Finance

Virtual Credit Cards Reviewed for Canadian Small Businesses

Paul Sharpe, CPA, CA
/
August 15, 2022

Affiliate disclosure

This article will dive into the features, strengths, and drawbacks of some of the best virtual credit cards in the Canadian market.

Virtual Credit Cards for Small Businesses

We’ve reviewed several virtual credit cards in the Canadian market and we’ve chosen a few excellent ones to showcase. One of these could be a good choice for your business or personal use. 

This article will dive into the features, strengths, and drawbacks of some of the best virtual credit cards in the Canadian market.

What Are Virtual Credit Cards?

Whenever you use a physical credit card in-store, you provide your credit card information to the store through a card reader. The store uses that information to charge you for your purchase.

Virtual credit cards function similarly, but what’s the difference?

Virtual cards are best used for online purchases because of their additional layer of protection.  Instead of using your actual credit card information, your virtual credit card uses randomly generated information. It is still your credit card but the real information is securely masked.

This helps to protect your credit card information from data breaches and online scams. Plus, you can also limit the credit for each virtual card or restrict it to a specific vendor.

The Best Virtual Credit Cards in Canada for Small Businesses

Here are the virtual credit cards that we recommend for small businesses in Canada.

Float Visa

Float Financial Solutions Inc. is a fintech startup founded in 2019. Float offers prepaid corporate Visa cards with integrated spend management software. The Toronto-based company provides a Visa card that is backed by Peoples Trust.

Float Card Logo

Float Visa Cards are prepaid cards for businesses with integrated spend management software. 

Signing up is easy and doesn’t require any hard credit checks. Float will only ask for a few details to verify your identity. You can choose either the free or the premium version.

The physical Visa Cards function like traditional credit cards for in-store purchases. The tap-to-purchase feature will also be coming out in the very near future (August 2022 is what we’ve been told). 

Float’s intuitive spend management software is accessible through a web application or mobile app. It helps you manage and track purchases, automate your business spending, and create virtual cards. Account admins can create an unlimited number of virtual cards and team members can also request them when they’re required to make business purchases.

The integrated app sets Float Card apart from other credit card and prepaid card providers. The app can automate your accounting processes and integrate with popular accounting software. 

Float Visa has the following automation and integration options available:

  • Automated receipt reminders so cardholders won’t forget to upload receipts.
  • Automated receipt capture and matching that allows spenders to submit a photo of their receipts.
  • Automatic top-ups can be configured to streamline your finance processes.
  • Streamlined integrations with Quickbooks, Xero, and Netsuite. Import data to other software through manual CSV file export.

Float Credit Card Fees

Float’s free tier is tailored for smaller businesses that have fewer cardholders. The premium tier is made for businesses with more than five cardholders. 

The premium version unlocks advanced capabilities such as approval workflows and team management. You'll get access to unlimited physical cards as well.

Free - Essentials Plan

This Prepaid Visa has the following benefits:

  • Five physical cards
  • Unlimited virtual cards
  • Single-level spend approval workflows
  • No interest as it’s a prepaid credit card
  • 1% cashback for all purchases
  • Exclusive offers from partner stores, with thousands of dollars of savings available
  • No additional fees for foreign exchange transactions 
  • Integration with Quickbooks and Xero

$99/mo - Professionals Plan (with 60-day free trial)

In addition to the features in the Essentials plan, the Professionals plan have the following:

  • Unlimited physical cards in addition to unlimited virtual cards
  • Multiple spend approval workflows
  • Robust team management
  • Slack integration for your team
Float Card Fees

Float Credit Card Transaction Limits

Float Card operates on a prepaid model and does not have complicated fees and limits. All approved Float accounts have the same transaction limits outlined below. 

However, admins can still configure physical and virtual cards with custom limits lower than what is in this table. Admins can also limit transactions to specific vendor

Float Card Transaction Limits

Float Credit Card Promotional Code ($500 Cashback)

You will receive $500 cashback on your first $5,000 spent if you sign up now through our referral link here or use our referral code AVALON500 when you sign up.

Float Credit Card Summary

Float Card is our top pick from this list of virtual credit cards in Canada for businesses. It has been built specifically for businesses from the ground up. 

You have access to unlimited virtual cards even with the free version, which provides a lot of flexibility for businesses needing to make online purchases. The integrated spend management software streamlines payment workflows and automates expense reports.

The main drawback is that Float’s Visa Cards are prepaid cards. So, your spending limit is backed by (and limited by) your business’ bank account balance. This also means that your card activity will not affect your business’ credit score.

