Small and medium-sized businesses (SMBs) have long sought tools to boost their growth and simplify operations. SaaS companies have stepped in to answer this need, equipping SMBs with software solutions tailored to their unique needs. 

Yet, while SaaS providers empower other businesses, they, too, face their own challenges, particularly when it comes to managing payments. 

Between handling vendor payments, navigating subscription models, and ensuring secure transactions, it’s common for obstacles to arise. 

Fortunately, virtual credit cards (VCC) for SaaS companies have made their mark in modern finance, standing out as a powerful tool to improve spend management. 

Why SaaS companies need virtual credit cards

While it's doable to handle business payments with traditional payment methods – like a corporate card, checks, or ACH – it's not optimal. 

These conventional and manual methods simply can’t scale with your business nor meet the specific demands of SaaS operations. Not to mention, they often lead to inefficiencies, fraud, and overspending due to the lack of oversight and control. 

This is why you need to consider virtual cards as a better, more effective alternative to address payment challenges and get a grip on company spend. 

With features such as spending limits, custom expiration dates, unique card numbers, and reporting capabilities, virtual cards don’t just secure your transactions but offer real-time visibility into every transaction.

You’ll always know where and how funds are being spent, giving you a clear picture of payments as they occur rather than waiting for month-end reports. 

Let’s go over some of the ways you can use virtual cards in your SaaS company and an overview of the benefits you can expect. 

Recurring payments  

Overview

For SaaS companies, managing multiple subscriptions is integral to daily business operations. These recurring payments, from software tools to marketing platforms to other third-party services, are essential to keep operations moving. However, depending on traditional payment methods to manage numerous subscriptions can quickly become a challenge and cause interruptions.  

Challenge

Each subscription service you acquire for your business has its own distinct billing cycle and terms. Initially, managing these subscriptions with a single corporate card might seem straightforward. However, as your business grows and demands more resources, it becomes increasingly easy to hit your credit card limit, leading to declined payments. Missed or failed payments, whether due to expired card details or maxed-out credit limits, will only disrupt services and affect both your business's operational flow and customers’ trust.

VCC solution

Virtual credit cards offer a strategic solution to this challenge. With unique card numbers, specific spending limits, and custom expiration dates per card, you can allocate a dedicated card for every subscription provider. Doing so will not only streamline reconciliation at month’s end but also safeguard against any overcharges. Plus, the option to set up auto-refill cards, which automatically replenish with a predetermined amount every month, further reduces payment failures and interrupted operations. 

Security concerns  

Overview

With the rise of cyber threats, secure payment methods are becoming even more pressing. If your SaaS company relies on digital platforms and online portals to handle payments or shares one corporate card among various vendors, you’re particularly vulnerable. 

Challenge

Using a single corporate card for all business payments means sharing your credit card information with multiple providers. This practice, while convenient, introduces a significant risk. For instance, if one of these providers suffers a data breach, your card information could be exposed, leading to potential fraud attempts. Moreover, while many online payment portals maintain high-security standards, no system is entirely immune to breaches, and the repercussions of such an event can be severe for your business.

VCC solution

Virtual credit cards for SaaS companies answer these types of security challenges. By generating a unique card number for each transaction or provider, you can significantly reduce the risk of sharing card details across multiple platforms and vendors. If there’s ever a suspicion of a security breach or a virtual card is affected, you can instantly deactivate the card and ensure the rest of your financial operations remain unaffected. This means that there is no need to close down accounts, open new ones, or provide a brand new card number to every single vendor. This proactive approach not only safeguards against potential financial losses but also helps preserve the trust and confidence of your customers and stakeholders.

Flexible vendor payments   

Overview

Just as you rely on numerous subscription services to run your company, you might also work with multiple vendors and contractors. These partnerships, which can range from cloud hosting to intricate third-party integrations, are the backbone of many SaaS operations and ensure your business runs smoothly. 

Challenge

However, with these collaborations come the intricacies of managing vendor payments. From managing various billing cycles and terms to ensuring timely payments and even occasionally renegotiating terms, effectively managing vendor payments can become cumbersome. Not to mention, a missed or delayed payment can not only strain the vendor relationship but also disrupt the seamless functioning of the business.

