Arecent survey by security.org found that globally 65% of the debit and credit card holders have had a fraudulent charge on their account at least once. The option for a virtual card provides users with an additional layer of protection. It improves the security of account holders especially while making online purchases by means of preventing sensitive details from falling into the hands of criminals. Many major credit card issuers provide virtual cards.
Let us discuss in detail what is a virtual card, how do they work, how to request one, among others.
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What is a virtual card and how does it work?
Virtual cards are a digital version of your physical card. It is a unique card number that is generated in a digital format and is associated to your account. They generate a unique credit card number for you to use in place of your physical card number, preventing the merchant from storing your card information and keeping your financial data more secure. They are generally intended for one-time use. So, even if a company with whom you have done business with falls victim to a data breach and your card number is retrieved, your actual account would not be compromised.
Advantages and limitations
Many virtual cards permit the users to set a time limit, after which they expire. This can be helpful if the user wants to use a card only for a specified period of time. Many also offer spending limits, which can help the users to stick to a budget. Most card providers make it easy to access the virtual card so that one can check out quickly, without searching for the card through their physical wallet. Of course, virtual cards come with certain associated limitations.
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For instance, if the card holder is shopping in a store, he/she may not be able to use your virtual card unless the point-of-sale (PoS) system accepts digital wallet checkout options. If you use a virtual card to book a hotel room, it may be hard to reconcile your payment method when you check in. Most hotels request a physical card when you arrive, so using a virtual card may require extra verification, such as calling your bank, etc. Virtual cards have not yet fully rolled out across all major card brands, which means your favourite credit card might not offer this feature.
How to get a virtual card?
Major banks such as SBI, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Axis Bank, HSBC, etc. offer virtual cards. But, one need to have a physical card from the bank before requesting for a virtual card. One can request a virtual card by logging into their account online, either via the web or bank’s app and search for the virtual card or virtual card number settings option. Depending on the card issuer, one should be able to generate a temporary card through either their online portal or app. Upon generating virtual card, one could modify some settings such as the spending limit or expiration date, etc. and then start using that number to make purchases online or via the card app.
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Virtual Card Vs Digital Wallet
A digital wallet operates similarly to a virtual card, but there are some noteworthy differences. For instance, Google Pay stores a digital version of your physical credit or debit card, with the exact card numbers. Generally, digital wallets are not accepted in all online purchases where certain services such as hotel bookings can be availed through credit cards. Digital wallets can be used only at participating retailers whether in-store or online.
To conclude, virtual cards provide an additional layer of security by masking your physical card number with a temporary account number. However, virtual cards are not completely fraud-proof and users should adhere to the regular safety protections.
