bankingciooutlook

Virtual Cards: Leading the All-New and All-Safe Card-less Medium of Transactions!

By Banking CIO Outlook | Wednesday, August 28, 2019

Service providers have found a new way to leverage the combined convenience of cards and internet-based payments by coming up with virtual cards, which are safer, faster, and better.  

FREMONT, CA: The society has been continually evolving, and so is the payment landscape. From the barter system in the bygone era to the digital transactions of today, there have been numerous developments. The introduction of credit cards was a defining point. But, next up in this chain is the virtual payment card. With the motto of improving the security of transactions, banking firms have come up with the concept of virtual cards, which are essentially 16-digit computer-generated numbers. As an alternative method of payment, it benefits both buyers and sellers in several ways. The intrinsic features that come with the temporary nature of the virtual cards simplify and streamline finance practices and create a safety cover on the bank account of the user.  

Virtual payment cards are temporary in nature and are a great alternative to credit card payments. The 16-digit code is unique to the user, and it is connected to the bank accounts or original credit cards, which are to be used as payment sources. Thus, every time users are to make payments, they can simply utilize the virtual cards without exposing the actual account details. Most of the merchants that accept traditional card payments can also process these virtual cards. The issuers of these cards are creating solutions that are easy and safe for consumers.

The companies that are providing the facilities of virtual cards conduct all the processes online. A customer can easily access the facilities on internet browsers and fill up the required details which include general personal information and valid contact details along with the bank account numbers that are to be used as the source of funding. All of this happens within a short span of time as users don't have to visit physical facilities or submit hard copies of documents. The fees charged for virtual payment cards vary depending upon the service providers. While some take fees for every card generated, others have a monthly payment system. Sometimes, service providers might also charge fees for every transaction taking place.

The most appealing feature of virtual payment cards is their security. By forming a buffer between the merchant and the source of money, virtual payment cards make it difficult for breaches to affect the original account of a customer. Even when a merchant suffers a breach, the sensitive financial details of a customer remains safe. Virtual cards also have the feature wherein it allows for the setting of maximum spends, so there is no chance of being overcharged.

When a customer uses the primary bank account or credit card for online transactions, and fraud occurs, he or she will have to reissue another card with a new number as a measure of security. Every time this happens, users have to re-do the recurring payments with the new cards. If customers use virtual payment cards instead, they can close that particular card and the actual credit card does not have to be reissued and they are saved from all the trouble of setting up payment methods again.

Virtual payment cards are as beneficial to sellers as they are to buyers. As buyers, users have access to hassle-free and timely transaction facilities. The payments are less vulnerable to frauds and receive detailed remittance information which can be used for reconciliation. The role of paper checks, banks deposits, and transaction processing delays are all eliminated. For the sellers, the advantages involve lower processing time and fees, improved cash management, and customer relationships. Disbursement process also becomes streamlined.

Virtual payment cards are a viable and safe alternative when compared to card transactions and have the potential to revolutionize the payments domain further.

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