Why Should Everyone Use Virtual Cards For Online Transactions
Why should everyone use virtual cards for online transactions
Marketers are gradually moving their operations online, and this is no longer news to them. With approximately 101.72 million mobile internet users in Nigeria, you can be sure that a significant portion of the 37 million micro, small, and medium-sized enterprises (MSME) in the country is competing for business online.
These online businesses are propelled by e-commerce, which offers a virtually limitless selection of products. When conducting business online, cash is not always king, and as a result, there are a variety of e-payment options available. A payment card is one of the most widely used methods of making a purchase.
Despite the fact that the vast majority of cardholders have physical cards, the security risks associated with them are simply too great because they are linked to bank accounts. Why not use a virtual card instead of a traditional debit card that is not directly linked to a bank account?
What are virtual cards and how do they work?
Virtual cards have many of the same characteristics as physical cards. You can use them for the same purposes as you would normally, with the exception that you cannot physically hold them. They are issued by fintech companies such as Visa, Flutterwave, and others, as well as traditional banks, which have begun issuing their own virtual cards to their customers with the promise of increased security and efficiency in transactions.
It is possible to pay for goods and services using a virtual card online or through apps without having to use your physical card or provide your actual account information.
To obtain one, users need only create a virtual card on any fintech platform or bank that issues virtual cards, load money from their bank account onto the card, and use the card for whatever online transactions they require. This means that the amount of money that can be stored in it is limited.
When using a virtual card, one can make payments for purchases made both locally and internationally. It makes everything seem a little less complicated.
Card types: virtual cards versus physical cards
A physical card is one that has a physical form, as implied by its name. As a result, it can be carried around in wallets, bags, and similar items. Virtual cards, on the other hand, are intangible and therefore cannot be seen or carried around with one's possession. This eliminates the need to be concerned about theft, damage, and other issues.
Physical cards are typically issued by financial institutions such as banks and other traditional financial institutions. Traditional banks as well as fintech companies have the ability to issue virtual cards, whereas physical cards cannot.
On the back of the card, you will find a sixteen-digit number that is unique to you, as well as three digits that are known as the CVV (card verification value). This number is essential for completing online transactions and should only be known by you and your associates.
In the case of physical cards, the card numbers are always the same and are valid for approximately 3-4 years before they are no longer valid. Once fraudsters gain knowledge of this permanency, they will have direct access to your account, putting you at risk of losing your money.
Instead of physical cards, virtual cards have numbers that are generated at random for each transaction. A user can choose the amount of money they want to put on their virtual card, and that money will be kept separate from their actual bank account balance.
What is the purpose of virtual cards?
Virtual cards can be issued for one-time use or for recurring use – such as in the case of a monthly subscription renewal – depending on the situation. People have frequently expressed dissatisfaction with the fact that they link their physical credit cards to subscription services, and that when they stop using those services or no longer require them, the subscription fee is still deducted.
The use of a virtual card to sign up for the service will avoid this problem because only the amount required at a particular time will be funded on the virtual card.
The use of virtual cards can help you protect your real account information, which is especially important when you are uncertain about the legitimacy of a website. Because only a certain amount of money is made available on the card, you can also keep financial excesses under control. You can transact in a variety of currencies, such as the Barter dollar card by Flutterwave, to make your transactions more convenient.
According to Experian, disposable card numbers can provide an additional layer of security in an age when retailer data breaches appear to be on the rise. Suppose a hacker manages to obtain your virtual credit card information. You can simply cancel that virtual card without having to close your entire account and start over with a fresh one.
Nonetheless, because virtual credit cards are intended for use online, there are some circumstances in which using a virtual number could be counterproductive.
Consider the following scenario: if you make a purchase online and later decide to return it and request a refund, you will have difficulty persuading the seller to send your refund to a different phone number than the one you initially provided.
Another thing to expect is that as virtual cards gain in popularity and adoption, scammers will employ their ingenuity in finding new ways to exploit the system and defraud individuals of their hard-earned money. The Country Manager for Visa made this point clear when he said:
“Over the past year, there has been a significant shift in people's lifestyle and shopping habits around the world. In addition, while the increased availability of online shopping and contactless payments is convenient, scammers are able to make more money by tricking buyers into paying for goods they will never receive or obtaining their personal information for financial gain.
Conclusion
With the Covid-19 pandemic ushering in an era of remote work, the World Health Organization (WHO) recommends that, whenever possible, contactless payments be used. However, while physical cards can still be passed from one person to another at the point of exchange, with virtual cards, the decision is entirely in your hands.
