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What Is A VAN Payment And How Can It Benefit Your Business?

November 29, 2017 No Comments

Featured article by Matthew Walker Jones, Independent Technology Author

money growth 300x170 What Is A VAN Payment And How Can It Benefit Your Business?

No business can survive for long without having its finances in good order, but the world of B2B payments can be overwhelmingly complicated. There are a number of different processes and applications all promising to deliver reliability and efficiency, but which ones are right for your organization?

Increasingly, businesses are exploring whether virtual account numbers, or VANs, provide the ideal method of streamlining the payments process. VANs are 16-digit virtual card numbers that are securely generated whenever a company authorises a transaction. They are, in effect, credit card payments without a card.

As businesses become more accepting of digital innovations, VAN payments are seeing growing levels of adoption. With the many benefits that they offer when compared to traditional card payments, it’s easy to see why.

Security

One of the major advantages of VAN payments is the increased levels of security that they offer. Payment fraud is a huge concern for companies all over the world and with good reason. According to recent reports, fraud could be costing the UK economy as much as £193 billion a year. Although fraudsters use a multitude of methods to syphon funds away, card-not-present transactions represent a significant proportion of illegal payments.

As VANs are single-use only, however, card-not-present fraud is managed. Virtual card numbers are connected to a specific transaction amount and a limited time window, so even if fraudsters were to get hold of a company’s VAN, the threat posed to corporate finances would be limited. What’s more, many virtual payments are backed-up by long-established financial institutions. The virtual account number solution provided by eNett, for example, is protected by Mastercard’s guarantee.

Efficiency

Businesses are also discovering that VANs provide efficiency benefits when compared with traditional payment methods. Virtual account numbers come with an automated audit trail, removing the need for manual processes and freeing your financial staff to deal with more pressing issues. They also do not require any bespoke software to use, so businesses don’t have to worry about overhauling their existing payments system. In fact, VANs can seamlessly integrate with an organisation’s existing booking tools.

In addition, virtual account numbers are accompanied by more comprehensive transaction detail. Unlike ACH and wire transfer payments, VANs do not come with any space limitations, meaning organisations have the option of including all the remittance information that they need. Once again, this provides faster processing by cutting down on manual reconciliation.

Control

Because VANs are single-use payments, they also provide businesses with tighter control over their expenditure. For example, with a company credit card, it can be difficult to keep track of all your different corporate expenses. With a virtual card, however, business leaders and finance managers can easily set a cap on any outgoings because each VAN is tied to a specific payment. For example, if a VAN is issued for a payment of £200 during a particular time window, it will not be possible for clients or employees to exceed this amount, unless authorised by the business generating the VAN. Virtual account numbers, therefore, give businesses financial freedom, while greatly reducing risk.

About the Author

Matthew Walker Jones – Matthew became a freelance writer after studying journalism in Manchester. He has combined his love of writing with his love of technology.

DATA and ANALYTICS , SOCIAL BUSINESS

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