An increasing number of Americans are falling prey to credit card fraud every year. It is being estimated that around 20% of these people blame online transactions for such mishaps and is probably the reason why people shy away from purchasing over the internet. Virtual credit cards, which offer controlled numbers for payments have been in presence for nearly seven years and are gradually gaining in popularity, allowing individuals to shop freely without the fear of theft of their personal details.
What is a Virtual Credit Card?
Virtual credit cards are disposable payment cards, which can be used for shopping or making payments over the internet. They are also known as single-use credit cards. These cards provide the protection that consumer’s wish as they are provided with a new card number for every transaction they make, online. These cards are issued by major brands such as MasterCard, Visa and major banking organizations. They are similar to online gift vouchers and totally remove any possibilities of fraud.
How do they Work?
These cards are similar in nature to regular cards with the exception that they can only be used online. The accounts associated with the card are financed online and consumers intending to shop on the internet use the number of their virtual credit card, just as they would in regular situations. Virtual credit cards are basically pre-paid cards with no line of credit being made available on them. The user will need to open an account and fund the same before they can use the card. Some issuers enable funding of the account with a selection of methods, while others will only do so with a regular credit or debit card.
Signing up for a Virtual Card
The application process for a digital credit card may differ from one provider to another. However , the basic requirements remain exactly the same. An application available on the card website will have to be completed apart from downloading the security software program to the personal computer or laptop, that is being used. Fees applicable for activation of the card and the account will be debited, once funds are received for the first time. Monthly maintenance charges may also be applicable.
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Merchants accepting Virtual Cards
There is absolutely no restriction on any merchants for accepting virtual credit cards. However , it must be remembered that these cards can only be used online and cannot be carried about like a regular card. The vendor will in no way be able to comprehend whether a consumer is using a regular credit/debit card or a virtual card. They will do not have access to any data apart from the temporary number, which is generated for the transaction.
Disadvantages of a Virtual Cards
Digital credit cards can only be used for online transactions. Many people have limited usage of cards that can only be used on the web. Therefore , they feel a have to retain a physical card to be used against transactions of some sorts. They are also slow in processing transactions as compared to their counterparts. However , they are a good solution for people preferring to shop and make payments online due to their safe nature.