About Virtual Cards

1. Introduction

One rapidly growing solution for payment frauds is using virtual cards. But what is a virtual card? A virtual card is an electronic type of card, not a physical plastic card, and it represents the regular plastic card we are used to having. A virtual card can be used for online purchases where a physical card is required. It has a 16-digit account number, the same as the regular plastic card, and also a 3-digit card security number such as CVV2 number as in the physical cards. The expiration date is automated and it changes every month. This helps to provide a secure method for online purchases since the card-generated number will expire and the user data cannot be stolen for fraud usages. Also, some virtual cards provide a limit on their maximum charge, which helps not to charge more than a certain amount. There are two types of virtual cards: merchant cards and p-cards, which is a procurement card. Merchant cards are assigned for a particular merchant and it cannot be used anywhere else. When the customers need to use a different merchant, they can request a new merchant virtual card. P-Cards can generate a virtual card for any transaction and it is used for business purposes. P-Card is mainly categorized as corporate travel cards, business-to-business cards, and declining balance cards. Corporate travel cards are used to generate a virtual card to pay for the company’s travel and entertainment expenses. Business-to-business cards are used to facilitate business trade between two businesses. Declining balance cards are used for a specific department and the user can only spend up to a pre-assigned dollar limit.

1.1. Definition of Virtual Cards

In the most primary terms, virtual cards represent credit cards that are created and managed in electronic systems and can only be used online. They offer higher levels of security compared to more traditional methods of online payment. This is because the card details are changing during the transaction process and so even if someone was to intercept the payment workflow and discover the detail of the virtual card, this information would be outdated before it could have any malicious use. There are also some additional security features that are offered by most virtual card suppliers that further enhance protection for the user. Often, virtual cards are single-use items, with each transaction being assigned a unique number and thereby preventing the misuse of card details following a legitimate payment being made. Also, it is possible to set minimum and maximum transaction limits for virtual cards and even to place a temporal restriction on when and how they are used. So such cards are often used in professional practice, such as digital marketing agencies that have multiple clients on their books and want to make it easy to manage the purchase of online adverts while keeping the finances of each customer distinctly separate.

1.2. History of Virtual Cards

Prepaid cards, being the lingua franca of e-commerce and technology, have been defined in various ways by different authors. It is a monetary payment device which is funded by the payer in advance and is used through a card, an electronic device or a mobile phone for withdrawing and transferring money in the account to make customary payment for goods and services. Virtual prepaid cards are similar to the general purpose cards since they can be used wherever the network provider is accepted, but the difference lies on the fact that they are not made from plastic, they are not tangible and they are normally sent by the issuer to the user through an email. These are an additional number of electronic bank general use prepaid cards with a fixed quantity value facility. It is important to denote the fact that when the payer makes an application to be given a prepaid card of any nature, the issuer scrutinizes the credit worthiness of the payer and may decline to issue the prepaid card if the credit worthiness is found to be low. Security and confidentiality of the virtual prepaid card user is provided through a number of identification details to the user like the personal account number which is a unique mark in the entire network. Also, the user will use a secure username and a personalized password known to the user only. The digital 256-bit SSL encryption security provision will ensure that all the transactions done strictly adhere to the existing technological advance provided by a secure socket layer encryption.

2. Benefits of Virtual Cards

Virtual cards are designed with the intention of enhancing security. This is a needful benefit that cannot be ignored. The privacy and funds security that many customers get, especially those who use the internet to make purchases, is a great benefit of virtual cards. The cards need no more than the preset credit amount, which will be depleted as purchases are made. This, in effect, means that in case of a breach or hacking, the affected will only access the funds in the card and not the cardholder’s bank account or main credit card account. Such a benefit cannot be enjoyed fully with traditional credit card and debit card use. Also, when shopping online with virtual cards, there is no need for a physical card and this adds a layer of security. When making a payment in a location with a public computer, the person does not need to expose personal or financial data since no one can master the details of the virtual card used. It is a solution for various forms of cybercrime like identity theft because the cardholder remains essentially anonymous. Virtual card use provides an opportunity to utilize one-off cards or single-use cards. These are cards that have a specified credit amount, expiry dates, and can only be used to make one payment. Such single-use cards can be created using personal banking services or some online payment platforms. Single-use cards are most popular when making high-risk transactions or when doing business with a lesser-known entity. Busy people will testify to this fact that online shopping can be so tedious sometimes. This is especially made worse by the regular need for manual typing of personal card numbers, security codes, billing addresses, and other relevant details needed in some sites. With virtual cards, details are entered once into the payment portal of a website and thereafter these information are simply attached to the card. This means with just a few clicks, the payment can an online purchase can be completed.

