Corporate cards are payment cards that a company gives its employees for work spending, with limits and rules set before anyone spends. They are also called company cards or business cards. Each employee's card belongs to the company's account, and the company, not the employee, pays the bill.
Here is how a corporate card differs from an ordinary credit card. The finance team sets rules in an app before the card is used. For example, it can set a monthly limit for each employee, allow only certain kinds of shop, such as hotels and airlines, and block cash withdrawals. Each time the card is used, the payment is checked against these rules in the two seconds that the payment takes. A payment that breaks a rule is declined at the counter.
Take, for example, a field sales executive at a pharmaceutical company in Madurai. Her card has a limit of ₹40,000 a month and works only for travel, fuel and restaurants. She pays ₹1,800 for a client dinner. The payment is approved, because it is within her limit and the shop is a restaurant. A minute later, the app asks her to photograph the bill. The purchase appears in the company's expense management software, already filled in.
The old way was to let employees spend and to check later. At the end of the month, an employee in the accounts team matched every line of the card statement against the receipts. This check is called reconciliation. With rules set in advance, most of that checking happens as each payment is made.
A corporate card runs on the same systems as any other card. A bank issues the card, and its card issuing platform approves or declines each payment. Many fintechs sell corporate cards that a partner bank issues for them. The money to pay the card bill usually comes from the company's business current account. At the end of each month, the card statement is posted into the company's ERP, its main accounting system.
Corporate cards come in two special forms. A fuel card pays for fuel at the pump and checks each purchase against the vehicle. A virtual card is a card number with no plastic card, often made for one supplier payment. Many companies also book work trips through corporate travel management software and charge them to the company card.