4 min read
Key takeaways
- Large organizations with multiple departments or suppliers often use ghost credit cards to simplify spend tracking, set spend limits and shield a master credit card from exposure.
- A ghost credit card is a payment method that is tied to a specific department within a company or to a specific purpose or vendor, rather than to an individual person.
- The business providing the card to its employees or its vendors can set spend limits.
- Ghost credit cards have certain benefits, but they also have drawbacks. Businesses should also explore commercial card alternatives to find the best fit for their organization.
Corporate card programs are known for their far-reaching financial, operational and security benefits. These include enhanced spend processing and control, fraud protection and a smoother employee experience. Corporate cards can be physical or virtual.
“Ghost card” is a common term for a digital payment method that is tied to a specific department within a company or to a specific purpose or vendor, rather than to an individual employee. Other terms for this card type include “lodged card” and “central travel account.”
Find out more about what ghost cards are and how they work, plus some of their benefits and drawbacks, and attractive alternatives.
What is a ghost card?
A ghost card is a credit card that a company assigns to a specific department or designates for payments to a specific vendor. Ghost cards today are often digital, with no physical card, instead using a generated 16-digit card number. This makes it easier for companies to track spending per department or vendor. Ghost card users are typically large organizations with multiple departments or suppliers.
Sometimes, the term ghost card is used interchangeably with virtual card. The industry has not yet settled on universally accepted definitions for either card, leading to different interpretations across different institutions. Here, we’re drawing a key distinction between the two based on their flexibility and functionality.
For us, ghost cards typically refer to cards shared by multiple users within a department or for a specific vendor, offering a degree of centralized control. Virtual card programs, on the other hand, encompass a broader range of digital payment options, including both single-use and reusable payment solutions.
How do ghost cards work?
Even in their modern digital-only form, ghost cards still essentially function as the card “kept in a drawer”—shared among a department’s employees or kept on file by a vendor whenever they need to use it for business payments.
When a company distributes multiple ghost card numbers, all of those numbers operate on the same credit account, often subject to a spending limit. The business is responsible for the overall balance.
Benefits and risks of using ghost cards
Ghost cards have both advantages and drawbacks. Here are some of the perceived benefits:
- Because the card number doesn’t change, ghost cards can be used for recurring payments
- They offer a degree of separation from a parent credit account
- Ghost cards may reduce some paperwork associated with advance spend approvals
- They can provide spend visibility at the department or vendor level
But those benefits come at a cost. For example:
- The shared, reusable nature of ghost card numbers inherently increases their exposure to potential misuse or fraud
- Shared cards don’t identify the specific individual making a transaction, potentially complicating vendor interactions and internal expense tracking
Alternative credit card options for businesses
For businesses considering ghost cards, a virtual card program offers the best of both worlds: The flexibility you’re seeking, but with enhanced security and control. The J.P. Morgan Virtual Card can address the limitations of ghost cards while providing a more versatile solution for modern business needs.
With a virtual card program, you get:
- One-time-use card numbers for more security in single transactions
- Reusable virtual cards for ongoing vendor relationships or departmental spending
- The convenience of ghost cards with less of their associated risk
- Greater protection against fraud
- Increased working capital
This versatility allows your company to tailor a payments strategy to your specific needs, whether for one-off purchases or recurring expenses. The J.P. Morgan Virtual Card comes with advanced features that surpass traditional ghost card capabilities, such as:
- Stronger spending controls
- More detailed transaction reporting down to the individual user level
- Seamless integration with accounting systems
Ghost card or virtual card functionality is just one part of a broader payment strategy. Businesses should carefully consider the best type of commercial card for their needs. In addition to Virtual Cards, J.P. Morgan offers a variety of commercial cards to help companies organize, manage and automate payments with versatile controls and robust reporting:
- One Card may be ideal for companies interested in simplifying their card programs for all types of spend, including travel, entertainment and procurement
- Corporate Card lets employees travel and pay for expenses seamlessly while giving employers controls and spend visibility
- Purchasing Card, also called a procurement card or p-card, can help optimize vendor payments, reduce misuse and fraud, and provide an alternative to paper-based payments
We’re here to help
J.P. Morgan’s corporate credit card solutions can help you efficiently manage procurement and travel expenses with versatile card controls, online functionality and data integration with your accounting system.
Our experienced payment specialists can help you design and implement your optimal corporate credit card program.
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