While credit cards have been a popular spending tool, many banks also offer virtual credit cards which provide a relatively safe and hassle-free way of making digital transactions.
Virtual cards have emerged as an advanced and secure way of online payments
While credit cards have been a popular spending tool, many banks also offer virtual credit cards which provide a relatively safe and hassle-free way of making digital transactions.
As the name suggests, virtual credit cards are online cards that are not physically issued by the credit card company. It is a service that is provided by banks or credit card companies to their customers for online transactions.
Safety: Credits cards are vulnerable to cyber frauds no matter how careful we are with their usage. One of the strongest reasons for this being that we expose our credit card details to a vast space like the internet while making online transactions. A virtual credit card has no physical existence hence the details of the primary credit card are not communicated to the merchant. This reduces the susceptibility of financial frauds and offers a much safer way for carrying out online transactions to credit and debit card holders. Safety of transactions makes virtual credit card an attractive proposition.
Features: A virtual credit card is mostly issued to existing credit card holders. However, customers who do not have credit cards but have a savings account with a bank can also avail such cards. The process is simple – it requires you to log into the Internet banking portal of your respective bank in which you hold an account and then under the virtual card creation option, you can create the card and finish the process.
All required details like the card number, date of expiry and CVV number are visible online. These are one-time use cards that can only be used for a single online transaction. Users can set their own usage limit for a virtual credit card depending on their purchase.
Virtual credit cards are created only for certain duration and expire automatically within 24-48 hours even if not used. When availed on the basis of a primary credit card, the purchase made through virtual credit cards appears on the primary credit card statement just like any other transaction. When availed against a saving account, the amount is deducted from your linked savings account. If the amount in the virtual credit card is not fully utilised, it will be credited into the main card or source account within a specified period. Among the many benefits, virtual credit cards are also free to generate and use.
Many banks in India have been offering virtual credit card service for a while now—ICICI Bank, HDFC Bank, SBI , Kotak Mahindra and Axis Bank are some of the popular banks.
Recently, ICICI launched instant virtual credit cards where they are giving savings bank customers who pre-qualify for credit cards to instantly get a virtual credit card and start shopping online. The bank is running a background analytics to figure out who are eligible for such cards. These users can use the virtual credit cards even before the physical card is delivered to them. The idea is to offer instant credit card service to those who qualify for a credit card.
Virtual credit cards are meant to make your online transactions safer. If you are wary of sharing your credit card or internet banking details online, they could come in handy.