Introducing the Virtual Card Payment Alliance (VCPA), a not-for-profit organization designed to educate, inform and promote the value of using virtual cards, a next generation of electronic payment tools for business-to-business (B2B) transactions. VCPA, based in Dallas, Texas, will include membership from across the virtual card value chain.
While electronic payments continue to grow, many commercial transactions are still made using antiquated paper checks and remittances. In industries where checks are still prevalent, such as insurance and healthcare, companies are looking for electronic payment and reporting solutions that address the inefficiencies associated with paper transactions. A virtual card is perfect for B2B transactions, leveraging the advantages of a card network for efficiency, accuracy and easy reconciliation. It can be used for claim payments in group health, workers' compensation, auto, home and for various other property and casualty payments. Additional benefits include:
- Cost reduction: There are significant savings on bank-related costs; stop-pay/re-issues, positive pay charges and item charges are eliminated and reconciliation is greatly simplified. Companies can also use virtual cards in lieu of paper checks to securely pay claims, invoices and A/P disbursements. The result can be as much as a 75% reduction in print and mail costs.
- Increased efficiency: Virtual cards offer the payee the ability to easily process and reconcile the payment. Remittance advice can be delivered electronically in multiple formats (depending on the market) or via fax or mail to replicate the remittance advice currently being received with checks. The wide acceptance of credit/debit cards across multiple markets provides a significant opportunity to leverage “card” connectivity without the need for new platforms or complex integration.
- Risk and fraud reduction: Virtual cards are for one-time use and are made out for the exact monetary value of the payment amount for which it was issued. Once that amount has been reached, the card is no longer valid. This ensures that the payee cannot overcharge the card and prevents the card from being reused. They also include such features as real-time tracking, specialized fraud screening, and zero liability assurance for both the payer and payee.
"Payers and payees continue to pursue solutions that streamline the payment and receipt process and virtual cards offer an alternative that mitigates cost and risk while increasing efficiency compared to paper payments. With industry leaders, the VCPA will help bring attention to the many benefits of virtual cards," says Jarvis Shockey, Chairman of the VCPA. "The VCPA provides a neutral, third-party voice for the virtual card industry, identifies and promotes best practices, and works with appropriate standards organization to ensure virtual cards are included as an approved payment type. We are focused on promoting virtual card solutions, growing our membership and providing members with tools to help them be successful in their profession."
Leaders in the industry for electronic automation and virtual payments have provided feedback and startup funding for the VCPA to address these market needs. The alliance website is designed to be a source of news, tools and events related to virtual cards and membership is open to all participants in the virtual card value chain, including:
- B2B payment processing solutions, including revenue and payment cycle management, payment processing networks, and information providers
- Insurance for property and casualty, workers comp, home and automotive customers
- Financial and government institutions
- Consultants, financial services firms and payment solutions providers that provide financial products to corporate and individual clients
- Clinical information exchange and end-to-end insurance administration systems
Parties interested in the alliance, or in getting more information about virtual card benefits and solutions, should contact the VCPA directly at 972-922-9483 or via the web site at www.virtualcardpayment.org.
About the VCPA
The Virtual Card Payment Alliance, a 501(c)(6) tax-exempt not-for-profit organization, is designed to provide education and resources that promote the use and benefits of virtual cards in business-to-business transactions. The objective is to increase adoption rates and use of virtual card payments across multiple industries to help create more value for both payer and payee. The VCPA will do this by providing forums, educational tools, policy and thought leadership across the industry. For more information visit www.virtualcardpayment.org.
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