Startups Gain an Edge with Fast VCN Payments

Virtual card numbers can be a game-changer for companies that use them creatively. VCNs — random 16-digit numbers that are generated only for a specific transaction or set of transactions — provide the foundation for businesses that rely on large numbers of immediate, secure payments.  

Companies that make money by connecting consumers to products or services are in the vanguard of putting VCNs to creative use. They receive customer payments, but must then quickly pay the company that actually supplies what was purchased. By linking their commerce platforms directly to their bank’s VCN service, they can automatically generate large numbers of payments.  

Startups gain an edge

HONK Technologies put VCN payments into play in its app that connects stranded motorists with nearby tow truck drivers, locksmiths and other automotive help. The customer pays HONK, and once the job is complete, HONK reimburses the service provider. Its system automatically generates payment requests to Silicon Valley Bank, which triggers the creation of a VCN for the agreed-upon amount. 

HONK and other startups are using VCNs to:  

  1. Build a network of business partners “VCNs are a very technology-forward way to accomplish what we’re trying to do,” says Matt Bijur, HONK SVP of operations. Companies like HONK need a large network of providers to deliver the service they promise. Paying them accurately and quickly is essential to building that network. 
  2. Avoid security headaches The ability to issue VCNs for specific payment amounts reduces the potential for fraud or being overcharged. “Since we're paying so many different service providers every day, you only want them taking the exact amount owed,” Bijur says.  
  3. Organize dollars and cents Application programming interfaces (APIs) allow for the company to create customized information fields to fill in additional details about the vendor or the transaction, or to create reference numbers or categories that help organize the data. That level of detail makes it easier to reconcile transactions and organize accounting, as well as accumulate other data that can be mined for insights.  
  4. Remove obstacles to growth Once a company’s systems are linked to the bank via an API, the company can generate VCNs for as many payments as necessary. That’s essential for businesses that are looking to grow fast. In contrast, processing checks or reconciling hundreds of conventional card transactions each week requires investment in building and maintaining a back-office infrastructure. “We have to do this at tremendous scale,” Bijur says, “so automation is key.”

Business Models Built on VCNs

E-commerce marketplaces: Online marketplaces don’t keep the goods they sell in inventory. Instead, they are able to offer a wider range of options to shoppers by displaying items sourced from a large number of other merchants. By connecting their e-commerce back end to the card issuer’s systems via an API, they can automatically request a VCN to pay the supplier for each item sold. 
Service-on-demand offerings: A whole new breed of tech companies has sprung up promising to connect customers to on-demand services, like speedy food delivery, errand-runners, house or office cleaners, or, in HONK’s case, automotive help. When a user requests a service through an app or a website, the company engages that service provider and can automatically pay it by generating a VCN for an agreed-upon amount.


To learn more about how to take advantage of API integration with virtual card numbers via SVB’s Commercial Card program, contact your SVB Global Treasury and Payments Advisor     

Related Content

Read more in our series about how to optimize your company's payments tools and processes on SVB's Payments Trends & Insights page.  

Related Video

Watch how virtual card numbers (VCN) reduce a payment’s processing cost and fraud risk through increased efficiency, control, and security.

Virtual Card Solutions  


The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. You should obtain relevant and specific professional advice before making any investment or other decision. Silicon Valley Bank is not responsible for any cost, claim or loss associated with your use of this material.

About the Author

Rodrigo Sanchez is a Senior Payments Product Manager at Silicon Valley Bank. He has oversight over SVB's virtual card and commercial card product offerings as well as major new product development initiatives.