specific plastic card, though physical cards are sometimes available. While they can operate similarly to a credit, debit, or prepaid card, “ghost” refers to the type of process you use to manage them and how the department accesses them.
You can also set limitations and categories for spending and track those expenses among departments, rather than shuffling through paperwork and invoices for each exchange. Ghost credit cards eliminate the need for multiple cards that could get lost or challenging to record. Ghost cards are similar to one-time cards in that you have the same type of payment management and control, but the employee or department can only use the card once before it is no longer active. Ghost cards can be a variation of procurement cards, also known as p-cards or purchase cards, which are used almost exclusively for business-to-business expenses and purchases.
How Do Ghost Cards Work?
Ghost card software generates random card numbers that link back to specific accounts within departments and organizations. Once you’ve assigned a ghost card account to each department within your organization, that department will disperse the information to necessary employees or suppliers for purchasing. As long as a retailer or vendor accepts standard credit and debit card payments, they will accept a ghost card payment. Each charge within a department is sent to your organization’s primary account, which has a higher spending limit.
As the managing account overseeing the ghost cards, you can set certain restrictions per account, like suppliers, vendors, maximum spending amounts, or expiration dates. Individuals will enter payment information into the website or over the phone the same way they would a traditional spending card. After limitations are met, the generated number will no longer be active. You can also close individual ghost cards without interfering with your organization’s primary account in any way.
Specific ghost card programs vary between providers. In many cases, you’re able to automate account monitoring and tracked expenses to save time and reduce error.
Benefits of Ghost Cards
Ghost card advantages include the ability to closely monitor and control spending across departments while tracking real-time updates and giving employees faster, more direct access to funds. Over time, ghost card usage may also result in significant savings for your organization.
1. Monitor and Control Spending
Large businesses with multiple departments and hundreds of employees face the challenge of monitoring and controlling spending without investing too much time or resources on processing invoices and reimbursing payments. Ghost cards are ideal for these situations, as they eliminate the need to assign an individual credit card to each person in charge of spending and saves you hours of reimbursement time.
This method also affords you a level of management not available with traditional cards. You can set your own limitations, including:
- Spending amounts that differ between departments and individuals
- Banned or preferred spending locations
- Specific time periods or days of the week for spending
- Approved vendor or product categories
- An expiration date for usage
Since your organization establishes these limitations, you can prevent financial abuse and save money where it counts. You can then categorize each transaction by department, making it easy to see which departments are operating within budget and track patterns over time.
2. Track Spending in Real-Time
Instead of waiting days or weeks to access important financial information from each department, ghost cards allow instant access to account activity. By tracking spending in real-time, you can eliminate budgetary surprises and make adjustments as needed. Real-time tracking can also help you take control of your product inventory. For example, if a large office has a fully-stocked inventory of shipping supplies, you can set limitations to prevent further purchase of those items and reallocate those funds where they are needed.
Tracking real-time spending also makes it easier to reach financial goals quickly and on-time.
3. Faster Speeds and Accessibility
Ghost cards eliminate the need for each department to have its own petty cash fund or reimbursement system. Instead of waiting for re-compensation or pre-authorization for purchases, departments can get the supplies they need as soon as they need them, so they can continue working without costly delay. This streamlined spending process also means less employee data entry, minimizing the chance for typos or miscalculations that often plague pre-authorization and reimbursement cases.
4. Potential for Savings
Ghost cards can save your business or organization money over time, especially if you have a high purchase volume where bulk discounts or frequent shopping may include discounted prices. Some banks offer rebates to organizations that utilize ghost card payments. Unlike paper checks, there are often fewer fees associated with virtual ghost payment methods. The time you save reimbursing also translates to profit.
According to the Federal Trade Commission, they received 1.7 million reports of fraud in 2019. Nearly one-quarter of those reports resulted in monetary loss. If you choose a ghost card platform with built-in account monitoring and instant fraud alerts, you minimize the chance of theft or costly misuse. Because ghost cards do not require that each employee have individual credit cards, card loss is also less likely.
Virtual Card Management From Hydrogen
With their many advantages, experts predict virtual card usage will continue to grow and nearly triple by 2025. Hydrogen is here to help your business or organization take control of your fintech, including physical and virtual card issuance with easy-to-use configurable apps. Our innovative platform provides:
- Fast app setup and card issuance
- Significant cost savings without long-term commitments
- Integrated notifications and limitations, including overdraft alerts, intelligent spending, and anti-fraud alerts
- Integration with major banks, platforms, and vendors
- Custom card design elements, including your business or organization’s logo
- Up to 1% cashback on all purchases