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Six Ways to Generate More Rebates from Virtual Cards

September 14, 2019

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The Quest for Rebates

One of the top motivations for AP departments to give up in-house check writing in favor of an outsourced supplier payments company is the lure of rebates.

After all, an outsourced payments company has a wide range of electronic payment options available, many of which provide cash back or rebates based on the dollar amount spent.

But turning rebates from a trickle into a steady revenue stream requires a bit of know- how. And, a few things have to happen before the AP department can generate a regular rebate check.

What Is a Virtual Card?

Simply put, a virtual card is a randomly generated, 16-digit credit card number that exists electronically, and is referenced through email or online portal, rather than a physical card.

Each virtual card number is unique and can only be used to pay for a pre-designated transaction or transactions. It is usually backed by Visa or Mastercard, which charges an interchange fee for its usage.

How Do Outsourced Companies Deliver Rebates?

Let’s start with how outsourced payments companies deliver rebates in the first place.

Many payments companies can pay your suppliers with an emailed virtual card, also known as single-use card, to pay a specific invoice.

Virtual cards work similarly to regular credit cards and are backed by the same institutions, such as Mastercard and Visa.

However, virtual cards are significantly more secure, and offer better protection against fraud and misuse.

Suppliers underwrite the rebate –often split between the payments company and the buyer –as part of the interchange rate.

The trade-off: Suppliers can get faster payment, while enjoying secured funds, and more detailed remittance data.

Suppliers run the virtual card numbers through their Point of Sale terminal.

The money is deposited directly into their checking/bank accounts.

Growing Supplier Acceptance of Virtual Cards

These benefits, along with others, are helping to drive acceptance of virtual card. In a recent Nexus survey of their suppliers, 20% said faster payment was a motivating factor to sign up for virtual card.

Another 60% said they did so because their customers preferred it.

So, AP Departments have a lot of sway over payment choices and should feel comfortable promoting virtual card.

Six Things You Can Do to Maximize Rebates

1: The Sooner You Enroll, the More Rebates You Earn

The sooner your vendors receive payment via virtual card, the faster you can eliminate check processing costs and generate revenue from your new cash rebates.

Critical to your success with paperless supplier payments is the choice of a third-party payments company, as not all are created equal. Some usage agreements stipulate holding your rebate until the end of a yearly cycle, or in the worst cases, require minimum earnings before releasing any rebates at all.

Thus, it’s best to find a payments company that can offer you regular monthly or quarterly rebates, which helps give your business a more predictable revenue stream from virtual card payments.

2: Focus on Supplier Industry Saturation, Not Supplier Network Size

Many third-party payments companies boast that they have thousands of suppliers in their network who are eager and ready to accept virtual card payments.

While that’s an impressive marketing statistic, it may not help you gain rebates faster. That’s because it doesn’t matter if the third-party payments company has a  lot of suppliers in the health care industry already accepting virtual card, when your business is in real estate.

You are essentially starting from zero in that scenario. The third party is cold calling your suppliers and asking them to accept virtual cards for their payment. That’s a big trust gap the third party has to cross.

3: Pick a Payments Company with Active Supplier Outreach

While collaborating with your vendor and supplier partners to ensure they can accept virtual card payments, it is also critical that your third-party payment vendor is continuously working on your behalf to enroll more of your suppliers.

Your third-party vendor should be doing multiple rounds of outreach. It should also give you fresh content for your front-line employees so they can keep the education effort up on their end.

4: Mind the Gap: Monitor and Reduce the Number of In-House Payments

Naturally, your business is growing and so is the number of new payees. You also may have a bunch of payees that your AP department has held back from paying electronically for a variety of reasons. It’s important to mind the gap. The more vendors you pay in-house, the fewer rebate opportunities you have.

Thus, it’s critical that your third-party vendor (and your AP team) stays on top of the number of vendors you are paying in-house and are not enrolling in a virtual card payments program.

Keep in mind, though, some payments may remain ineligible for rebates, such as tax disbursements. But, things change regularly and some payees who may not have been open to virtual cards may have a change of heart at some point.

5: Work with Suppliers Who Already Accept Virtual Payments

Another area to ensure maximum rebates from virtual payments is to give preference to hiring vendors and suppliers that are already enrolled in virtual credit cards, or who are willing to enroll.

The supplier interview process is a great time to have a conversation around payment options and to give preference to those suppliers who already are receiving or are open to accepting virtual credit card payments.

Seeing this conversation as an opportunity to source suppliers who are part of a collaborative B2B ecosystem is the best way to realize the benefits of digital transformation in the source-to-pay process.

6: Enroll Front-line Employees in Supplier Outreach

Another powerful way to maximize your rebate revenue is to ask your front-line employees to spread the word about virtual cards to your vendors and help them get enrolled. Your employees are engaged every day with repeat vendors and suppliers, often developing close business relationships based on mutual trust.

They can easily overcome any objections to using a virtual card and highlight the advantages of faster payment, more remittance information, and guaranteed funds delivery.

Leveraging these relationships to help vendors and suppliers enroll in receiving virtual credit card AP payments is a great way to broaden your available network of enrolled suppliers even further.

This pays off. Based on Nexus statistics, companies with actively involved employees can convert up to 20% more of their suppliers to virtual card.


AP teams everywhere are leaning on virtual cards to pay their suppliers. In fact, the Payables Friction Playbook reports 68.9% of AP professionals are “very” or “extremely” satisfied with paying suppliers via ePayables with Virtual Cards.

Part of the reason for this high level of satisfaction is rebates. Not only do companies save the expense and manpower of cutting checks, they also generate a revenue stream for little to no investment. And that’s powerful.

But companies shouldn’t look at virtual cards –and their associated rebates -as solely under the control of the outsourced payments vendor. There are things that they can do to help build this revenue stream. It just takes a little focus.