Ghost cards for your business: What to know

When you’re a business owner, there’s no shortage of things to keep track of. And since you can only be in one place at one time, you need to ensure that you are focusing your time and attention on the areas where you make the biggest impact. One way to achieve this is by simplifying processes whenever you can. For example, you can simplify the process of making purchases across multiple departments or with different vendors. How? By using ghost cards. Ghost cards are digital credit cards that are assigned to different departments within an organization, or cards that are designated for use with a specific vendor. 

Keep reading to learn more about how ghost cards work, their advantages and potential disadvantages, and how to decide whether you should use them in your business.

What you’ll learn:

• A ghost card is a type of digital credit card that can be linked to a specific department or vendor.

• Ghost cards can simplify the payment process and help with expense tracking. But because they can be shared across departments, there’s a potential for misuse and a higher risk of fraud.

• When deciding whether to use a ghost card for your business, think about the size of your company, how often you work with vendors and how much control you need to have over employee spending.

Ghost cards work like business credit cards in the sense that you can use them to make company purchases against a revolving line of credit. But instead of being tied to one person, they’re typically linked to a specific department or vendor and come with their own 16-digit virtual number. A larger company might use ghost cards to separate payments across multiple departments or vendors, which can help when it’s time to track spending and manage expenses. 

You can have more than one ghost card for your business, but they’re all tied to one account. That means all the charges made with different ghost cards show up on the same credit card statement. Ghost cards come with benefits that are especially useful for business owners, like the ability to set spending limits and create categories for different types of expenses. Plus, you can use ghost cards to make recurring payments because the virtual numbers don’t change.

Here are some different ways you can use a ghost card for your business.

• Assign to vendors: You can link a ghost card to a specific vendor, allowing them to charge the card whenever you or someone on your team needs to make a purchase. You can also set a trial period with certain vendors, so there won’t be any charges made after a given date. 

• Make recurring payments: Ghost cards are great for handling recurring payments for things like subscription services or repeated vendor payments. When they’re linked to a specific vendor, the virtual number is separate from the primary account number, which helps keep transactions secure. 

• Set expense categories: If your business has specific types of expenses, you can use ghost cards to set up categories. For example, if your team is on the road frequently, you can create a travel category so you don’t have to comb through individual expenses for every trip. 

• Manage employee expenses: You can use a ghost card to manage multiple employee expenses for things like events or client meetings, without having to hand out physical cards.

• Separate project budgets: You can link a ghost card to a specific project or campaign, which can make it easier to manage expenses and break down costs.

• Monitor digital ads: When promoting your business, you might use ghost cards to separate each marketing campaign, making it easy to track which platform gives you the best results.

• Make online purchases: Using a ghost card for your online purchases is one way to keep your main account safe. It’s a great way to keep your primary card number protected.

There are some reasons to consider using a business ghost card, such as:

• Streamlined expense management: Ghost cards can make it easier to review company expenses and track budgets. This is because you can simply review the transaction history rather than digging through separate documents or reports. And if you tie ghost cards to specific vendors, you can easily track the amount you’ve spent with each.

• Fraud protection: To keep your sensitive information secure, ghost cards use a virtual card number that’s different from your primary account number. This could come in handy if you were working with an unknown vendor, for example. Since each card is linked to its own department or assigned to a certain purpose, it’s easy to track how it’s being used. If you spot any misuse or fraud, you can quickly deactivate your ghost card without affecting any of the other cards.

• Simplified payments: When you’re working with different suppliers, you can use a ghost card for each one to help keep your records clear, precise and easy to manage.

While ghost cards can make things easier and be more convenient, there are some downsides to keep in mind, such as:

• There’s a higher risk for misuse: Since ghost cards are shared across departments as opposed to being assigned to a specific person, there’s a greater chance they could be misused—especially because the statement doesn’t specify who made the transaction. To keep things in check, some companies might ask managers to provide additional expense reporting to guarantee that all transactions can be accounted for. 

• Certain transactions could be limited: If a physical card is needed to make a transaction, ghost cards may not be sufficient. For times when employees need to pay with a physical card—for example, when picking something up in a store or taking a client out to lunch—you might need to have multiple business credit cards on hand in order to pay.

• A potential for higher costs exists: Because ghost cards are tied to a larger credit card account, interest can be charged if there’s an outstanding balance. To avoid accruing interest, it’s important to pay off those balances—especially when transactions move between departments.

Even though ghost cards seem similar to virtual credit cards, there are some key differences. A virtual card is a digital payment method, usually meant for one-time purchases. They generate a new number each time you make a transaction—and each new number is considered a token. Ghost cards, on the other hand, use a fixed 16-digit number that you can use for multiple purchases. 

Another key difference is that virtual credit cards are typically attached to individual cardholders, while ghost cards are tied to departments. This means you can only use ghost cards to track department spending, as opposed to employee-specific expenses.

When deciding whether to use a ghost card or a virtual card in your business, there are a few things to consider.

• How big is your company? If you have a larger organization with multiple departments, a ghost card can help simplify expenses and save you time on reimbursement processes. 

• What level of control do you need? If you have leaders overseeing department expenses, ghost cards can be a simple way to make business purchases. But if you’re looking for more control over individual spending, you might opt for a different payment method, like virtual cards.

• How often do you work with vendors? You can assign a ghost card to each vendor you work with, making payments easier and allowing for recurring transactions. But if you’re not regularly working with vendors, you might not need to use ghost cards for your transactions. When you use virtual card numbers, if one of those merchants compromises your account, your business can generally continue to run without disruption. The only virtual card number affected would be the one tied to that particular merchant.

• What are the alternatives? There are other types of payment methods for your business that still offer convenience and customization. Capital One business credit cards provide free employee cards that empower you to set customized spending limits and monitor transactions. Plus, you can earn rewards on every purchase made.

Ghost cards let different departments make purchases to vendors on behalf of your business, without the need of a physical card. However, because these cards are shared, you might feel a bit disconnected from the purchasing process—especially if you don’t have a lot of departments at your company. In this case, you might consider comparing Capital One business credit card options and get pre-approved today.