As a business owner and consumer, you may have encountered the terms virtual credit card or virtual debit card, and you might wonder, “What is a virtual card?” A virtual credit card is not a physical, plastic card. Instead, it is a set of sixteen digits similar to a credit card number together with a CVV code that is randomly generated using software.
What is a virtual credit card?
A virtual credit card is a set of 16 digits that are randomly generated together with a CVV code that can be used to make purchases of goods and services remotely. Charges can be made with the card numbers online or by telephone, but they cannot be made in person.
When a card number is generated, the charges are routed to the original credit card number. However, the virtual number cannot be traced back to the original card, and it will not work after the purchase. Like credit cards, purchases made with virtual credit cards are added to the revolving lines of credit of the underlying cards and may be charged interest.
How do virtual cards work?
Virtual cards are just like normal cards, they’re just digital instead of physical, existing entirely on your smartphone. When you open an account, you receive a virtual debit card right in your banking app, which can then be linked to Apple Pay or Google Pay.
You can use this card number to shop online, transfer money, or make contactless payments in stores by holding your phone up to the card reader.
Some ATMs also allow you to make withdrawals via your virtual card.
What is a virtual debit card?
A virtual debit card is similar, but the randomly generated number is linked to an underlying debit account instead of a credit card. The virtual numbers can be used to make purchases remotely, but it cannot be used to make in-person purchases.
When charges are made using the virtual debit card number, the purchases are routed to the linked account and are subtracted from the balance. However, people are not able to trace the number back to the originating account or to access money by using the number.
What is a virtual card used for payments?
Virtual payments are payments that are made online or over the telephone without exchanging cash or paying by check. These payments are made using the generated numbers in a secure manner.
When payments are made virtually, hackers who steal the generated numbers will not be able to use them. The numbers will not work after they have been used by you to make the payment, and they won’t work to allow access to your accounts or to be traced back to your company. Virtual payments can help to reduce invoices and speed up the payment process so that goodwill is built between you and your suppliers.
Who uses virtual cards? Why are they used?
Virtual credit and debit cards are becoming increasingly common among consumers, and businesses are now starting to catch up. They are used to make purchases remotely and to prevent fraud.
Since the numbers are essentially throwaway numbers, they are useless to thieves. When you choose to use virtual numbers to make purchases online or over the phone, you can eliminate the potential for online fraud. Your employees also will not be able to use the numbers to make purchases that you have not authorised.
Virtual card security at Jeton
At Jeton, we only allow one smartphone to be linked to any account at a time, and you need a password or fingerprint ID to access the app. All outgoing transactions must be verified by a PIN, and notifications are sent whenever a transaction is processed in real-time, so you always know what’s going on.
Jeton also puts you in control with personalized security settings that you can switch on or off in the app, including requesting permission to make cash withdrawals and online payments.