Corporate Cards: Definition, Benefits and Comparisons

Now that banking and technology are more sophisticated, many businesses issue corporate cards to employees for work-related expenses. Features such as spending controls, accounting integrations and cross-border payment capabilities can all play an important role in determining which card is right for your business.

Understanding how corporate cards work and how to compare them will help you choose a solution that best supports your business's needs.

Key points

• Learn what corporate cards are and how they work

• Discover how they can benefit a business

• Explore the differences between corporate cards and business credit cards

• Learn how to choose the right card for your business

• Find out how Verto's multi-currency corporate card can help you

What is a corporate card?

Corporate cards can be given to employees for business-related spending, removing the need to spend their own money and claim back expenses. The company, rather than the individual cardholder, is responsible for repaying the balance. Although businesses of any size can use these cards, they're typically more common among larger organisations, as many providers have eligibility requirements that smaller businesses may not meet.

Who receives a corporate card?

Finance teams can issue cards to employees who regularly deal with work-related expenses. Depending on the company's policies, cardholders could include senior leaders, department heads, procurement teams, frequent travellers and other employees responsible for making purchases on behalf of the business.

How do corporate cards work?

When employees hold corporate cards, they can pay for expenses directly rather than covering costs themselves and claiming them back later. Most providers allow businesses to issue multiple cards under a single company account, giving finance teams a centralised view of spending. They can monitor transactions and even set spending limits from one place. The business is legally liable for the debt on the card, which means the individual's personal credit score isn't affected.

There are several types of corporate cards, including:

• Credit cards: Allow businesses to borrow funds and repay the balance according to the provider's terms.

• Charge cards: Usually require the full balance to be paid at the end of each billing cycle.

• Debit cards: Users can draw funds directly from a linked business account.

• Virtual corporate cards: Digital cards that can be issued instantly, often with custom spending limits or expiry dates.

• Global or multi-currency corporate cards: Designed for international businesses that need to manage spending across multiple currencies and regions.

Are there eligibility criteria for corporate cards?

Yes. Like with personal credit cards, businesses need to meet relevant eligibility criteria to be granted corporate expense cards. These criteria typically include:

• Legal registration

• Tax identification number

• Business bank account

• Annual revenue threshold

• Creditworthiness

• Documented financial stability (via financial statements, bank statements)

• Minimum level of spending

What are the benefits of corporate cards?

Corporate spending cards can be beneficial to businesses in a number of ways.

Improved expense management

It can simplify the expense process for both employees and finance teams. Transactions are recorded automatically, making it easier to track purchases and capture receipts. This efficiency helps to reduce administrative work as a result, while reducing the risk of human error.

Better visibility over company spending

Corporate expense cards provide a clear view of how, where and when company money is being spent. This, in turn, can be useful information for future planning. Finance teams can track spending in real time without lags, which lends itself to more accurate forecasting and budget planning.

Reduced reimbursement claims

This means less admin for both employees and the employer. It can be particularly beneficial for employees, as it means they no longer have to untangle workplace finances from personal finances. With reimbursement cycles often lasting several weeks, this means they don't have to be out of pocket or submit receipts within a strict window.

Spending controls and card limits

Employers can have greater control over employee spending, which takes the pressure off both parties and sets clear boundaries. Individual card limits and even spending categories can be controlled centrally.

Rewards and business perks

Air miles, cashback, points, sign-up bonuses – there are numerous rewards and perks businesses can take advantage of with corporate cards. With effective planning and implementation, these can be used to save money over the long run.

What can corporate cards be used for?

There are several examples of business expenses that can be made simpler with a corporate card. Examples include:

• Travel

• Accommodation

• Software subscriptions

• Office expenses

• Client expenses

• Team expenses

Corporate cards vs business credit cards

Both corporate cards and business credit cards help cover company expenses, but they're designed for different types of businesses. Corporate cards help larger businesses manage employee spending at scale, whereas business credit cards help smaller businesses access credit for day-to-day expenses.

Here's a more detailed breakdown:

Are there any drawbacks to consider for corporate cards?

Corporate cards can offer significant benefits, but they're most effective when they're a good fit for the business using them. Taking the time to assess your needs and regularly monitor spending can help you avoid unnecessary costs or complications. Here are some factors to take into account:

• Eligibility requirements: Not all businesses are eligible due to minimum spending levels or specific revenue thresholds.

• Potential for overspending: Without clear policies and appropriate controls, company spending can become more difficult to manage across multiple cardholders. Staying aware of employee misuse risks is critical.

• Impact on cash flow: If faced with interest charges, this can impact cash flow and make financial planning trickier.

• Vendor restrictions: Certain vendors may not accept credit cards as payment, in which case the employee would need to fund the purchase another way and have this reimbursed.

• Additional administration: While corporate cards can reduce business expense management when it comes to reimbursements, they still need ongoing oversight. Managing multiple cardholders, monitoring spending activity and enforcing company policies needs manual intervention, particularly for larger organisations.

How to choose the right corporate card

After assessing whether a corporate card is right for your business, you should take the following steps:

• Review spending controls: Take your time to look at controls to limit misuse. Can you set spending limits? Can you block certain vendor categories?

• Consider virtual corporate card options: Virtual cards can be a useful security feature, as they can be created for a single purchase or issued with a specific spending limit and expiry date. They also offer greater flexibility, allowing employees to start making approved purchases immediately without waiting for a physical card to arrive.

• Check international capabilities: For businesses operating internationally, it's important to consider how corporate spending fits into wider global payment processes. Some providers go beyond traditional card services by offering cross-border payment solutions and access to multiple currencies from a single platform.

• Check accounting software compatibility: Remove manual burden by picking a card that syncs up with ERPs for more accurate, real-time oversight of card and wider business spending.

• Compare fees: Consider the total value offered by the card, not just its headline features. Look for costs such as annual fees, foreign transaction fees, cash withdrawal charges and currency conversion fees.

• Compare rewards: Once the foundations are ticked off, make sure you pick a card with rewards that will best serve your business needs. Examples include air miles, cashback, discounts and points programmes.

What are the best corporate cards for global businesses?

For global businesses, foreign transaction and currency conversion fees can create additional costs if they aren't properly accounted for. You can address this with a multi-currency corporate card provider that lets you hold and spend multiple currencies without unnecessary conversions. Ideally, find a provider that issues local cards in your main operating regions to make cross-border spending less complicated.

Verto's multi-currency corporate card allows companies to manage international expenses more efficiently. With it, you can simplify cross-border spending while giving finance teams a single view of global expenses.

You can also:

• Set spending controls

• Scale your card program

• Hold separate pots of money in 11 currencies

• Spend in 160 currencies

• Be accepted at 150 million Visa-accepting merchant locations worldwide

• Get 0% FX conversion fees in 10 major currencies (including USD, EUR and more)

Explore multi-currency corporate card solutions for your business with Verto

Learn more about our multi-currency corporate card and see how your global business can benefit from a global card.

Whether you're paying international suppliers or seeking greater control over company spending, Verto simplifies the process. As a global financial technology provider, we give businesses access to cross-border payments, FX and banking solutions through a single platform, helping keep international operations moving. As a fully licensed and certified provider, we operate to the highest industry standards, helping you manage international payments with confidence.

Register today or speak to our sales team to see how we can assist your business's needs. For more information, visit the Verto blog.