Dubai: When you save a credit or debit card to your account, you may be able to turn on a virtual card number. Virtual card numbers can be shared with merchants for online or in-app transactions to keep your actual card number info more secure.
Virtual card numbers are similar to physical credit or charge cards, but exist only in a virtual form. Unlike physical cards, a virtual card becomes available for customer use immediately after generating and assigning a random 16-digit number as it is associated with an already-existing credit card account.
Depending on the issuer, you may be able to set a maximum charge for the virtual number, further helping in curbing overspending and protecting your transaction. And typically you can set it to expire in anywhere up to a year from its creation date.
How do you use a virtual card number?
When you make a purchase in an app with your mobile device or online, you may be able to fill out the form automatically with a virtual card. However, this is conditional on whether or not your card allows this safety feature.
If you check out with an eligible card not saved to your account, you may get the option to turn on a virtual card before you complete your purchase. But if you check out with an eligible card saved to your account, you may get the option to turn on a virtual card after you complete your purchase.
Virtual card numbers are excellent tools for any consumer to securely and effortlessly shop online, while also staying organised and on top of personal finances
After you turn on a virtual card, you might find a small ‘pending transaction’ on your account. This temporary authorisation is a standard industry practice to confirm that your payment method works. Your account isn’t charged and your bank may take 5-7 business days to release authorisations on your account.
Why is a virtual card number important to me?
As identity theft continues to plague credit card holders, virtual card numbers can provide some peace of mind without complicating the process for making payments and earning rewards.
“As it grows more important to protect privacy, virtual card numbers present one way for consumers and businesses alike to manage funds and purchases with enhanced spending controls and reporting tools while minimising security risks from both ends of a transaction,” said Abu Dhabi-based credit analyst Rajesh Markara.
“By implementing all virtual card technology has to offer, consumers and banks deal with fewer fraud charge claims. Those learning how to build credit such as younger family members may benefit from using these types of cards when transacting online,” Markara added.
5 differences between a virtual card and a physical card
1. While a virtual card offers potentially unlimited credit card numbers, physical card offers only one unique credit card number, which adds to the conventional card’s risk.
2. With virtual cards or virtual card numbers, it’s easy to cancel one vendor or service without affecting all other payments, but with the latter cancelling card affects all services and subscriptions.
3. You can set spending limits and other deadlines with virtual cards, but when it comes to physical cards, only some cards offer spending limits.
4. When it comes to virtual cards, they can be used online or over-the-phone, however, the advantage of physical cards over its virtual counterparts is that it can be used in person, online and over phone.
5. Now comes a significant upside of virtual cards over the physical card, which is the fact that the former cannot be lost or stolen, while traditional cards can be.
Virtual card numbers may not be ideal for online purchases you’re planning to pick up in person.
What’s the difference between virtual card numbers and digital wallets?
It’s important to distinguish between virtual cards and digital wallets. Like virtual card numbers, digital wallets too can make payments more convenient and help you keep your payment information more secure.
And since they’re digital, they can help you avoid having to carry around a bunch of physical cards. That can make payments quick and easy.
Some examples of digital wallets are Visa Checkout, Masterpass, Apple Pay, Google Wallet, and other services that allow you to load in your account information and pay with just a click.
Many credit cards offer different types of online payment methods that are designed to better protect your data and make purchases faster. But a digital wallet or any information-storing technology is not the same thing as a virtual card.
Virtual cards are digitally created 16-digit numbers (or ‘token’) that are linked to your actual credit card without exposing the original data. Digital wallets are an online storage of your payment information that allows for one-click virtual payments.
A token is more secure than your actual credit card number because it means your card number isn’t seen by the merchant. And that token can only be used with a unique, encrypted code that gets applied to each individual transaction.
What are the key risks of using a virtual card number?
While virtual cards are great when used as a spending control, they do have some limitations. The main downside to a virtual credit card is that it can only be used online, so it is not usable in all scenarios and is most worthwhile for those who do a lot of their personal or business spending online.
“Virtual card numbers may not be ideal for online purchases you’re planning to pick up in person. If you have to swipe or show your card to verify your identity, your actual card number won’t match the virtual number,” added Markara.
This could apply to situations involving tickets that are collected in-person, hotel reservations and pickup orders. There might be similar issues with in-store returns, too. If one of these situations applies to your purchase, it may help to reach out to the company before buying.”
Options are continuing to grow for virtual credit cards, but they still aren’t universally accessible. Currently there are just a handful of options, and some card issuers only offer personal virtual credit cards without a business option. But if you do get your hands on one, be mindful of the perks and risks.
Physical card information remains protected and anonymous no matter where you shop with a virtual card number
“Virtual card numbers are excellent tools for any consumer to securely and effortlessly shop online, while also staying organised and on top of personal finances,” said Markara.
“Accessing virtual cards online when needed is easy, as consumers with debit, credit or charge accounts that offer this feature need not apply for a new account nor do they incur any credit inquiries.”
Not only are they convenient, virtual card numbers are one way you can protect yourself from credit card fraud. And they also can help limit how much information is accessible to fraudsters if your information is stolen in a phishing scam or a data breach.
“Another added sense of security can be found in the inherent protection afforded to the existing card account. Physical card information remains protected and anonymous no matter where you shop with a virtual card number,” added Markara.
If easier and safer online shopping are must-haves for you, then virtual card numbers could be worth a closer look.