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What Is a Virtual Phone Number?

Updated Jul 31, 2023

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Every organization needs a secure, reliable business phone system to communicate with customers, employees, prospects and vendors. But for small businesses, full-featured types of business phone systems can be expensive and challenging to implement. A virtual phone number, also known as direct inward dialing, is a cost-effective and feature-rich solution that will expand your business’s communication capabilities. If you’ve ever used FaceTime or called a corporate contact center for product support, chances are you were connected through a virtual phone number. 

Here’s a look at everything you need to know about virtual phone lines.

What is a virtual phone number?

A virtual phone number is a telephone number that isn’t tied to a specific device or location. Using Voice over Internet Protocol (VoIP) technology, virtual phone numbers let people make secure phone calls from anywhere with a solid internet connection.

>> Learn More: What Are VoIP Business Numbers?

An administrator can assign a virtual phone number to nearly any area code and device, offering your organization a wide range of options when giving corporate phone lines to employees. You can implement virtual phone lines without purchasing any additional equipment. You won’t have to pay for long-distance calls, and you’ll enjoy clean, clear audio from anywhere in the world. 

Since virtual phone numbers use VoIP, and VoIP requires a broadband internet connection, many internet service providers (ISPs) offer virtual phone services with multiple lines. These systems often come with a lower total cost of ownership (TCO) than a landline, allowing an entire team to speak to clients globally without using traditional telephone networks.

Editor’s note: Looking for the right phone system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

How do virtual phone numbers work?

Anyone with a desktop computer, laptop or mobile device can use a virtual phone number. A virtual line sends a call to another device over the internet by converting the audio from a phone line into a digital signal. These virtual lines are created and used in the cloud, rerouting calls to existing lines or to team members’ devices. 

>> Learn More: Cloud-Based Business Phone Systems

For example, an administrator could create a virtual toll-free number (or an international toll-free service number for a global presence) that forwards calls to individual team members’ devices in a contact center. For added flexibility, representatives can either use a handset or an application like Zoom or RingCentral, which routes calls to their desktop computer. 

TipBottom line

Read our reviews of the best business phone systems to understand better the services that might be right for your business.

Virtual phone systems rarely become overwhelmed because a virtual phone number uses the cloud and can be created as needed. Since virtual phone calls don’t drain too much data, bandwidth concerns aren’t really an issue. 

Think of a virtual phone number as an intermediary for voice communication between two devices.

Traditional phone lineVirtual phone line
Requires a dedicated deviceWorks with smartphones and computers
Tied to a specific locationCan be used anywhere
Requires a SIM cardEasy connections over the internet

>> Learn More: VoIP vs. Landline

8 benefits of virtual phone numbers

Virtual phone numbers offer eight primary benefits that might appeal to your business. We’ll take an in-depth look at each. 

1. Virtual phone numbers incur lower costs.

One of the most significant benefits of virtual phone numbers is that they offer a much lower TCO than traditional landlines. When choosing a business phone system, you’ll find that traditional system costs quickly add up and become prohibitive, especially if your business is growing. 

>> Learn More: Benefits of VoIP Business Phone Systems

Because a virtual line doesn’t require specialized or dedicated devices, your hardware costs are virtually nothing. And when you’re moving a business into new communities or regions, you can create a local number to avoid the added costs of long-distance calls. It’s essential to keep operating expenses as low as possible when opening your business to new opportunities and clients; virtual phone numbers can help you do this.

Did You Know?Did you know

Another helpful virtual small business tool is a virtual answering service, which provides an automated response or directs calls to a third party that can forward calls and take messages.

2. Virtual phone numbers serve multiple markets.

Because anyone can get a virtual number for any location, you can create local numbers to serve any region. This decreases costs because you’ll avoid premium charges from long-distance calls as you find new neighborhoods and clients to serve. 

3. Virtual phone numbers are easy to scale.

Without the need for dedicated hardware and with no line limitations, creating more virtual phone numbers to scale with your business is easy. When you’re building a sales team and hiring more employees, you can call your administrator and add all the virtual phone lines you need.

4. Virtual phone lines allow for custom numbers.

When you have a memorable or toll-free customer support phone number, your customers gain a sense of security and recognition. Virtual phone numbers make it easy to create specific numbers to help your business look more professional. 

Whether it’s a toll-free number or a vanity number like 1-800-CONTACTS or 916-CALL-TUR, a virtual number can help create a brand identity. 

5. Virtual phone numbers allow for optimized call data and tracking.

It’s not easy to record, digitize and analyze a traditional call. But because a virtual call is already digital, it’s easy to record with the push of a button. You can seamlessly transcribe a virtual call, appraise it for relevant content, and archive it. 

>> Learn More: Network Optimizations for VoIP

With all the information a virtual number provides, a business can track key internal performance indicators, such as average call length and customer satisfaction, to improve its services.

6. Virtual phone numbers enrich your customer information knowledge. 

With an easy way to archive phone calls, a business that uses virtual phone services can quickly compile critical know-your-customer (KYC) information, such as customer preferences and overall business trends. This kind of data helps an organization prevent fraud and comply with multiple government rules and regulations. 

Compliance is a particularly important factor for businesses in the banking, financial services and insurance industries that rely on verifying a customer’s identity.

7. Virtual phone numbers improve security.

Creating a safe, secure phone line to conduct business is easier than ever with a virtual phone number. Because it uses VoIP, a virtual number can be encrypted and protected behind layers of firewalls and other security methods. These protections keep out prying ears, so you can keep your business running smoothly without interference. To ensure security, reach out to your ISP to ensure your virtual number is encrypted.

>> Learn More: Looking for a Business Phone Number, but Not a Business Phone?

8. Virtual phone numbers improve flexibility. 

Because you can tie a virtual number to any PC or mobile device, you can receive calls from anywhere in the world. This allows your workforce to redirect calls to their preferred device. When traveling or working remotely, any employee can still answer a support call or call back sales prospects.

FYIDid you know

A secure communications system helps keep remote employees engaged, motivated and productive.

How to get a virtual phone number

It’s remarkably easy to set up a new virtual phone number; some service providers, such as Google Voice, even offer it for free. To get started, select a provider like RingCentral, Ooma or GoToConnect. Then create an account, select a plan, choose your area code, and the service will generate a new number for you. For more information, check out our review of RingCentral, our Ooma review and our GoToConnect review.

Virtual phone number FAQs

Here are some of the most common questions on virtual phone numbers and how they work. 

Can you make and receive normal calls with a virtual number?

Absolutely. A virtual phone number works perfectly with regular phone lines. The only difference is how those calls are transferred. A virtual phone line is digital, while traditional phone numbers use a private branch exchange architecture with limited functionality. 

>> Learn More: What’s an Interactive Voice Response or IVR?

Can you have multiple virtual numbers?

Yes. You can assign multiple virtual phone numbers to an individual user or assign multiple users to a single virtual phone number. This allows additional flexibility for a company to automatically reroute numbers – which comes in handy when multiple simultaneous calls overwhelm a contact center. 

How much do virtual numbers cost?

Many service providers offer free virtual phone numbers. For paid services, costs range from $19.99 to $59.99 per month, depending on how many phone lines you need. 

Eduardo Vasconcellos
Contributing Writer at
Eduardo Vasconcellos is a veteran copywriter, creative content producer and marketing communications specialist with over two decades experience, able to take complex concepts and turn them into something simple and memorable. By focusing on customer psychology and product benefits, his specialty is crafting full marketing campaigns that follow industry best practices while authentically speaking to a customer’s need.
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