As the world is evolving towards a digitalized economy, we have been introduced to so many virtual payment methods. This modern economy makes it convenient for us to do our daily spending without needing to bring along extra cash around. Not only it is safe and secure, but it can also save us from any unwanted negligence that we could cause.
With the existence of credit card, we don’t really have to withdraw cash from the bank anymore. Just a single swipe, everything is good to go. It saves a lot of hassle for both merchants and buyers to have a quick transaction process.
Although the credit card payment is widely used, it is still at risk of fraud and hacking. For online purchases, we would often key in our credit card information to complete the payment transaction. We can’t say online transactions are 100% safe, it’s always open to vulnerability. Is there a way to keep our cards safe?
This is when virtual credit cards come in handy. Virtual credit cards are said to help solve the security problems that are often caused by physical credit cards. Here’s everything you need to know about virtual credit card.
What is a Virtual Credit Card (VCC)?
As the name suggests, it is not like the usual credit card that you hold and put inside your wallet. It still carries the same purposes of a normal credit card, which allows you to buy or purchase any items of your choice conveniently.
Virtual credit card (VCC) is like a prepaid online card that is not physically issued by the bank. It has a set of numbers associated with your actual credit card. Up to your own preferences, you can simply set your own credit limit and expiration date to your virtual credit card to protect your transaction.
Depending on the options offered by the bank and the decision made by the user, a virtual credit card can be used for single or multiple transactions. Typically, most virtual credit card users would set for single use with one merchant for a specific purchase.
When you use a virtual credit card, the merchant will process it similarly like the physical credit card. What makes it different that you will see the charges on your bill, but the merchant does not have your actual credit card number. This technically makes you have a more secure and personalised transaction to pay for the things you want to buy online.
You can load a specific amount of money into your virtual card in advance. Be reminded that it can only be used for an online transaction. Like a physical credit card, you will be provided with the card number, expiration date as well as the CVV code.
VCC provides merchants with unique data, which means that every time a payment is made, the verification details are different. The system adopted by VCC offers users with safety and security benefits.
How does a virtual card work?
A virtual credit card works exactly the same as the physical credit card, except that you don’t use it at the physical store when you purchase an item. When you are given access to a VCC, you get to do a “checkout” process every time you do an online purchase.
Instead of swiping the card and type in the passcode, the transaction process can be done by copying and pasting the virtual card information which can only be used once. Virtual cards use an application to create a new and unique credit card number for every single transaction.
Despite being used in the transaction, that unique card number can never be used again. Unlike the normal credit card which has all the static data printed on the card, the VCC details valid only for one-time use. Therefore, the fraudsters will not have the slightest chance to do fraud and steal your credit card details.
There is also another option for recurring use, which works when you register your VCC for the length or period of your subscription. The fraud risk is still low, so you can keep your payment for any services for as long as you need.
Why would people tend to use virtual credit card?
Virtual credit cards have proven to reduce the potential of credit card fraud. The main benefit is the ability to close the account easily. Unlike the physical credit card, if it gets stolen or lost, you would have to cancel and reissue the number. This directly can lead to issues with every merchant you’ve set up your recurring payments with. But with VCC, its features allow you to retain your main credit card active while closing your virtual card details.
Not only that, if your focus is to limit your spending, a virtual credit card can assist your usage on a specific purchase and value. Once the limit is reached, you will not be able to make any more transaction or purchases with the VCC account number. Again, VCC users will feel even more secure as once the limit is fully utilised, the potential to have your credit card misused by the hackers is lesser.
How to apply for a virtual credit card?
The application process may differ according to the country that offers virtual credit cards. The first thing you need to do is to contact your bank to create a card and provide them with all the required details. Don’t worry if you already have an existing card, it can also be used to apply for a virtual credit card.
After you’re done with the initial steps, you will be provided with a 16 digit virtual credit card number. You can top-up the card with the amount you desire to make payment. Once you’ve made the payment, the amount will be credited from your account.
Validity - The virtual credit cards usually last for 24 to 48 hours, it depends on the bank. It will expire on its own after it passes the expiry date. Users are only allowed to make one payment through virtual credit cards.
Usage - Users have the option to use the entire amount or only a portion of it. The balance will be credited back to the users’ bank account, with no additional service charge.
Where can I get a virtual credit card?
There are two ways on how where you can get your virtual credit card. The easiest way to earn your virtual credit card is directly from the bank. If you have a credit card issued by the bank that offers this service, you can sign up for the virtual credit cards easily. Another way is to link a pre-existing credit card from another bank to an online service.
Do check with your respective banks if they offer virtual credit card services
It will be worth to activate your virtual credit cards to have security protection on your credit card details. The possibility of getting caught in a data breach can also be avoided as the extra measure offered by virtual credit cards are always safe.