2.1. Enhanced Security

These virtual cards provide better security than physical credit cards. The main reason for the improved security is that each virtual card is locked to a specific payee. As a result, only one transaction can be made with a card. When a payee is locked with a specific card number, the virtual card is then set in an unusable state when that payee attempts to make a further transaction with the same card number. Thus, even if fraudsters manage to get hold of the virtual card details, they won’t be able to misuse it. However, such security measures like 3D Secure may not be found on all the websites which require a security code when using a card for online purchases. With the added security of a randomly generated security code, at the press of a button, virtual cards are far more secure than physical cards. By eliminating fixed codes and static card details, this reduces the risk of fraud. Plus, the user doesn’t have to worry about whether the website is secure or not when using a virtual card as the randomly generated security code makes this detail less relevant. Last but not least, frauds mainly apply for cards with poor security features. Given that virtual cards are packed full of security features in comparison to physical cards, there’s a reduced likelihood of fraud. This makes virtual cards an ideal solution for smaller businesses who lack the security infrastructure of larger corporations and are more hesitant to use virtual cards for business-related purposes due to the enhanced security and its abilities.

2.2. Convenient Payment Method

The last reason on the list is convenience. Virtual cards, by their nature, do not physically exist. This means that they can easily be copied, pasted, and stored on file in your internet browser. When it comes to making a payment at an online casino, for example, the process is seamlessly easy as you do not need to have the physical card on you. In addition to this, when using a virtual card, there is no need to type in your payment details each time you want to proceed with a transaction. When depositing at a casino, this can become a bit boring over time – but with a virtual card, you simply need to select it from a list of stored payment methods and enter your usual security code. By streamlining the payment process, it means that you can spend more time on the activities you actually want to be doing. For example, if you’ve only got an hour of free time to play casino games, you don’t want to spend 10 minutes of it having to set up a payment method – but with a virtual card, this is no longer a problem. This is certainly a key benefit for lots of people as in today’s modern world, there is less and less time to get everything done.

2.3. Cost Savings

With virtual cards, the cost savings are huge. Firstly, because only the exact amount required is paid, there is no possibility to overspend. Secondly, in terms of time and money, writing and posting paper cheques is a thing of the past. However, as with any card payment, the savings on administration time, cheque books, bank and post office visits, and paying for postage all serve to help the bottom line. Further, once streamlined virtual card payment processing has been put in place, time and money associated with reconciling and reporting expenditure will decrease. And interestingly, not only do businesses save time and money by not writing out and posting paper cheques, but virtual cards are altogether a more environmentally friendly payment method. With retained savings and less damage to the environment, it’s a win-win situation!

3. Types of Virtual Cards

These are the most common kinds of virtual cards. It is commonly used by persons who make purchases online because of the added safety that the card offers. Each time a customer uses a single-use virtual card for a transaction, a new card number is generated. This is one of the safety features that make this sort of virtual card well-liked. If somebody tried to intercept any transaction data, they would only get a portion of the card number and it would not be usable for later transactions. Single-use virtual card numbers are not new, and in addition to online buying for individuals like you and me, they are frequently used in big organizations for procurement purposes. Ease of use and additional security are among the top benefits of this sort of virtual card. It also offers better manage and flexibility. The initial first single-use virtual card number is generated within a card program which with the help of a person authorized to use such facilities. However, any additional card numbers that need to be generated would be for personal transactions.

3.1. Single-Use Virtual Cards

Single-use virtual cards are probably the most secure kind of virtual card. They’re also usually used for a single purchase rather than for ongoing cases. As such, if the data is stolen from the transaction, it can’t be used again as it will be rejected. Because they only work for online or telephone transactions, single-use virtual cards cannot be used in retailers and have no way of taking cash out from an ATM, making it an incredibly safe method for online purchases. These features make single-use virtual cards incredibly useful when adding security to an online transaction and preventing lasting damage that might result from things like identity theft. As a consumer, you simply request a single-use virtual card with the amount of money on it. Some of the most modern banks and building societies in the UK may load these cards immediately; alternatively, it can take two to four days. On the other hand, as they’re also loaded for the specific amount that is, for the cost of the transaction to be paid, this overcomes one criticism of some other virtual cards which may have to be loaded for more money than necessary, such as a minimum of £5 when paying for parking.

