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How to optimise supplier payments by issuing virtual cards

Discover how a new way of issuing virtual cards can optimise your supplier payments.

19 July, 2023
 ·  8 minutes
A women making a payment using a virtual card

Virtual cards are probably your preferred way of delivering funds to suppliers in real-time if you’re a business making supplier payments. Because they’re automated, this makes them a reliable choice for real-time payments. But there are ways you can optimise your setup even further when it comes to using virtual card issuing to pay suppliers. 

We’re going to walk you through three important elements when it comes to optimising payment transactions. By doing so, you speed up cash flow, increase reliability and save costs, while driving more revenue. 

Before we dive into these areas of focus, let’s understand what the typical virtual cards setup looks like for businesses.

Virtual cards in businesses

The key goals when it comes to paying a supplier will be fast and reliable payouts, no matter whether you’re paying an airline, hotel or other type of business. A virtual card programme for paying suppliers looks generally the same when applied to a variety of businesses: 

Look familiar? This is because you most likely set up virtual cards for suppliers in a similar way; most businesses use this process. However there are further benefits to be gained, with optimisation opportunities that will save you time and money.

Optimising your setup

There are three key areas that are central to optimising and ensuring cash flow efficiency if you're using virtual cards to pay your suppliers, who can also enjoy a streamlined experience.

Automation and reliability

Your suppliers expect to receive their funds on time, every time. As a global business, having a reliable and automated payment setup is essential to your model to build and retain suppliers’ trust.

By reducing how many third parties are involved in the payment process, businesses reduce the risk of errors while improving automation and increasing reliability. 

Choosing an aggregator provider is one way to achieve this. While multiple third parties are often involved, aggregators claim to have just one agreement and one integration. Aggregators manage the relationships with other parties, but with several parties involved there is still a higher risk of errors occurring. 

At Adyen, we don’t rely on third parties. We create a seamless payout process by combining issuing and acquiring in one platform. We’ve built our infrastructure and licensing from the ground up with enterprise businesses in mind.


Virtual cards need funding to pay suppliers. Choosing the wrong type of funding can increase costs and act as a barrier to growth.

Traditionally, there have been two ways to fund your virtual cards. One is to use working capital to fund your balance account, but this approach means the working capital is inactive on your account instead of using it to invest in your business. 

The second is funding via a line of credit, a service offered by issuing banks in which they extend the credit when a payment is made. Because credit lines are technically classed as loans, they’re often expensive and unreliable.

Luckily there is a new and unique way of funding virtual cards that doesn’t require inactive working capital or line of credit services. Businesses can seamlessly bridge incoming funds with outgoing payments to virtual cards for paying suppliers by combining acquiring and issuing in one platform. This approach makes incoming funds instantly available for outgoing card payments.

Acceptance rates

When a traveller places a booking, they want it confirmed instantly. Your payment to the supplier needs to be successful for that to happen, so the traveller can reserve the hotel room or flight. 

When a payment is declined, another attempt is made to complete the payment so the booking is not declined. This causes friction in the process and negatively impacts the user experience.

Choosing the right card for your programme is one way to optimise acceptance rates. A card product is defined by the network it operates on, like Mastercard or VISA, and the bank identification number (BIN) range. Other operational variables it can be identified through include whether it's a commercial or consumer card. It’s important you know which to choose for your programme in order to increase acceptance rates, as some card products are declined in the travel industry. 

You can choose the best option by understanding what card products are accepted or declined by certain suppliers. At Adyen, we support many businesses in the travel sector with acquiring. We understand what type of businesses accept which card products and work closely with you on your programme, advising which card products work best for your business.

In the majority of European countries, we issue cards domestically. This increases the acceptance of your suppliers as domestic processing costs are much lower for them.

Finding the right provider for your business

It may seem challenging to navigate between banks, issuers, and fintech providers. Therefore picking a provider that aligns with the key performance drivers is crucial for optimising your supplier payments and ensuring cash flow efficiency for an enhanced experience. 

We’re going to take you through the pros and cons of the most common setups for supplier payments. Plus we’ll introduce a whole new way of issuing and what benefits it can bring to your business.

Processor only

The provider is solely responsible for processing card payments with this setup, and you manage your card programme and all partnerships involved. So you will need to find your own bank partner, manage the approval of the card programme with the bank and card networks, and ensure compliance.

<p>Strong geographical coverage</p>


Multiple-party setup, increasing the risk of errors

<p>Increased flexibility in choosing partners</p>


Added overhead costs for managing third-party agreements



Additional costs due to managing funding

Programme managed

The provider is responsible for your card programme and partnerships in this programme managed setup. As a result, it removes a lot of the complexity that comes with managing a card programme.

<p>Provider manages licences and agreements with third parties</p>


Higher annual fees and setup costs

<p>Less resources are needed for infrastructure set-up and maintenance</p>


Depending on third parties can result in delays and increased risk

<p>String geographical coverage</p>


Lower interchange revenue

<p>Provider takes care of programme approval and compliance</p>


Whether you choose a processor-only or programme-managed setup, multiple parties need to be tied together to get your card programme up and running. 

True end-to-end payments setup

Providers that offer issuing and acquiring in one solution rely on third parties for banking licences. By building a layer of technology, they aggregate all elements of a payment setup and sell it as a package. However, at Adyen we own all of the technology and licences, making us the only global provider to offer a true end-to-end payment setup.

As a true end-to-end payment setup, we’re a fully licensed provider for issuing and acquiring. By building everything from scratch we’ve eliminated the need for complex, multi-party setups, lines of credit, and high working capital. Incoming funds are available instantly for virtual card payments thanks to the combination of issuing and acquiring in one platform.

Are you ready to take your supplier payments to the next level?

If you're using virtual cards to automatically and securely deliver funds to your suppliers, you’re in the perfect position to take the next step in supplier payments.

Embrace a new way of enhancing your virtual card setup to speed up cash flow, reduce risk, and allow you to invest more in your business.

You also open yourself up to new revenue streams by overhauling your issuing setup. Partnering with Adyen means that when a card transaction is processed in our issuing programme, we share the interchange revenue with you.

Furthermore, you only need one integration for a complete end-to-end setup, so no need to worry about licensing or local compliance in terms of technology.

We have full control of the value chain with our in-house built platform and banking and acquiring licences. This increases the speed of innovation, and improves flexibility as we don’t rely on external parties. 

Get started with a new way of doing Issuing here.

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