Credit cards have become a part and parcel of an individual’s life. In the last few years, credit cards have taken an essential place in our lives as they come in handy and fulfill every monetary need. In times of emergency when we run out of cash, credit cards play a crucial role and help us deal with such situations. However, as the use of credit cards increases, so do the frauds related to them. Therefore, to deal with all such situations, a virtual credit card exists that protects an individual from any such fraud. Also, as there is always a risk of loss or theft of a physical credit card, you do not have to worry about the loss or theft of this credit card as it is a virtual credit card. Before discussing the features and benefits of a virtual credit card, let us first understand what a virtual credit card is.
Virtual Credit Card: Meaning
Virtual credit cards are those credit cards that are not available in physical form but are available online. These cards do not exist in a plastic form. These cards have been specially designed to complete all online transactions. This card is just like any other regular credit card, and it contains all the information such as the name on the card, card number, expiration date, CVV, etc. The only difference is that a regular credit card is in a physical form and this credit card is in a virtual form.
These credit cards are quite easy to use and safe to carry as you do not have to worry about losing or stealing your card. Your credit card information cannot be stolen as all such information about credit cards is not physically available in the market but is just with the cardholder in an online form. You can start using this card immediately without waiting for a physical card or ATM PIN to be delivered to your residence.
Working of a Virtual Credit Card
Virtual credit cards offer an extra layer of security to your online transactions. When a cardholder shops online using a virtual credit card, all the information related to a physical credit card is kept safe, masking up a 16-digit number printed on the card and generating a new temporary number that replaces the number on the card. In technical terms, a unique number is randomly generated with computer algorithms, which is very similar to the workings of EMV chip cards used for present-day purchases.
Upon the successful generation of the card’s unique number, you can make purchases in a similar manner to what you used to make purchases with a physical credit card. However, at checkout, the customer will enter that unique number generated through computer algorithms specific to a particular merchant or transaction instead of the actual card number to confuse the EMV chip technology. Most virtual credit cards come with limitations on when and where we can use virtual credit cards. This is done to save cardholders from their data being stolen or used by data thieves.
Benefits of a Virtual Credit Card
Virtual credit cards offer a variety of features and benefits and provide safety to cardholders. Following are the detailed benefits of this credit card –
Convenient
Virtual credit cards are quite convenient in comparison to physical credit cards, as you are free from the hassle of carrying a credit card. All the important information related to a credit card, such as a credit card number, expiry date of the card, and CVV number, is available online and can be easily accessed through your mobile phone.
Flexible
This credit card can be used for all transactions through any bank account that is enabled on Internet banking. Virtual credit cards can be used for making transactions of any amount but only on merchant sites that accept virtual credit cards. This makes the usage of virtual credit cards more flexible than using a physical credit card.
Better security
Most virtual credit cards come with a one-time option and can only be used for a specific period. Since these credit cards can only be used online, hence the chances of fraud are negligible
Easy to Cancel
These virtual credit cards are quite easy to cancel. You can easily cancel your virtual credit card using your smartphone.
Disadvantages of Using a Virtual Credit Card
Though a virtual credit card has benefits, there are also disadvantages.
- Since a virtual credit card is digital, it cannot be used for transactions at merchant outlets where a card needs to be swiped.
- Cash withdrawal is not possible using a virtual credit card.
- Since these credit cards come with a very short period, i.e., they expire quite soon, hence, it can cause an issue for subscriptions purchased using this credit card.
Virtual Credit Cards in India
An individual can get a virtual credit card either through the bank if the customer has a credit card with one of the banks that provides the facility. You can also have a virtual credit card by linking a pre-existing card from another bank to an online service.
- HDFC Bank UPI RuPay Credit Card
- AU Bank InstaPay Credit Card
- IndusInd Bank ePay Amex Credit Card
- Yes Bank RuPay Credit Card
Bottom Line
Virtual cards are add-on credit cards issued on the primary card. This card does not have any physical existence and is just present online but has all the information like the credit card number, expiry dates, and CVV just like a regular credit card. On the one hand, where this card has several advantages like better security features, convenience, and flexibility which quite adds to the benefits of having a virtual credit card, on the other hand, it comes with some drawbacks as well. A virtual credit card cannot be used at physical stores, you cannot withdraw cash using a virtual credit card, etc. But because of this card’s benefits, they have a bright future in the coming era.