A Better Way to Pay: How Virtual Cards Can Simplify Payments

Healthcare’s digital transformation is reshaping the way providers, insurers, and patients interact. At the heart of this shift lies the need for the industry to adopt modern payment processes. Because as the complexity of healthcare transactions continues to grow, traditional payment methods like checks and ACH transfers are proving increasingly inadequate.

Enter virtual cards: a game-changing solution that’s revolutionizing the way healthcare manages its business-to-business (B2B) transactions. By leveraging the power of digital payments, virtual cards offer a new level of flexibility, security, and control that is perfectly suited to the unique demands of healthcare finance.

This shift towards modernization is not just about adopting new technologies; it's about reimagining the entire payments ecosystem to deliver enhanced experiences, improve operational efficiency, and unlock new opportunities for innovation. From real-time payments to blockchain-powered global transactions, the world of payments is poised for a new era of speed, transparency, and connectivity.

Defining Virtual Cards: The Future of B2B Healthcare Payments

In 2026, the global value of virtual card transactions will reach $6.8 trillion, up from $1.9 trillion in 2021. This staggering growth of virtual cards represents a paradigm shift in B2B payments, offering healthcare organizations a secure, efficient, and flexible alternative to traditional payment methods. 

What are Virtual Cards?

At their core, virtual cards function just like physical credit cards — but without the plastic. Virtual cards include unique, digitally generated credit card numbers that are created specifically for individual transactions. This approach provides a level of control and security that is unmatched by other payment methods.

When a virtual card is issued, it is assigned a specific dollar amount, expiration date, and merchant category code, ensuring that it can only be used for its intended purpose. This granular level of control is particularly valuable in the healthcare industry, where large volumes of payments must be managed across a wide range of suppliers and service providers.

How do Virtual Cards Work?

The process of using virtual cards is straightforward and efficient. When a healthcare organization needs to make a payment, they simply request a virtual card number from their issuing payment partner, bank, or fintech provider. This request can be made through an online portal, API integration, or even via email. Once the request is approved, a unique, 16-digit virtual card number is generated for the specific transaction. This number is then provided to the payee, who processes the payment as they would with a traditional credit card. 

How Virtual Cards Simplify Healthcare B2B Payments

Healthcare organizations often grapple with intricate supplier networks, which include a diverse mix of medical device manufacturers, pharmaceutical distributors, and specialized service providers. This complexity demands a flexible payment system capable of handling diverse purchasing scenarios and supplier requirements. Traditional methods like checks and ACH transfers often fall short, especially for one-off purchases and specialty orders.

For health plans, virtual cards ensure easy, accurate payments to providers while offering immediate access to funds. With the enhanced controls of virtual cards, health plans can set specific parameters, such as limits on spending or transaction types, to ensure compliance with contract terms and prevent overpayments. This flexibility empowers health plans to maintain budget control while improving relationships with providers. 

The benefits of virtual cards extend far beyond mere convenience, and they emerge as a powerful tool to streamline healthcare accounts payable (AP) operations. This digital-first approach provides the flexibility to accommodate diverse supplier needs and eliminates expenses associated with paper payment methods. 

One of the key advantages of virtual cards is their ability to seamlessly integrate with existing AP processes and systems. By leveraging the same infrastructure as traditional credit card payments, virtual cards can be easily adopted without requiring significant changes to day-to-day operations. 

Virtual cards generate comprehensive transaction data that simplifies reconciliation. Automated reconciliation captures data directly into existing financial systems, making reconciliation quicker, more accurate, and less labor-intensive. By automating the payment process and reducing manual data entry, virtual cards streamline AP workflows to save time and enhance visibility into healthcare spending. 

Perhaps most compelling benefit of virtual cards is the ability to generate new revenue streams through early-pay incentives and rebate programs. Many virtual card providers offer cash-back rebates on AP spend, allowing healthcare organizations to turn their payment processes into a profit center. A recent survey of healthcare CFOs and treasurers noted their increased use of working capital solutions — specifically virtual cards — to pay 30% more of their invoices earlier than the prior year.

The transition to virtual cards represents a shift towards a more streamlined and responsive payment environment. By removing the logistical constraints of physical payment methods, healthcare can achieve a higher degree of operational efficiency.

Enhancing Security and Fraud Prevention with Virtual Cards

Virtual cards offer a compelling solution to the security challenges of traditional payment methods. By employing single-use card numbers, their design inherently prioritizes security, providing healthcare organizations with a powerful tool to mitigate fraud risks. 

This method effectively thwarts unauthorized transactions, as each card number is valid only for its specific transaction during a designated time frame. Plus, the temporary nature of these numbers makes it nearly impossible for fraudsters to misuse them, thus fortifying the payment security infrastructure. 

Virtual cards also enhance control over financial activities, reducing the risk of misappropriation and unauthorized expenditures. By improving administrative oversight and safeguarding financial assets, virtual cards help healthcare organizations maintain trust with patients and partners.

Choosing the Right Virtual Card Partner for Your Healthcare Organization

Identifying the most suitable virtual card solution requires a strategic evaluation of factors that align with your organization’s needs. When selecting a virtual card provider, health plans, third party administrators, and healthcare organizations must weigh several essential factors:

• Comprehensive Acceptance Networks: The scale of a payment acceptance network significantly influences the efficacy of virtual card programs. Partners with extensive networks ensure smooth transactions with a wide range of suppliers, enhancing payment efficiency and reducing friction.
  
  
•  Integration Capabilities: Integration with existing AP and financial systems is critical for minimizing disruptions. Partners that offer seamless integration enable organizations to incorporate virtual cards into their current workflows effortlessly.
  
  
• Revenue Generating Programs: The opportunity to enroll in these programs help optimize cash flow by earning rebates or incentives on transactions, providing new revenue that can be reinvested into patient care or operational improvements.
  
  
• Advanced Card Controls: The capability to customize card parameters — such as transaction limits and vendor categories — is crucial for maintaining control over financial operations. Enhanced control features not only bolster security but allow organizations to tailor virtual card usage to specific needs.
  
  
• Dedicated Program Support: Providers committed to supporting the adoption of virtual cards are valuable. This support includes onboarding assistance, payment execution, and ongoing program management, ensuring that virtual card initiatives remain simple and effective. 

By carefully evaluating these factors, healthcare organizations can select a virtual card partner that not only meets today’s needs but positions them for tomorrow’s successes. 

Embracing Digital B2B Payments in Healthcare

Virtual cards are increasingly becoming the preferred choice for B2B transactions in healthcare, offering a strategic solution to payment complexities while enhancing financial operations. As healthcare organizations modernize, virtual cards provide a secure and efficient payment alternative, transforming AP into a strategic asset. 

By leveraging the efficiencies and financial incentives of virtual cards, CFOs can improve cash flow, drive cost savings, and uncover new revenue opportunities, supporting both immediate financial goals and long-term growth in a rapidly evolving industry.

Get Started With ECHO

As one of healthcare’s most trusted payment solutions providers, our clients leverage the industry’s largest payment network of 1.6M + unique provider and vendor connections for fast, painless payment processing through virtual card, digital check, EFT, and more.

Deciding if virtual cards are a fit for your organization? To learn more about our payment solutions for healthcare providers, health plans, and TPAs, contact us and let’s simplify your payments – together.