Virtual Credit Cards (VCCs) have emerged as one of the most efficient tools in the world of digital payments, especially in travel, procurement, and B2B transactionsTransactions transactions Interactions where value is exchanged for goods or services.. From Booking.com’s hotel payments to global ERP-integrated corporate travel, VCCs solve for securitySecurity security Measures used to protect transaction data from fraud and cyber threats., control, and reconciliation in a way that physical cards simply can’t.
- What VCCs are
- How they work technically
- Use cases in travel and procurement
- Licensing & scheme requirements
- Key global players
- VisaVisa visa A leading global payment technology company connecting consumers, businesses, and banks. and MastercardMasterCard mastercard A global payments network enabling electronic transactions between banks, merchants, and cardholders. VCC products
🔍 What Is a Virtual Credit Card (VCC)?
A Virtual Credit Card is a digitally generated card number (PAN, CVV, expiry) that’s issued for a specific transaction, timeframe, or merchantMerchant merchant An individual or business that accepts payments in exchange for goods or services.. It functions like a standard Visa or Mastercard but offers:
- 🔐 Better security (not linked directly to your real card)
- 💳 Controlled usage (e.g., amount, merchant, date)
- 📊 Easier reconciliation (meta tags, booking IDs, etc.)
🏨 Use Cases in Travel & B2B Payments
VCCs are heavily used in travel tech, corporate expense, and B2B procurement.
| Industry | Use Case | Description |
|---|---|---|
| Travel OTAs | Hotel Prepayment | Booking.com or Expedia generates a single-use VCC for each booking and sends it to the hotel. |
| Corporates | Employee Travel | Tools like SAP Concur or Navan issue VCCs to employees for flights, hotels, and transport. |
| B2B Payments | Supplier Payouts | VCCs act as an alternative to ACH or wire, especially for cross-border or instant payments. |
| FX Control | Multicurrency Spend | VCCs in local currencies help avoid FX fees or volatility. |
| Gig Economy | Freelancer/Contractor Payouts | Short-term virtual cards enable controlled spend access. |
🧠 VCC Technical Architecture: How a Virtual Card is Generated
Step-by-step Flow:
| Step | Description |
|---|---|
| 1. Funding SourceFunding Source funding-source The origin of the money used to complete a transaction, such as a bank account or card. Setup | The issuerIssuer issuer A bank or financial institution that issues payment cards to consumers. Responsible for authorizations and chargebacks. (a bank or fintechFintech fintech Short for financial technology, refers to tech-enabled innovation in financial services. with BIN sponsorshipBIN Sponsorship bin-sponsorship An arrangement where a financial institution allows another party to use its Bank Identification Number for issuing cards.) has a physical or virtual funding account – this is usually a card program with Visa/Mastercard. |
| 2. BIN Control | The issuer uses a dedicated BIN range (or sub-range) for virtual cards, often flagged differently in the scheme’s BIN database (e.g., product type = “virtual only”). |
| 3. VCC Generation Engine | A card issuance platform (e.g., Marqeta, GPS, Galileo, Enfuce, or in-house) calls an API or back-end module to: |
- Generate a unique PAN (Primary Account Number)
- Assign an expiry date, CVV, and usage controls (amount, currency, MCC filter, etc.)
- Tie it to a funding account/token | | 4. Network Tokenization (Optional) | For extra security or wallet provisioning, the VCC may also be tokenized by Visa Token Service (VTS) or Mastercard MDES. | | 5. Activation Rules | Usage restrictions, expiry, merchant lock, or single-use flags are embedded either in scheme data (Visa/Mastercard APIs) or handled by the issuer’s authorizationAuthorization authorization The real-time process of verifying that a payment method has sufficient funds or credit limit for a transaction. Results in an authorization code from the issuer. logic. | | 6. Transmission to User or Merchant |
- In travel, VCC is sent to a hotel via extranet or API
- In expense tools, it’s shown to employees on web/app
- For B2B, passed via EDI/ERP or embedded in invoice workflows |
🛠️ Required Licensing & Infrastructure
| Component | Requirement |
|---|---|
| BIN Sponsorship | Direct issuing license with Visa/Mastercard or indirect via a BIN sponsor (e.g., Railsr, Enfuce, Marqeta) |
| PCI-DSS Compliance | Needed if storing/generating card numbers or CVVs |
| Card Network Product | Must enroll in Visa VPA (Virtual Payment Account) or Mastercard VCN (Virtual Card Number) programs |
| Issuer Processing | Either self-hosted or via issuer processors like Marqeta, Galileo, Thredd (ex-GPS), FIS, or TSYS |
| KYC/B FraudFraud fraud Criminal deception involving unauthorized payments or use of financial credentials. Checks | Required especially for reloadable or open-loop VCCs issued to end customers |
🔄 Visa & Mastercard Products for VCCs
| Scheme | Product | Description |
|---|---|---|
| Visa | Visa VPA (Virtual Payment Account) | Used by banks and fintechs to issue virtual cards for travel, B2B, and expenses |
| Visa Commercial Pay | API-enabled solution for corporates, includes controls for spend, MCC, etc. | |
| Mastercard | Mastercard VCN (Virtual Card Number) | Token-based VCC solution with advanced controls for use in B2B travel and AP automation |
| Mastercard In Control | Platform that allows precise spend controls, merchant restrictions, and date ranges |
👉 Both schemes require program enrollment and periodic reporting for these virtual card programs.