The $99 per month cost is more costly than the other products we’ve reviewed here. However, none of Float's competitors offer the same intuitive expense management feature that can be a huge time saver for businesses.

If you want to learn more about Float, check out our full Float Card review here.

KOHO Mastercard

KOHO Financial Inc. is a Toronto-based fintech company that was founded in 2014. The company has raised over $320M USD from leading investors around the globe. KOHO currently serves more than 600,000 users.

Koho Mastercard Logo

KOHO provides prepaid credit cards that can be used to make purchases both in-store and online.  It also includes a handy mobile app that allows you to track your spending with instant notifications, pay bills, create savings goals and access helpful financial tools.

It is also a savings account that you can use to earn 1.2% interest on your balance. It’s technically a bank account, but the savings account lets you send e-transfers and receive direct deposits. 

You can send and receive e-transfer transactions of up to $4,000. You may also use your account to receive direct deposits from your employer or government agency.

Both the regular and premium KOHO Mastercards provide a physical credit card that you can use for in-store purchases. Since KOHO cards operate on a prepaid model, you can withdraw funds from ATMs using the card as well. 

You can start using KOHO by downloading the mobile app both available for Android and iOS devices. Sign up and link your Canadian bank account to fund your KOHO account. Once done, you can instantly make your first purchase using a virtual credit card.

Your physical card will usually arrive within 10 days of account verification. Physical KOHO cards can be used to make chip-and-pin or tap-to-pay purchases. They can also be used for online purchases.

In case you don’t have your physical card with you, you can connect your Google Pay, Samsung Pay, or Apple Pay for contactless transactions.

KOHO Credit Card Fees

KOHO provides a regular account (free) and a premium account. There is also a joint account available that lets two people make purchases under the same account with separate cards. The joint account is limited to two people and only one joint account for each person.

KOHO lets you earn 1.2% interest on your entire KOHO balance. Your entire KOHO balance includes all your KOHO accounts (Spendables, RoundUps, Savings Goals). 

To start receiving interest on your balances, you’ll first need to set up direct deposit (usually from your employer) and then click “Earn Interest” within the app.

Free - KOHO Prepaid Mastercard

This Prepaid Mastercard has the following features:

  • No NSF fees
  • No purchase interest charges as it’s a prepaid Mastercard
  • 0.5% cashback for all purchases
  • Additional cashback from KOHO’s partner stores
  • 1.5% charge for foreign transactions
  • $2 to $3 ATM withdrawal fees depending on the ATM you’re withdrawing from
  • Earn 1.2% annual interest on your KOHO balance

$9/mo - KOHO Premium Prepaid Mastercard

They also offer a premium credit card that has everything in the free version plus:

  • 30-day free trial
  • 2% cashback on groceries, food, and transportation
  • 0.5% cashback on everything else
  • Zero foreign transaction fees
  • One free international ATM withdrawal per month

KOHO Credit Card Transaction Limits

KOHO sets different transaction limits for different kinds of transactions. Direct deposits, inbound e-transfers, outbound e-transfers, and others have their own limits.

Koho Mastercard Spending Limits

KOHO Credit Card Promotional Code - $20 Cashback

Sign up using our link here and receive $20 cashback when you fund your account.

KOHO Credit Card Summary

KOHO Prepaid Mastercard is a good choice for individuals or small businesses that only need basic prepaid card features. 

As a personal prepaid credit card, KOHO Mastercard has high load amount limits that could be helpful for making business-related purchases.

The 0.5% cashback in the free version is lower than the Float Card’s 1% cashback. However, Koho allows you to earn 2% cashback on groceries, food and transportation purchases. These categories likely better suit personal use over business application. 

STACK Prepaid Mastercard

STACK was founded in 2017 and was acquired by Credit Sesame, a US-based credit and loan company in 2020. 

It is the first to provide vertical cards in Canada, displaying STACK’s forward-thinking approach to the finance market. Vertically designed cards show the modern and natural way people use cards in tap-to-pay purchases. 

The Toronto-based company is in partnership with Peoples Trust to provide the STACK Prepaid  Mastercard. 

STACK Mastercard Logo

STACK offers a zero-fee Prepaid Mastercard and currently does not offer any premium / paid alternative. Instead, STACK aims to be an alternative to traditional banking.

 You can sign up easily without a hard credit check. Go to the STACK website or download the Android or iOS mobile app to get started.

