Traditional credit card providers offer virtual cards for budgetary purposes. They provide business owners with an easier way to budget and control spending by allowing employees to use a virtual card to purchase inventory, pay invoices, make on-demand payments, cover travel expenses, buy office supplies, or pay for other business obligations that can be paid with a credit card. Advertisers need virtual cards too, but for different reasons.
Brands spending millions of dollars every year on advertising frequently run up against the standard terms of service networks like Google, Facebook, or TikTok require when advertising on their platforms. Advertisers spending anywhere from $10,000 a day, to $100,000—or even a million dollars in a single day can run into caps on their spending limit in the middle of a profitable ad campaign, causing their credit card to be declined. A declined, or failed, credit card can have dramatic consequences for a media buyer or ad manager trying to maximize their ad spend.
When a network temporarily, or even permanently, shuts down a credit card account, the network also bans the payment source associated with that account. In addition to disputing a wrongful termination of their account, the merchant now has to request a new card from the card issuer, which could take anywhere from a few days to several weeks to get a new payment source attached to the ad account.
“We bank with Chase and had a normal Chase credit card with a $100,000 spending limit. We would sometimes spend more than $100,000 a day in online marketing,” says Sean Frank of Ridge Wallet. “To keep our ads running, we were paying off the balance every day and had to switch to a debit card over the weekend so the card wouldn’t get declined. Chase doesn’t process credit card payments on the weekend, so this was the only way we could ensure our ads kept running; because we were spending so much.”
This is a pretty common problem that causes a lot of eCommerce merchants to get creative with how they address the problem.
“It took four cards, at $250,000 each (Bank of America’s highest spending limit), to reach the million dollar credit line I needed to keep campaigns active through the month,” said Wagner. “I would use a card up to $250 K and then that particular card would become dead to me until the payment cycle was completed. I’d go through each card like that until the end of the month. It worked pretty well until last year when even that wasn’t enough.”
Multiple Cards And Multiple Accounts
It doesn’t really matter if you’re managing all your digital advertising in-house or using an agency, many direct-to-consumer (DTC) brands leverage multiple accounts for each product line to optimize network algorithms at the product level. However, ad networks sometimes decline cards on file with another ad account or if the card authorization data doesn’t match up perfectly with the brand (company name, address, zip code, card number, etc.). For example, if the ad account is generated from a different address than the company home address (like an agency address) it could be declined. Because of this, another need of multi-product DTC brands is often virtual cards for each ad account, network, agency, and product line.
“The way we run our ads is pretty complicated because of the way Facebook's algorithm works,” said Jim Crimella, media buyer and Director of Internal Brands at ShineOn. “We run one product, one pixel, and one URL for every ad. If you want to run 10 products, you need to do that for each one of them or you run the risk of topping out your spending limit and bringing the whole thing down.”
Traditional banks and card providers just don’t think in these terms when authorizing virtual cards. With that being said, the last thing an advertiser wants is an arbitrary-feeling spending cap on their virtual cards; or be required to go to the finance department every time they need a spending increase approved. They don’t want a spending cap or a card failure to put the brakes on a successful ad campaign.
“I’ve spent years of my life refreshing my phone every five minutes to make sure my ads were still up,” he added. “One time, while waiting in a line at Disney World with my family, I had to make a mad dash to the hotel to find out why my ads went down.”
The solution is a card authorization process that allows cardholders some flexibility to create congruence between the name, zip, and address on file with the ad networks at the account level. If a merchant has multiple brands and products with multiple ad accounts, the authorization may not always match up. Google and Facebook payment rules want to see a unique card number, company name, and contact information for every ad account. If your card authorization doesn’t happen at the card level, so you can use unique identifying information for each new card, you’re going to have network issues.
One of the reasons traditional card providers treat this the way they do is to mitigate fraud. In fact, it’s not unusual for your increase in ad spend to be considered “unusual activity” resulting in your card being declined. Because they don’t understand how online merchants advertise, this treatment can have a negative impact on your business’ ability to successfully advertise.
If you’re interested in seeing how a dash.fi card could benefit your eCommerce business, visit dash.fi.
