Virtual credit cards allow shoppers to take their online buying to the next level. It provides shoppers with the convenience and safety they need. The pandemic made them the go-to choice as they were the best option for online and physical payments. The adoption of this virtual payment will reach a value of $5 Trillion in transactions by 2025.
Asides from serving e-commerce shoppers, they benefit online businesses in running ads and making safe payments. With virtual cards, buyers save their card and personal details as they make payments online.
While virtual cards provide incredible benefits, are they the new reality?
What is a virtual credit card?
A virtual credit card is a temporary digital card used to make online payments. The credit card system improves the security of online payments. When your provider issues you one, you’ll use the card to pay online like any other credit card. However, there are two significant differences from regular credit cards.
- Firstly, as the name implies, the card isn’t physical, it’s hosted on a device or a web page, depending on your provider, and you can only have access to it after you log into your provider’s platform.
- Also, the card generates a new series of the needed information whenever there is a need to make a payment. It means the system will generate a new set of 16-digit numbers and 3-digit CVV numbers every time you decide to use the card for an online payment transaction.
Hence, virtual credit cards provide an edge over physical credit cards. You won’t lose your virtual credit card as easily as a physical card. Plus, you enjoy a more secure payment method.
How does a virtual visa card work
A virtual card visa card is a set of random figures and codes representing your account. Unlike cards made from plastic, you instantly generate the numbers when you want to make purchases.
Similar to physical credit cards, purchases with visa cards are charged from the linked account. In the case of a virtual visa card, the card number ceases to function after payment is made, reducing the risk of credit card theft.
Online shoppers use the figures for transactions minutes after its generation.
Virtual visa cards from Juni improve media purchases and allow buyers to spend in different currencies. The card gives users high spending limits and earnings on eligible spending.
They are designed to improve and secure purchases. The numbers guarantee seamless online transactions and work excellently with online promotions.
Reasons why virtual credit cards are the reality
Are these modern payment methods worth all the hype? In 2019, a study estimated that the number of virtual credit card-powered payments would exceed $1 Trillion by 2022.
The remarkable numbers and adoption rate of these cards are just some reasons you should get aboard this train. Here are six solid reasons these cards are the way to go:
- Safe and secure payments
Payments powered by virtual cards are the most secure online transactions. Like every other major credit card, virtual cards use Luhn’s algorithm to generate the 16-digit credit card number that usually appears on the front of physical cards.
These 16 digits, in conjunction with the 3-digit CVV number on the flipside and sometimes a pin code, are what merchants use to verify transactions and accept online payments.
The difference between this credit card model and their physical counterparts is that they have a system that improves their security. The credit card is hosted on a webpage or an app, depending on your provider. It creates a new set of digits every time you need to execute a transaction.
This means the 16-digit credit card number and the 3-digit CVV are different for each transaction, though they control one account. Alternatively, virtual credit cards allow you to repeatedly use specific verification details for a particular merchant. The result of this is a system that protects the user’s information and repels the attempts of hackers and fraudsters at the same time.
- Ease of acquisition
It takes, on average, between 24 hours and two working days to process a physical credit card, validate it and issue it to a customer. The processing period will take much longer if you’re banking with certain financial institutions.
On the flip side, the issuance of a virtual credit card would take just a few minutes and wouldn’t need a user to visit a bank or office. When we consider this advantage and include that virtual credit cards are even more efficient than physical ones, it is evident that the former is a better option than the physical ones.
Also, physical credit cards come with a cost, as the plastic used to make them is not free. Virtual credit cards, on the other hand, are free as long as you use the provider’s services. Hence, acquiring this modern card beats the processing, functionality, and time needed to obtain a physical copy.
- Convenience
These credit cards are convenient. The already lightweight design of the physical provides comfort for its users. Still, what compares to a virtual credit card?
One primary reason for the wide use of this type of payment method is convenience. Most people now walk out of their houses, and the only thing they need to go about their day-to-day activities is their mobile devices. They would prefer to avoid having any need to carry anything extra with them.
For startups and large corporations, using a virtual credit card makes it convenient for many financial tasks to be automated and adequately monitored. These cards specify the details needed for a particular merchant and automate a payment at the scheduled time.
Some corporations also use the virtual credit card system to monitor transactions, reducing financial disparities and risk of fraud and promoting internal transparency simultaneously.
- Rebates and cashbacks
Most institutions have virtual credit cards that offer users rebates/cashback when a user uses the virtual card to pay for services. The good thing about these new cards is that you aren’t doing anything special, but you’re getting rewarded for using them.
These rebates are even more enticing to business owners who spend a lot of money buying stock from suppliers. They will get bigger cashback as many virtual card issuers reward based on the amount of money a user spends.
This means the more the cardless transactions, the more cashback. In the long run, the company or individual makes money using this payment method.
- Flexibility and account Control
The new credit cards model make it easier to keep track of your account and help manage the amount of money you spend. Users can set their cards by assigning them a spending limit for a stipulated period.
You can also set these limits for specific merchants if that’s what you want. Budgeting also becomes much more manageable as you will easily access and control the amount of money you want to spend on a particular product or service.
These features are very flexible and will take little time or effort compared to physical credit cards.
- Minimal carbon footprint
The world is advancing to improve the environment and reduce global warming. One of the primary ways we will achieve this is by reducing man’s carbon footprint on the earth.
We’ll achieve this goal by minimizing the amount of plastic and carbon-intensive waste the average human contributes to the environment—adopting this payment option will aid this cause.
A few years into the future, carbon footprints will be a big part of our lives. We must start taking action to make that future stable and more sustainable. Yearly, an estimated 6 billion unrecyclable plastic cards come into our environment. Though this is less than 1% of global plastic production, it shows how much work we need to put in.
Replacing your physical credit card with a virtual one seems insignificant now, but it will play a significant role in the future.
Improve your online buying with a virtual credit card
The value of virtual credit cards is obvious.
Virtual cards play a significant role in improving online shopping. It helps online shoppers cut the risks related to physical credit cards and provides convenience.
While physical cards serve customers in several ways, these modern alternative exceed such a service. Their ease of use, flexibility and improved security are all factors that contribute to their wide adoption as the new reality.