It is almost impossible to talk business without mentioning cards. Credit cards, gift cards, and fleet cards are some of the common types of payment cards we have around. Apart from your bank card, you can also obtain virtual cards that you can use for online shopping and other transactions. There are various reasons why people opt for virtual cards in place of ordinary plastic payment cards.
Are you thinking of buying a virtual card? Then you need to fully understand how they work and a few details before choosing the card type and provider. Some commercial banks provide virtual cards when transacting at various outlets to mask your banking information. However, it is possible to acquire a virtual card non-related to any bank so that you can preload it before completing a purchase.
These are five things that you need to understand about virtual payment cards.
1. Virtual Cards are Meant for Single-Use
As you must be aware, the reason why banks provide virtual payment cards is to minimize fraud from card misuse. By obfuscating your bank details, nobody can do a transaction using the card you receive for virtual payments. The virtual card expires immediately after the first transaction, making it void. Even if someone tried to record the card details, they cannot transact anywhere with it.
Some banks also limit the card use to a span of 24 hours. After ordering your card, you need to use it as soon as possible. If a period of 24 hours expires before making your purchase, the card expires, and you have to order a new one. This limit is meant to block any misuse of the service without your consent.
For the same security reasons, some banks have stricter conditions on the use of the virtual card. You can only use them to pay locally. These virtual cards are not allowed for online transactions to pay merchants outside your country. However, this limitation applies to only a few banks.
2. Virtual Card Refunds
Purchases come with various inconveniences. For some reason, it becomes necessary to return the purchased items and seek a refund. However, as you know, payments processed online or via POS can only be refunded to the payment method you used. This causes worries for people who want to buy using their new VCC.
Since most virtual cards expire immediately after your first transaction, you would wonder what happens when you want a refund. The good news is that the refunds are acceptable with the card you used for the purchase. The bank will credit the refund to your main bank or credit card account. You have nothing to worry about purchasing online or with any merchant using your virtual card.
Another concern would be the balances that remain on the card. We know that card payments incur transaction charges, and we need to load a little extra to complete the transaction seamlessly. But what if there is a balance after the purchase? Or better still, you got a coupon after ordering your virtual card, how do you pay without losing any money? And what if the card expired without purchasing with it? To all these questions, the answer is, “you get a refund to your main card, and the virtual payment card becomes obsolete.”
3. Virtual Cards Create Better Manual Reconciliation
When you are shopping online, you can only use three methods of payment. Although there are so many payment processors using various names for their remittance services, you will be obliged to use one among the three – ACH, bank wire, and credit card transfers.
The problem with the first two methods is the limit of characters you can write a custom message when sending out a payment. This limit can be a barrier because you may want to send enough information regarding your payment to the merchant. The merchant needs further instructions about your transaction for them to serve you better.
With card payments, your transaction tags the products you are paying for, including custom messages to the merchant regarding the design, shipping option, and anything you want to inform the seller. If buying online, the payment also adds the invoice number to the transaction and informs the seller about your purchase. You can use any multi currency card to make payments on your preferred eCommerce site.
4. Virtual Cards Are Convenient When Mobile Payments Are not Supported
Apple Pay, Samsung Pay, and Google Pay are the most common methods of payments through your smartphone. They use your credit card information to complete transactions and send the merchant a payment token to authorize you to access their services. Although the apps can access your banking details, they do not share the information with the seller, keeping your purchases secure.
Everybody knows that Google Pay and Apple Pay are necessary when you want to purchase applications for your phone from Play Store or Apple Store. But that is not the end. All the three payment options allow you to send money directly to any person in your contact list. You can, for instance, send money from your message app.
Samsung Pay also allows you to pay various merchants in stores where Visa cards are accepted. Instead of carrying your credit card, use the app to complete the transaction. But not so many people accept mobile payments yet, especially when shopping globally. That is why a virtual card is essential to protect your bank card when making purchases at various terminals.
5. You Can Access Virtual Cards with any Banking Card
Whether you have access to a credit or debit card should not bother you when you want a virtual payment card. With many banks, you can create a virtual card for online transactions under your card management. If you do not have a credit card, you do not have to apply for one before you can have the virtual card you need.
However, each bank has its distinct rules. You may want to confirm with your bank what you need before applying for a pseudo card. You will get further details including the cost of generating the card and its transaction charges.
Some banks may, however, limit you to local shopping. Without a VCC security code, you cannot make any purchases online. I was once disappointed with this kind of limitation. Maybe you should clarify what you minted to do with your VCC to see if they have any option for you.
Card payments are global payment solutions that drive businesses. But many people either have limitations as to how much they can spend online, or whether they can spend money on international purchases. With pseudo cards, everybody can use their bank or card balances to complete payments at checkout without worrying about credit card fraud that could arise when shopping at a merchant store or sending funds online.