To facilitate a cashless economy, RBI approved the launch of various digital transaction interfaces. This led to the growth of UPI and other online payment gateways. However, cash transactions are chaotic, and it often becomes difficult to manage cash. Digitisation has facilitated online payment options for all transactions subject to guidelines set by RBI. Virtual credit cards now join the league of net banking and UPI to enable users to pay remotely in a seamless manner.
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What Are Virtual Credit Cards?
Like usual credit cards, virtual credit cards are temporary 16-digit numbers that store credit information. However, they negate the possibility of credit card losses or being misused by anybody else, thus securing the payment.
These credit cards function the same way as a normal credit card with the valid card number, CVV number and expiry date. Users can perform transactions online by entering the necessary details. It reduces the risk of failed transactions due to network lags and also eliminates the chances of illegal usage by cloning.
Unlike credit cards which allow you for offline purchases as well, virtual credit cards can only be used for online transactions.
Virtual credit cards enable instantaneous online payments and allow users to choose their credit limit or merchant types. Some salient features of these cards are as follows:
Security Unlike normal credit cards that can be cloned or tampered with, virtual credit cards can only be accessed by the user’s personal devices. Virtual credit cards can only be accessed online, adding multiple layers of security parameters. In addition, trusted card providers like Visa and MasterCard offer virtual cards with several security features and fraud checks.
Ease of Access and Creation Recent advancements in financial technologies make virtual credit cards excellent payment options. These cards can be created instantly, and you can access them from anywhere online to make transactions.
Some cards come with expense management features that automatically monitor transactions and provide a zero-touch accounting experience. Many virtual cards also utilise artificial intelligence to match, categorise and integrate information and make online payments a better experience.
Fulfilling business needs Organisations shift to virtual credit cards to facilitate payments via a single platform instead of multiple cards and accounts to make payments from. This allows businesses to clear financial bottlenecks easily. Purchase and payment requests and receipts can be accessed instantly and securely.
Easy cancellation In case you wish to cancel your virtual credit card, you can do so easily right from your smartphone or any other device with just a few clicks.
If you are willing to use virtual credit cards for making a payment, you should ensure that the credit card provider allows virtual payment access. On submitting credit card details, you will get a unique card number with an expiry date and security code. For online transactions, you must
Enter the credit card number details
Enter credit card validity
Put the OTP sent to your registered number
The transaction is confirmed when users confirm the information provided.
How to Apply for Virtual Credit Cards?
Obtaining a virtual credit card involves the following steps.
Visit the official website of the credit card provider
Choose the credit card of choice
Fill in personal information and verify OTP sent on registered phone numbers
Validate KYC and other documents
Activate internet banking and accept card details
Use the virtual card details for online transactions
Are Virtual Credit Cards Safe?
Experts believe that virtual cards are safer transaction modes than most other modes like cash and physical cards. Some points supporting this statement include:
Virtual cards are temporary and automatically get disposed of after a set number of transactions.
Cancelling virtual cards is easier and does not enable fraudsters to tamper with them.
Single-use virtual cards automatically refute their validity when there is a data breach or unsecured network connection.
Physical credit cards increase the risk of fraudulent activities since they are easier to clone. Virtual credit cards, on the other hand, do not expose personal information and thus are securer and more convenient. Almost all credit card users can avail of virtual cards from their card providers.
FAQs on Virtual Credit Cards
Q1. How can an individual with poor credit history obtain virtual credit cards?
Ans: To obtain a virtual credit card, physical credit card users should ensure that their financial provider issues virtual cards and then apply accordingly. People with bad credit history might not get a credit card in the first place.
Q2. Can I use virtual cards for international transactions?
Ans: You can use virtual credit cards anywhere if the payment receiver allows credit card payments. You will need to have a valid virtual credit card to enable such payments. In some cases, there might be an additional charge.
Q3. Are there any disadvantages of virtual cards?
Ans: Users with valid cards can make payments anywhere. But there can be issues with refunds if you use a virtual credit card. If you need a refund from a retailer, you will have to provide card details. But in case the card has already expired, then the refund is not possible.
Q4. What is the limit of a virtual credit card?
The original limit of any virtual credit card usually stays at Re. 1 by default. You can increase this limit as per the limit of your primary credit card.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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