Imagine you forgot your credit card at home and there is no way you can get access to it. Won't you feel wedged? Well, virtual cards have answered this problem for you.
In today's time of digital transformation, the old ways of performing financial transactions have been evolving every day at a fast pace. One such invention is “virtual cards". These cards are also called digital cards or ecards.
Virtual cards are the cards used to make payments and purchases online with the help of a mobile app without the need to have a physical credit card.
In this blog post, we will discuss all that virtual cards are, how they work, their benefits, and use cases for a better understanding of the topic.
What are Virtual Cards?
A virtual card refers to a type of payment method where users can make payments for purchases made through mobile apps or over the internet, without the need to carry a physical card. In general, a digital form of a physical credit card that allows making online transactions is a virtual card.
Digital payment options, commonly known as virtual cards, are formed by connecting a physical credit card to a digital interface such as a mobile application or online account. This virtual card is given a one-of-a-kind card number, security code, and expiration date to be utilized in making purchases similar to a physical credit card.
A standout aspect of virtual cards compared to physical credit cards is the ease of creation and deletion, offering users more control and versatility in their spending habits.
This digital payment solution also has the added features of virtual cards such as customer names, spending limits, and expiration dates to help individuals better manage their finances and decrease the risk of fraud.
Some illustrations of popular virtual card providers include
Capital One: Capital One's virtual card service, Eno, generates unique card figures for online purchases and allows druggies to set custom spending limits and expiration dates.
Citi: Virtual Account figures Citi's virtual card service generates unique card figures for online purchases and allows druggies to set custom expiration dates and spending limits.
American Express: American Express offers virtual card figures for online purchases that can be used with any enrolled Card account.
Bank of America: Bank of America offers a virtual card service called ShopSafe, which generates a unique card number for online purchases and allows druggies to set customer expiration dates and spending limits.
Chase: Chase offers a virtual card service called Chase Ultimate prices, which generates a unique card number for online purchases and allows druggies to set custom expiration dates and spending limits.
Goldman Sachs Marcus: Goldman Sachs offers a virtual card service for its Marcus deposit account holders which allows them to induce virtual card figures for online purchases.
How do Virtual Cards work?
Virtual Card Creation
A user creates a virtual card using their bank's online banking portal or through a third-party provider. The user chooses the amount they want to load onto the card, sets spending limits, and assigns a name or label to the card.
The virtual card details, such as the card number, CVV, and expiration date, are generated and provided to the user. These details are unique to the virtual card and are different from the user's physical credit or debit card.
The virtual card can be used to make online purchases or transactions that require a credit or debit card. The user enters the virtual card details during checkout, and the transaction is processed by the virtual card provider.
The user can set spending limits for the virtual card, which restricts the maximum amount that can be spent in a single transaction or over a set period.
Virtual cards offer enhanced security compared to physical cards. Since the virtual card details are unique and different from the user's physical card, the risk of fraud or identity theft is reduced. Virtual cards can also be disabled or deleted if they are lost or stolen.
Virtual cards offer the ability to track and monitor spending easily. Users can view transaction history, check balances, and receive real-time alerts for transactions made with the virtual card.
Virtual cards can be reloaded with funds whenever the user needs to make additional purchases or transactions. Users can add funds to the virtual card using their bank account or other payment methods.
Benefits of Virtual Cards
Virtual cards offer a wide range of benefits to users, making them a popular choice for online and mobile transactions. Some of the crucial benefits of using virtual cards include:
Convenience and ease of use
Virtual cards are readily accessible through mobile apps or online accounts, making them an accessible choice for online shopping and other digital transactions. They can be created and deleted as required, which allows for higher flexibility and control over spending.
Increased security and fraud protection
Since virtual cards aren't physical, they can not be stolen or lost. Numerous digital platforms that offer virtual cards also have built-in digital fraud prevention and discovery tools, which can help protect users from unauthorized transactions.
Digital fraud prevention with DigiPay’s secure payment solution
Capability to set spending limits and expiration dates
Virtual cards allow users to set custom spending limits and expiration dates for each card, which can help users better manage their finances and expenditures. This can also safeguard users from fraud by limiting the amount of money that can be charged to a card.
Simplified expenditure tracking and management
Virtual cards can be smoothly tracked and managed through digital platforms, which can help users stay on top of their costs and better manage their finances. This can be especially useful for businesses, which can use virtual cards to track employee expenditures and manage commercial spending.
Use Cases for Virtual Cards
Digital payments via virtual cards have a wide range of practical applications and can be used in a variety of situations. Some of the most common use cases include:
Online shopping and e-commerce
Virtual cards are ideal for online shopping as they provide a secure and convenient way to make purchases without the need for a physical credit card. They can also be used for recurring payments, such as subscription services, which can help users better manage their expenses.
Business expenses and travel
Virtual cards for your businesses can be a lifesaver, as they can be used to track employee expenses and manage corporate spending. They can also be used for travel expenses, such as hotel and rental car reservations. This can help businesses better manage their expenses and keep track of employee spending while traveling.
Read more: How Virtual Cards are Transforming Business Finance for the Better
Subscription services and recurring payments
Virtual cards can be used to set up recurring payments for subscription services, such as streaming services, software, or other digital products. This can help users better manage their expenses and keep track of their subscriptions.
Virtual cards, also known as digital cards or ecards, are an ultramodern and innovative digital payment system that offers a wide range of benefits to customers. They give increased convenience and ease of use, increased security and fraud protection, the capability to set spending limits and expiration dates, and simplified expenditure tracking and operation.
These benefits make virtual cards a popular choice for online and mobile payments and can help users manage their finances and expenses. Also, virtual cards have a wide range of practical operations and can be used in a variety of situations, including online shopping, e-commerce, business charges, trip, subscription services, and recreating payments.
These cards give a secure and accessible way to make deals, and the capability to set spending limits and expiration dates can help users better manage their expenses. Businesses can also use virtual cards to track employee expenses and manage commercial spending.
We, at digipay.guru, understand the importance of virtual cards in today's digital age and we are providing our users with a virtual prepaid card feature in digital wallets. Our user-friendly & advanced digital payment platform and enhanced security features will provide you with a seamless and secure virtual card experience.