The Rise of Virtual Credit Cards and Managing Fees: Where Surcharging Fits In

A PYMNTS survey CFOs and treasurers in North America indicates there will be significant virtual card growth in 2025. While only 3.3% are using them today, nearly 14% of respondents said they expect to add virtual cards in the next 12 months, representing a 322% increase in the share using the cards.

According to the report, corporate credit card usage is also expected to grow. All this growth means more credit card fees for merchants to handle—and while surcharging can help shrink the cost of credit card acceptance broadly, there are nuances with virtual cards that must be considered.

What Are Virtual Credit Cards?

A complement to physical credit cards, virtual cards provide a secure and convenient alternative for B2B companies to issue payments online using a uniquely generated card number, expiration date, and security code. Typically, businesses can generate single-use or multi-use cards authorized for a specific purpose, spending limit, and timeframe.

Each type has its advantages: Where single-use cards expire immediately after a single transaction—prioritizing security and anonymity—multi-use cards cover various transactions within a defined period, enabling flexibility and convenience for recurring payments.

Compared to their physical counterpart, virtual cards provide greater control and visibility from end-to-end, enabling real-time payment, seamless deactivation, detailed reporting, and decreased security risk. Whether single- or multi-use, these cards offer numerous beneficial use cases for B2B payments, including but not limited to corporate expenses, employee reimbursements, and supplier payments.

Virtual cards also reduce the administrative burden associated with traditional payment methods. Automated expense management allows businesses to record and categorize expenses with minimal manual input, giving teams the freedom and bandwidth to focus on strategic initiatives. In an era where more executives are placing emphasis on external working capital, virtual cards can optimize cash flow and extend payment cycles, providing a considerable advantage.

Evolving Perspectives on Virtual Credit Cards

As the demand for seamless, real-time transactions continues to grow, 2025 is shaping up to be a pivotal year for virtual credit card adoption. Across the payment landscape, virtual card solutions present an opportunity to optimize financial operations, offering greater speed, security, cost savings, and automation.

Driven by a growing emphasis on efficiency and fraud prevention, the adoption of virtual cards brings increased flexibility to the B2B payment ecosystem. Unlike physical corporate cards, they enable greater adaptability for fluctuating payment volumes as well as the ability to streamline procurement processes, granting greater visibility and control over expenses.

According to a recent PYMNTS report, 56% of CFOs believe virtual cards are key for managing financial flexibility. Unlike traditional methods like checks and Automated Clearing House (ACH), virtual cards can integrate with modern accounts payable tools and eliminate the need for cumbersome reconciliation processes, enabling businesses with a high volume of transactions to digitize their payment processes with greater transparency and improve working capital efficiency. In another poll of CFOs and treasurers by PYMNTS, approximately 80% of respondents said they plan to increase their use of external working capital. As a result, virtual card usage is projected to double.

Virtual Credit Card Challenges: Where Surcharging Fits In

The major problem with virtual cards is a carry-over issue from the broader world of credit cards: the cost of acceptance. Requirements for B2B companies to use virtual credit cards include a mix of 3 different fees: interchange, scheme, and merchant service (or markup). Likewise, features and fees can vary between providers and products, with interchange alone fluctuating between 0.5% to more than 1.5%. Taken together, overall fees can hit 3% and beyond.

So, it’s no surprise that credit card fees are the 3rd largest cost for U.S. merchants. Given the expected rise of B2B virtual credit card usage, this cost of doing business could continue to grow. And with the added technical complexity of virtual cards—generating virtual cards adds a layer of work beyond just using the same card number for everything—there are barriers in place to adoption. But the benefits are worth it to surmount these hurdles – 56% of CFOs agree!

Fortunately, there is a solution for the cost concern: surcharging. Virtual credit card acceptors can use surcharging to keep costs down, allowing them to accept this increasingly popular payment option without hurting or eliminating their margins. Surcharging provides additional benefits for acceptors of all card types, virtual or otherwise: accepting cards ensures guaranteed funds and fast settlement, reducing days sales outstanding (DSO) and improving liquidity.

Surcharging therefore opens up the world of virtual card acceptors. That lets paying companies deploy them for payments more broadly, reaping the benefit of financial flexibility and security everywhere.  

How InterPayments Can Help

When implementing surcharging on virtual cards, there are many nuances that have to be taken into account. For example, because single-use credit cards are often set for a certain amount, a surcharge could cause payments to fail.

This is just one example what needs to be understood when surcharging virtual cards. To maintain the cards’ versatility, merchants need a surcharging provider with technology that can seamlessly plug into existing payments flows, account for these added complexities, and not break any compliance rules.

As a Managed Surcharge Provider, InterPayments can help merchants meet this growing need while compliantly balancing the cost of acceptance through surcharging. Our technology instantly and automatically calculates the exact surcharge amount for each specific credit card—virtual credit cards included—and seamlessly integrates into any payments system already in use. Rest assured, every InterPayments Certified surcharge is guaranteed to comply with all applicable laws and regulations, with indemnification.


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