VCC solution

With virtual cards, it's easier to streamline vendor payments and ensure timely and accurate transactions. Simply allocate a specific virtual card to each vendor, set a predetermined spend limit and expiration date, and secure a smoother payment process while fostering improved vendor relationships. Moreover, the hassles of wrongful billing and potential fraudulent activity will be significantly reduced. With features like real-time tracking and custom reference codes, you can also count on reconciliation becoming a breeze for your finance team.

Expense management 

Overview

In SaaS businesses, where every decision can impact growth trajectories and customer satisfaction, meticulous expense management is not just a best practice—it's a necessity. Making sure every dollar is accounted for and spent wisely can be the difference between a thriving SaaS company and one that struggles to maintain its competitive edge.

Challenge

Yet, managing expenses in a SaaS environment is fraught with challenges, especially since expense management tends to be a reactive approach. The dynamic nature of operations, combined with the myriad of expenses from software licenses to team development, can make it easy for costs to spiral out of control without visibility. Unauthorized payments can slip through, and the manual process of gathering receipts and reconciling at month's end can be both time-consuming and prone to errors.

VCC solution

Fortunately, expense management becomes simpler by bringing virtual cards into the mix. This is because virtual cards introduce more transparency, control, and efficiency to your expense management process. They allow you to monitor expenses in real-time, ensuring anomalies are spotted and addressed immediately rather than after the fact. By setting spending limits on virtual cards, you can also ensure adherence to company budgets. At the same time, unauthorized expenses become a concern of the past since you can assign each virtual card for a specific purpose or vendor. When it's time for reconciliation, integrating virtual credit cards with expense management tools ensures a seamless, accurate process for your finance team.

Scaling operations 

Overview

If your SaaS company is growing, your financial operations must scale to keep pace. This expansion brings in a surge of transaction volume, and the need to maintain consistent and effective payment experiences. 

Challenge

Scaling operations is like performing an engine upgrade on a jet in mid-flight. That’s what makes this process so challenging. And if you rely on traditional payment infrastructures, this is often even harder, as they’re inflexible and not built for rapid expansion. Entering new markets adds complexity and requires navigating currency conversions and local financial regulations. For that reason, a seamless payment experience is critical during growth, as any disruptions may not only affect customer satisfaction but tarnish your company’s reputation. 

VCC solution

Virtual cards are a great tool for SaaS companies amid scaling. Not only do they accelerate operations, but they also provide you with the versatility and efficiency you need to adapt to the evolving needs of your business. You can instantly issue as many virtual cards as you need, adjust spending limits to align with expanded budgets, and enter new markets without having to set up multiple banking relationships or open new lines of credit. The flexibility virtual cards bring to the table helps you maintain momentum during expansion. This way, you can quickly adapt to new financial landscapes and ensure compliance while you get the time back to focus on the big picture.

How Extend's virtual card solution fits in

With Extend, leveraging virtual cards for SaaS has never been easier. 

Forget the hassle of shutting down accounts, opening new ones, or starting from scratch with a new financial institution. All you need to get started is five minutes and your existing business credit card. 

Then, you’ll be ready to start issuing virtual cards across your business and instantly streamline payment processes through an intuitive platform that turns your existing credit card into a spend management solution. 

From issuing virtual cards, to delegating spending power with budgets, to gaining real-time tracking and controls, Extend is designed with SaaS operations in mind.

This adaptability makes Extend an ideal solution for SaaS companies looking to scale, effectively manage vendor payments, and maintain complete control over financial operations. 

To learn more about Extend and how it can benefit your business, book a demo with one of our product experts. 

The virtual advantage: The final word on virtual credit cards for SaaS

Agility and security are paramount in the world of SaaS. 

To keep up with the industry’s fast pace, you need to adopt innovative payment tools that can scale with your business. Virtual cards stand out as a powerful solution, empowering SaaS companies with the tools to tackle the complexities of digital payments.

By embracing virtual cards now, not only will you stay ahead of the curve, but you will position your SaaS company for enduring success in an increasingly digital-first business landscape.