Virtual cards—what are they and how do they work? (2024)

FAQs

What are virtual cards and how do they work? ›

Virtual credit cards are digital credit cards that function like physical credit cards—but without the plastic. Rather than providing the same card number to multiple vendors, companies can limit their exposure to potential fraud by generating different 16-digit card numbers and expiration dates for each transaction.

Unfortunately, if you don't have a physical card, you cannot get money off a virtual card through an ATM. However, you can link a virtual card to your physical credit or debit card or mobile wallet. This action makes it possible to withdraw cash at ATMs.

A virtual card is a credit card number, CVV code, and expiry date issued by a bank or credit card issuer. It's provided digitally to be used for shopping online. While you can use a physical card for in-person retail shopping and cash withdrawals, virtual cards are more temporary and digital.

Virtual cards offer a layer of security compared to physical cards because they protect your real credit card information. This makes them safer than physical cards in several respects: Virtual credit cards can be restricted to specific merchants and limited to certain spending limits.

Virtual Debit Card cannot be used for Cash Withdrawal.

Access your virtual card account: Log in to the app or website linked to your virtual card. Find the transfer option: Look for features like "Transfer money" or "Send money." Select your bank account: Choose the bank account you want to transfer the money to.

Is virtual card worth it? ›

The benefits of virtual credit cards include greater security and easier online shopping, while the drawbacks include the lack of widespread availability of virtual credit cards.

Virtual cards can be used online, over the phone, via an app, and anywhere you or the merchant can key in the 16-digit virtual card number. Simply plug in your virtual card details and let the payment processor do its job.

The benefits of virtual credit cards

Virtual credit cards offer an extra level of security against criminals attempting to steal information via insecure connections or data breaches. If the account holder needs to cancel their card for any reason, a virtual credit card can make the process much easier.

A major disadvantage of a virtual debit card is that it cannot be used to withdraw cash at an ATM. Moreover, you cannot use it to make in-store purchases where swiping or tapping the card is necessary.

Virtual credit cards are a digital version of your physical credit card. They generate a unique credit card number for you to use in place of your physical card number, preventing the merchant from storing your credit card information and keeping your financial data more secure.

Virtual credit cards can make online shopping more secure. It's considered a safe payment option that puts an additional barrier between your credit card number and identity thieves.

The cost of accepting virtual card payments

Virtual credit cards cost buyers very little, as issuers charge minimally for their services and the actual creation of cards costs the buyer nothing. For sellers, however, virtual card processing can be expensive.

Via an App: Enter and save the virtual card details as a credit card when buying via an app. Physical Store: Key in the virtual card details in the card reader at a physical store.

Digital gift cards can generally be used for both online and in-store purchases, giving the recipient more flexibility. On the other hand, virtual gift cards are typically limited to online use, as they are specifically designed for specific websites or platforms.