What are Virtual Debit Cards – Benefits, Usage and How to Apply?
Virtual debit cards are digital forms of physical debit cards that store all vital payment information remotely. Like physical debit cards, they can be used to make purchases online.
Unlike physical debit cards, you do not have to carry them since they have no physical presence. Instead, a virtual debit card contains the cardholder’s name, 16-digit card number, CVV and expiry date.
Normally, payment merchants allow you to utilise virtual cards through mobile applications. With a validity of about 48 hours, users can utilise these cards to make payments to specific vendors after receiving an OTP to their registered phone number.
How to Apply for Virtual Debit Cards?
Application for a free virtual debit card requires the following steps:
- Install the mobile application of the lender
- Look for the option to generate the virtual card
- Provide necessary details and transfer funds to the virtual card
- The issuer will send a password and OTP to the registered mobile device
- You can use this OTP and password to activate the virtual card and carry our transactions
Benefits of Virtual Debit Cards
Virtual debit cards function just like their physical counterparts, except that they can only be accessed for a limited time for specific transactions virtually. Some advantages of making online transactions using virtual debit cards are:
- Security: Virtual cards are secure since user details are not shared with the merchant. Most cards have a validity of up to 48 hours, and you can activate them only after entering the OTP received on their mobile number. It is impossible to duplicate or clone such cards, thus protecting them against fraudulent transactions.
- Activation: Physical debit cards require prior activation from an ATM or other means. However, you can activate virtual cards instantly by responding to the activation prompt sent by the vendor. Issuers normally send the activation passwords at a later date to make the usage securer.
- Ease of Access: Unlike physical cards, you can apply for virtual cards instantly and perform secure online shopping or bill payments. Most issuers provide instant SMS alerts to help you keep track of your spending.
- Reward Points and other Benefits: Most virtual debit card issuers provide a range of benefits that include cash backs and other reward points on every transaction. Some offer flat discounts on online purchases and instant cashback.
Also Read: Simplifying Cashless Transactions With Virtual Credit cards
How to Use Virtual Debit Cards?
A virtual debit card finds its applications in a variety of online transactions. Using such cards requires a physical debit card. On applying to your card provider, you can obtain a 16-digit number representing your virtual card.
Generally, lenders set a maximum limit and expiry date for virtual cards. During a transaction, you can use this 16-digit virtual debit card number and complete the transaction using the password or code. These cards require a network connection to activate and perform the transaction.
How Safe are Virtual Debit Cards?
Virtual debit cards are designed to protect users against fraudulent activities. Thus fraudsters cannot access and steal crucial information like card numbers, CVV and passwords.
It isn’t easy to trace basic details like card numbers and CVV without accessing a valid mobile device. If you detect any issues with the virtual cards, you can block such cards immediately with just a few clicks on the smartphone.
Also Read: Difference Between Credit Card and Debit Card
Final Word
Virtual debit cards aid in online transactions and do not require you to carry them everywhere. In addition, lenders do not require account information to issue such cards. Their flexibility and ease of access find applications in various transactions without the risk of the card being misused for fraud.
FAQs
Ans: Virtual cards do find applications in various online payments, including e-Commerce payments. They are safer and more secure than physical cards and are valid for a short period or a limited number of transactions.
Ans: With the absence of a physical card, users cannot produce card details if the retailer needs such information for refunding purposes. Thus in cases of transaction errors, users may not receive a refund.
Ans: No, you cannot withdraw cash from an ATM or make in-store payments using virtual debit cards. However, you can choose to send money to beneficiaries and make cardless transactions online.
Ans: Yes, you are eligible to get a virtual card without any extra charge since you already have a physical card from the lender. Debit card issuers do not charge any amount to produce virtual cards for their already existing customers.
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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.