3.2. Reloadable Virtual Cards

Reloadable virtual cards are prepaid cards that can be funded numerous times. The customer can add funds with cash, bank transfer or another card. These types of cards are a perfect solution for ongoing payments or expenses, such as an expense account for an employee. For example, employers can issue reloadable virtual prepaid cards to employees for fuel, travel, and other business expenses, limiting the need for employees to carry large sums of cash or have the company’s credit card. These cards are also beneficial for parents who want to give children financial freedom whilst maintaining control over their spending, as funds can be added to the card whenever is necessary. The card is also beneficial for those who may have been financially impacted by the pandemic, as the cardholder can manage their spending and control their money, with the peace of mind that their money is safe if the card is lost or stolen. Most financial companies offer an app or some online platform where the card can be managed easily, particularly if it is a digital only card. This means that funds can be loaded by using a photo to capture payment card details and that card can also be blocked and unblocked, allowing for quick and easy control over the virtual card, particularly in case of loss or theft.

3.3. Virtual Prepaid Cards

Virtual prepaid card, it seems to be the perfect option for those who are starting to organize their personal finance. A virtual prepaid card can be used in the same way as a regular card, but it is only located on the internet. A card is composed of the card number, the issue date, and the expiration date. Some virtual prepaid cards use the CVV or CVC2 numbers – the number is usually found at the back of the card. So what differentiates the virtual prepaid card compared with the others? According to Wikipedia, a “prepaid card is a card that you load with money and then hold and spend on the value of the card. A virtual card is a card that does not come in physical form, but the card number and its data can be used to make transactions.” Virtual prepaid cards can be obtained through registering for the card online or requesting it on the bank site by pressing a button. It is advised by many to use a virtual prepaid card for online transactions and not Visa Electron or Solo debit, etc., because in case the data is captured in an unauthorized manner, the potential loss could be covered. Various banks provide the virtual prepaid card service. The ‘buxx’ by Visa provides a prepaid card for teenagers and it is accepted on any site that accepts Visa International purchases. Also, it provides parents the ability to check the money spending of their children. The ‘One VIP’ card by Bank of America provides the cardholder the ability to add as much money as he or she wants. Every time the card is used, cash back would be rewarded into the balance. Besides, there are also a few other models that are worth mentioning, such as the non-reloadable Visa prepaid e-card from TD Bank and the Canadian currency Visa prepaid card. Most virtual cards, from feedback from users, are cost-free to obtain. However, during the process of adding money to the virtual card, some charges might be incurred based on the loading method that you use. For example, a £3 charge will be made for using the Pay Point or Ukash method found in the ‘cashplus gold active plus and Flexi Visa card’. On the other hand, the ‘reloadable free prepaid Mastercard’ by Weshare Online provides free joining and no monthly management fee, and top-up can cost from 2% of the amount you load but it is in near time, free of charge. In my next posts, I shall make a comparison between prepaid cards, Bureaux debit cards, and also a credit card.

4. Virtual Cards vs. Physical Cards

Virtual cards and physical cards have one main difference: virtual cards are for one-time use while physical cards are used until the expiration date. Virtual cards are excellent for security, but often are difficult to use in stores. When it comes to online shopping, virtual cards are a huge benefit. Online shops often store card information, and keyloggers and other malware can steal that information. By using a virtual card, there is no risk since each virtual card is an isolated event. Online shopping ensures that the physical card must be made available to hand and the CVV number must be given. This is an extra element of security not available in stores. Most physical card details are stored on a magnetic stripe or chip on the physical card; because of this, hackers and cybertheft criminals can gain information easily. It is different if nearing the expiration date, a real physical card must be used as the card number is changed after the virtual card is generated. Virtual cards are predominantly intended for usage at any outlet which has an electronic terminal where a physical card can be used. Every time a transaction is made with a virtual card, the transaction is updated on the online card statement in real time. Also, the transaction details will usually be shown in real time as opposed to a few days later if you used a physical card. