The evolution of digital technology has brought about many new solutions for online payments. Traditional payment methods, like credit cards and bank transfers, are still relevant and widely accepted. However, credit card companies and banks are no longer the only players in the field. 

Virtual credit cards are among the most popular. The market of virtual credit cards crossed the USD 210 billion mark in 2021 and should go over USD 600 billion by 2028. So, this niche is undoubtedly expanding. As this niche is undoubtedly expanding this article will teach you when, where and how to use it.

Virtuality in the Material World

Virtual credit cards, as the name suggests, came to replace physical credit cards in online purchases. There are more differences between virtual and physical cards than the state of matter. While the one you have in your wallet has a fixed number and an expiry date, the digital version generates a new number for every new operation, a unique sequence of numbers.

Amid a scary and rapid rise of digital crimes, solutions like that help you protect your identity banking details. Because every transaction has a new number, it’s useless for hackers to try and steal it. Also, while you use this service, you don’t have to share your actual banking details or any sensitive information.

Although this service is mainly used for one-time operations, there are other ways to enjoy it. For instance, you can create separate digital cards for the stores you buy the most. It’s easier to set limits and track your spending habits with them. 

Also, you can cancel or block them individually, without any effect on your main account. It’s even possible to use them in physical shops, using mobile payment services like Google Pay and Apple Pay. Such features made virtual credit cards a common option for online casino players and other online games.

How to Create Yours

Simplicity is another key feature of this service. In most cases, you can create and delete your own virtual cards. Some operators, like Citi, allow you to request a new virtual card via an app or web-based platform only with your login details. You’ll receive a ready-to-use number to make online purchases on web-based stores and also via the app. 

Most financial institutions now offer this kind of service: Visa, Mastercard, AMEX, and Citi, among them. However, it’s impossible to escape technology these days. Even institutions that don’t offer this service (like Discover, Bank of America, or Chase) use some sort of digital wallet solution. Digital payments are here to stay and will likely become even more accessible with time.

Virtual Credit Cards vs. Digital Wallets

Both services are often associated, although they’re fundamentally different. Think of digital wallets as virtual versions of your bank account, where you can store, deposit and transfer money. You can use virtual credit cards associated with digital wallets. Check buy now, pay later (BNPL) options, like Klarna, for instance.

Smartphones and Tokens

Virtual credit cards were created to mimic the functions of the physical ones, with a few perks on the top. It means you can use it everywhere your physical card would also be accepted. 

As previously mentioned, you can even use them in physical shops. In this case, you’ll need to associate your virtual card with a mobile payment service or digital wallet. While some are meant for one operation only, you can also set the expiration date by yourself.

Apps like Samsung Pay, Google Pay and Apple Pay use contactless technologies for in-store payments. In this case, payments occur via “near-field communications” (NFC) or “magnetic secure transmission” (MST). Those apps replace your primary account number (PAN) with a token.

This payment token works similarly to virtual credit cards, as new numbers can be generated for each transaction. Many financial institutions are adding tokenisation technologies to their products. It’s important to mention, however, that mobile payment apps and virtual credit cards are also fundamentally different and can work independently. It means you don’t need a digital wallet or mobile payment app to use this service.

Reasons To Use It

Cybercrime is on the rise, causing losses to the tune of trillions. Although online businesses and government institutions are the juiciest targets, the number of targeted individuals is also escalating. A recent survey in the United States pointed out that nearly 60% of Americans were already victims of cybercrime. Worse still, 70% of the surveyed small businesses were critically underprepared for cyberattacks.  

Your information is also at risk when your favourite shop suffers a security breach. Security breaches typically aim to steal personal and banking information from businesses’ databases. Once again, a virtual credit card can help you steer clear of such dangers. 

Hackers can’t trace a virtual card back to your actual banking details. If it’s a one-time number, it leaves hackers with useless information. If not, you can easily cancel when you notice any unusual operation without affecting your primary card.

Safety Is Never Too Much – A Few Extra Tips

Most virtual cards already use top-notch security systems, like high-level encryption, multiple verifications, etc. Yet, there are a few things you can do to make online shopping even safer. Firstly, only shop on trustworthy websites with solid security systems in place. If possible, read a few customer reviews and specialised websites to better understand its trustworthiness. 

While creating your account in an online shop, skip all the optional fields: don’t provide more information than mandatory. Also, create strong passwords and only use secure networks while shopping. Public networks can have low-security levels, exposing you to malicious actors connected to the same network.

Additionally, ensure you’re using updated software on your mobile device or PC, including antiviruses and virtual private networks (VPNs). Above all, don’t click on links from unknown sources or open emails from suspicious sources. 

There’s no reason to worry about your safety while shopping online if you follow the simple steps above. Using a virtual credit card is just another layer of protection for your information and assets in an increasingly more dangerous virtual world.