We are living in the digital age, and this space has evolved almost all the spheres of our lives, even the way we manage our finances. Virtual credit cards, or virtual versions of the standard plastic card, is one of the greatest innovations of this space. If you ever find it clumsy to pull out your physical credit card for online purchases, you will appreciate virtual credit cards, which offer a more convenient and secure alternative.
WHAT EXACTLY IS A VIRTUAL CREDIT CARD?
A virtual credit card is essentially an electronic version of your physical credit card. However, what really separates it is how it was created for security purposes. These cards produce unique, temporary numbers for every transaction. This keeps your real details about the credit card hidden whenever you make some purchases online.
Corporates are also adopting virtual credit cards for their employees. The application of virtual credit cards can be applied in a corporate environment, which enables close oversight over corporate expenditures. Thus streamlining financial control.
THE MECHANISM BEHIND VIRTUAL CREDIT CARDS
You’ll obtain a card on your device with card numbers, the security code, and an expiration date. All this is pretty much as one would receive a physical card. Different with virtual credit cards, though, is that their card numbers often expire with each use. Thus keeping unauthorized users at bay.
Virtual card numbers do not change automatically as is the case when one is using an actual credit card with different numbers. However, you are allowed to lock or deactivate the card at your discretion. It is relatively simple to use virtual credit cards for online transactions—you just need to input your card details at the point of purchase and the transaction will go through similarly as it would with the physical card. Such transactions will be on your credit card statement, so you can track them seamlessly.
Virtual credit cards, although basically used for an online transaction, can also be availed of by certain merchants through their digital wallets for a real-time transaction.
ADVANTAGES OF USING VIRTUAL CREDIT CARDS
Virtual credit cards come with immense benefits over other alternatives that have also drawn excellent advantages to consumers as well as business establishments and are described below:
1. Enhanced Security
- Virtual credit cards have an added security feature while using temporary numbers, thereby protecting your financial information from any type of breach.
2. Convenience at Your Fingertips
- Say bye to thrashing through your wallet—virtual credit cards make shopping online faster and more convenient.
3. Global Usability
- Virtual credit cards can be used for both domestic and international transactions, just as the case for physical credit cards.
4. Credit Limit Flexibility
- Any unused credit limit for your virtual card usually gets transferred to your physical card, maximizing the amount available for spending.
5. Efficient Expense Tracking
- For companies, virtual credit cards provide live information of just how those companies are spending and allow them to enhance their cost control.
6. Streamlined Accounting
- Virtual credit cards are very easy to integrate with accounting and ERP software, and so bookkeeping can be easily done.
7. Quick Issuance and Deactivation
- Virtual credit cards may be issued and retracted quickly, and this is also an additional security feature without the incidence of loss or theft.
POSSIBLE DRAWBACKS TO CONSIDER
Although virtual credit cards have numerous benefits, they also carry some drawbacks:
- Refund Complications: If you try to return a purchase that you had made through a virtual credit card, the main problem is after the credit card number has expired. Under such circumstances, store credit might be useful.
- Verification Issues: When you’re asked to verify your card details after some purchase or other transaction, you may get into some trouble when trying to locate the unused virtual card number that has expired.
- Limited Availability of Features: In some countries, you can link virtual credit cards to digital wallets and use the card at a physical store, but maybe not elsewhere.
SELECTING THE RIGHT VIRTUAL CREDIT CARD PROVIDER
When choosing a provider for your virtual credit card, consider the following:
1. Start with a Physical Credit Card
- Get a physical credit card, in case the virtual cards are only enabled for online transactions and cannot be withdrawn at the ATM counter.
2. Payment Network Compatibility
- Ensure that the virtual credit card would run on the most accepted payment networks, including Visa or Mastercard.
3. Seamless Integration for Businesses
- If you are running a business or organization, then ensure that your company offers an easy integration of virtual credit cards with your organization’s existing financial applications.
CONCLUSION
As the world continues to take steps toward a cashless society, virtual credit cards make safe and convenient alternatives to traditional ones, be it personal or business. Virtual credit cards offer flexibility and security in today’s digital economy.
Consider Reading – THE IMPLICATIONS OF CREDIT CARD DEFAULT