Your STACK account is accessible through a mobile app with convenient features. The app’s intuitive design lets you easily monitor your spending.

STACK Financial Application UI

STACK does not offer a cashback program for purchases. Instead, there are promotional discounts from its partner stores that are updated regularly. The app lets you know the latest rewards from partner stores.

Your virtual card is accessible through the app and can be frozen easily if you suspect online fraud. Your physical vertical Mastercard usually arrives within 10 days of successful signup. Physical cards have a contactless chip for you to use in-store where tap-to-pay and Mastercard are accepted.

The app also integrates with digital wallets. You can connect your Apple Pay, Google Pay, Samsung Pay, Garmin Pay, or Fitbit Pay in case you don’t have your physical card on hand. I’ve never met anyone who uses Garmin Pay or Fitbit pay, but they are both offered in the event that you do use one of them!

STACK Credit Card Fees

The STACK Prepaid Mastercard is free of monthly or annual fees.

Free - STACK Prepaid Mastercard

  • No purchase interest as it is a prepaid credit card
  • Varying promotional discounts at over 140 partner stores
  • 2.5% charge for foreign transactions. STACK will waive these fees on purchases up to $1,000 if you spend a minimum of $350 per month
  • No STACK specific ATM withdrawal fees (private ATMs may still charge you)

STACK Credit Card Transaction Limits

STACK’s maximum allowed card balance is $20,000, but daily transaction limits at point of sale terminals are limited to $5,000.

STACK Mastercard Transaction Limits

STACK Credit Card Summary

STACK Prepaid Mastercard is an innovative product that can be used for both personal purchases and for small business purchases. If you are looking for a completely free prepaid spending account, STACK is an interesting choice.

It helps you limit your spending, save a few dollars if you make use of the partner store discounts posted in the app, and it integrates with your favourite digital wallets.

However, if you are looking for a more versatile business credit card, Float is still likely a better option. 

Wealthsimple Cash Card

Wealthsimple Payments Inc. is a Canadian company founded in 2014. It now has $15 billion of assets under its management and serves more than 2 million users.

Wealthsimple Cash Logo

Wealthsimple is Canada’s largest automated investing service that offers a variety of investing accounts, a tax-filing platform, and a prepaid spending account.

Wealthsimple Cash is a prepaid Visa card backed by Peoples Trust. It has no monthly fees, foreign exchange fees, ATM withdrawal fees, or purchase interest.

Setting up your Wealthsimple Card takes only a few minutes. Download the app on the App Store or Google Play Store and sign up. Add funds to your account and you can start spending using a virtual card right away. Your virtual card can be linked to your favourite digital wallets such as Apple Pay, Samsung Pay, and Google Pay.

On your Wealthsimple app, you can request a physical card that should arrive within 7 business days. The app also lets you lock your virtual and physical cards in case of loss or a suspected data breach.

Wealthsimple Cash has a 1% cashback for every purchase which can be credited back to your spending account. You can also choose to invest it in stocks, exchange-traded funds, or cryptocurrency through Wealthsimple’s investment platform.

Wealthsimple Credit Card Fees

There are no monthly or annual fees with the Wealthsimple cash card. Wealthsimple makes money through its other financial products like its investment platform.

Free - Wealthsimple Cash Prepaid Visa Card

  • No purchase interest as it is a prepaid Visa card
  • No additional foreign exchange fees (Visa may still charge for currency conversion fee)
  • 1% cashback for all purchases
  • No additional ATM withdrawal fees (ATM vendors may still charge a fee)

Wealthsimple Credit Card Transaction Limits

The card allows you to spend funds directly from your Wealthsimple Cash account, so the card’s maximum balance depends on your Cash account.  Specific transaction limits are shown below.

Wealthsimple Cash Transaction Limits

Wealthsimple Credit Card Summary

Wealthsimple Cash Prepaid Visa Card is a straightforward charge-free spending account. It provides the flexibility of making purchases with a Visa card. It can also help you save money through the 1% cashback program and zero FX fees. 

If you are interested in investing, you might want to check out Wealthsimple’s unique investment program. It allows you to invest your cashback rewards either into stocks, exchange-traded funds or cryptocurrency.

The drawback with Wealthsimple Cash is the maximum deposit amount is only $10,000. Those needing to make larger purchases may want to consider other options. 

Overall, Wealthsimple is a competitive choice among fee-free spending accounts in the market. We recommend it more for personal spending or sole proprietors with a smaller business.  It’s also a good option if you’re already investing through the Wealthsimple platform.

