Virtual credit cards, which are stored on a smartphone or other mobile device, exist entirely in the digital world.

This makes them less prone to fraud than physical credit and debit cards, argued Seth Goodman, chief revenue officer for New York-based Boost Payments, which processes commercial credit and debit card transactions.

The company has raised $38.1 million over multiple funding rounds and has around 100 employees, according to PitchBook. In a wide-ranging Feb. 5 interview, Goodman explained why virtual cards tend to be safer than traditional alternatives.

Editor’s note: The following interview has been edited for clarity and brevity.

PAYMENTS DIVE: What does Boost Payments do?

SETH GOODMAN: We view ourselves as a bridge in the industry between the accounts payable and the accounts receivable side. You have a lot of fintechs focused on AP automation. You have a lot of fintechs focused on AR automation. You have banks that are focused on AP generally, but we're one of the only companies that really focuses the connective tissue on both the AP and the AR sides, and that's really what allows us to do streamlining and automating. Over half the Fortune 100 are buyers or suppliers in our network.

How do virtual cards play into it?

We're integrated into every large bank and all the (payment) networks in the country. So anyone that sends a virtual credit card (we process that). We’re automating the process.

When you say you’re automating things, does AI factor into this process?

We deploy AI for validation, as a checker.

You mean you use it to check to make sure everything is OK?

Yes. We automate the acceptance of B2B credit card payments. We will parse virtual card emails. We'll log into portals. There's a lot of different ways that we capture all the card details in order to process it in automated fashion.

It sounds like a lot of this is about fighting fraud?

That’s a real focus for the institutions that we work with. I can tell you that from my experience, check fraud is off the charts. Fraud on corporate travel cards is really high. On virtual cards, we had no fraud.

Why would virtual cards be less prone to fraud?

One reason is that you put embedded controls on a virtual card. There’s an exact amount control. You’re issuing a one-off card for every single payment. If I'm paying you $137, it's just $137 on the card. If you then try to authorize it for $1,000, it's going to decline that.

We add controls on top of that. Everything we do is totally automated. A traditional virtual card gets emailed to a person's inbox. So you have more instances for friendly fraud and you have more exposure for bad actors intercepting or hacking into email boxes. But everything we do is automated. There's no human interaction.

Is there really no fraud on virtual cards?

Well I’m not going to say it’s zero, but it’s very low. Fraud exposure is in the low single digits.

If they’re safer, would you expect more people to use virtual cards in the future?

Yes, we're seeing very strong year-over-year growth. We're growing much higher than the industry as a whole, but the industry average is double-digits growth for virtual cards.