🔁 How VCC is Mapped to Funding
Options:
| Model | Description | Example |
|---|---|---|
| Linked to a physical card | VCC is mapped to a parent card, transactions flow through to that account | Personal finance apps (Revolut, Brex) |
| Direct issuing account | VCC has its own ledger/balance | Expense platforms (SAP Concur, Amex GBT) |
| Corporate pooled account | All VCCs settle into one commercial account, but VCCs used for control/reporting | OTAs like Booking.com, airlines, or travel resellers |
🧪 Authorization Mechanics
When a merchant attempts to charge the VCC:
- The transaction hits the issuer processorIssuer Processor issuer-processor A platform that handles card issuance and transaction processing for banks or fintechs. (e.g., Marqeta)
- ProcessorProcessor processor A company authorized to process credit and debit card transactions between acquirers and issuers. verifies usage rules (amount, MCC, dates, etc.)
- If valid, routes to the card scheme (Visa/Mastercard)
- Scheme routes it to the funding issuer for final approval
- If scheme tokens are involved, de-tokenization is handled via MDES/VTS
- SettlementSettlement settlement The process of transferring funds from the issuer to the acquirer. is done via normal clearingClearing clearing The exchange of financial information and instructions between acquirers and issuers to facilitate settlement./settlement cycles
🔒 Security Controls Possible
| Control Type | Examples |
|---|---|
| Spend | Max $500, only once, within 3 days |
| Merchant | Only for MCC 7011 (hotels) or whitelisted supplier |
| Geography | Lock to country or region |
| Time | Only valid between booking and checkout date |
| Metadata | Store booking ID, employee ID, GL code in transaction data (via Level 3 fields) |
🏢 Key Players in VCC Space
| Provider | Description | URL |
|---|---|---|
| WEX | Leading issuer for travel and fuel VCCs | wexinc.com |
| CSI (Fleetcor) | Enterprise-grade virtual cards for AP automation | csiglobalvcard.com |
| AirPlus | B2B virtual cards for managed travel | airplus.com |
| Amex GBT | End-to-end travel VCC solutions for corporates | amexglobalbusinesstravel.com |
| Marqeta | API-based card issuing platform | marqeta.com |
| Navan (TripActions) | Expense + travel platform with VCCs | navan.com |
| Brex | Corporate card and spend management with VCC | brex.com |
| Booking.com | OTA using VCCs for hotel payouts | booking.com |
🧠 Visa & Mastercard Products for VCCs
| Scheme | Product | Description |
|---|---|---|
| Visa | Visa VPA (Virtual Payment Account) | Designed for travel, T&E, and B2B use cases |
| Visa Commercial Pay | API-first solution with real-time card issuance and spend controls | |
| Mastercard | Mastercard VCN (Virtual Card Number) | Powerful virtual cards with dynamic spend rules and integration with travel tools |
| Mastercard In Control | Control engine layered on top of VCN for real-time spending governance |
🔄 Real-world Example: Booking.com Hotel VCC Flow
- Customer books a hotel on Booking.com (prepaid)
- Booking.com issues a single-use VCC
- Card credentials sent to hotel via extranet or PMS
- Hotel charges card on check-in date
- Booking.com settles funds with its acquiring bank
🎯 Result: No risk of customer card chargebackChargeback chargeback A dispute raised by the cardholder that results in reversal of a transaction. Can lead to penalties for merchants., automated reconciliation, reduced fraud.
🔮 What’s Next for VCCs?
- 💳 Embedded VCC issuance via APIs (e.g., Mastercard Send + VCN)
- 📱 Mobile-native virtual cards in Apple Pay / Google Pay
- 🧾 Invoice-linked VCCs for B2B procurement
- 🌍 Cross-border multicurrency VCCs to simplify FX
- 🤖 AI-based controls for dynamic card creation based on policy
🧠 Conclusion
Virtual Credit Cards are more than a security feature — they are powerful enablers of automation, compliance, and global digital commerce. Whether you’re a travel OTA, a global finance team, or a fintech embedding payments, VCCs are fast becoming table stakes.
Want help implementing or advising on VCCs for your platform or business? Let’s talk.
Vibhu Arya is a fintech and payments expert with 15+ years of experience simplifying how money moves across digital and retail ecosystems. He’s led strategy and partnerships at Citibank, Adyen, and IKEA, and helped scale fintech startups (Snapdeal, iPaylinks) to $1B+ valuations. Vibhu’s expertise spans cards, crypto, cross-border, and real-time payments. He is the founder of PaymentsPedia.com, where he writes about the future of payments.
📧 vibhu@paymentspedia.com | LinkedIn