Neo Card

Neo Financial is a newer company that was founded in 2019 and already shows promising growth. The Calgary-based company is now valued at $1 billion CAD and serves over one million customers in Canada. 

Neo Financial Logo

Neo offers a credit card, savings account, investment management account, virtual mortgage solution, and Neo Business, a partnership program for businesses. Neo Business allows retailers and service providers to provide loyalty programs as a marketing tool.

One of Neo’s products is the Neo Financial Mastercard, a credit card solution with two available options: Standard Credit and Secured Credit. 

The “Standard Credit” is a typical credit card for those with high credit scores or those who own more than one credit card. It means that you can only be approved for their Standard Credit product by allowing them to do a credit check first.

On the other hand, applying for the “Secured Credit” version does not include a credit history check. Instead, you will be approved when  you can provide a “security fund.” The security fund acts as a payment guarantee. The amount of your security fund also acts as your credit limit for the card.

The Secured Credit version may look like a prepaid card but it’s not. Prepaid credit cards typically don’t affect your credit score but the Secured Credit does because it is a true debt instrument.

This also means that Neo Cards charge purchase interest if the credit card balance has not been paid on time.

The Neo Card has an integrated mobile application where you can manage your physical and virtual cards and view detailed spending insights. You can also add your virtual card to your Apple or Google Pay wallet for easier spending.

Neo Financial App UI

Neo Credit Card Fees

The Neo Standard Credit Card and Secured Credit Card have similar fee structures. Standard Credit requires a higher credit score for you to be approved for the card. In contrast, the Secured Credit only requires a security fund with a minimum balance of $50 to get an equal $50 credit limit. Both cards have no monthly or annual fees.

Free - Standard and Secured Credit Neo Financial Mastercards

  • Annual Purchase Interest Rates: 19.99% - 24.99% (charged if the balance isn’t paid each month)
  • Annual Interest Rates for Cash Advances: 22.99% - 26.99% 
  • Because it is a true debt instrument, you will build credit by using the card for purchases
  • 2.5% foreign currency conversion fees
  • Guaranteed 1% cashback for all purchases (up to $5,000)
  • 4-6% unlimited cashback at over 7,000 partner stores (depending on your rewards plan; see below)

Neo Credit Card Reward Plans

What we’re also going to address below is the rewards plan of each Neo Financial Mastercard. Each plan has a different cashback program for different kinds of spenders. 

The paid plans have a boost feature that is activated upon return visits to certain businesses. There are also bonuses available for first-time purchases at certain businesses.

Cardholders can choose the free rewards plan or can pay a monthly fee to activate additional rewards options.

Free - Standard Rewards Plan

  • 1% cashback for all purchases (up to $5,000)
  • Average 4% unlimited cashback at over 7,000 partner stores (varies per offer and partner)
  • Recommended for those who spend less than $750/month

$2.99/mo - Plus Rewards Plan

  • 1% cashback for all purchases (up to $5,000)
  • Average 5% unlimited cashback at over 7,000 partner stores (varies per offer and partner)
  • 1.25x boost on bonuses and partner offers (depends on card use)
  • Recommended for those who spend $750 or more per month

$8.99/mo - Ultra Rewards Plan

  • 1% cashback for all purchases (up to $5,000)
  • Average 6% unlimited cashback at over 7,000 partner stores (varies per offer and partner)
  • 1.5x boost on bonuses and partner offers (depends on card use)
  • Recommended for those who spend $1000 or more per month

Depending on where you make purchases and how much you spend, it might be worth opting for the paid tiers.

Neo Credit Card Transaction Limits

For a Neo Standard card, there is a set credit limit. The limit is decided by various factors including credit score, credit history, and current credit use. 

For the credit builder, the amount you transfer into your Security Fund is what your credit limit (up to a maximum of $10,000).

Neo Financial Transaction Limits

Neo Credit Card Summary

Neo Financial Mastercard is a good option for individuals or small businesses looking for a standard-model credit card but without monthly or annual fees. 

One drawback here is that Neo Card is a standard credit card with interest charges that apply when you carry a balance.  There are also high rates charged on cash advances through the card which is similar to most traditional credit cards. The Neo Financial Mastercard also impacts your credit score for better or for worse depending on whether you pay the balance on time or not.

If your business needs a cashback credit card that helps to build a credit score, Neo Card is certainly worth a look.

Article by
Paul Sharpe, CPA, CA
.
Originally published
August 15, 2022
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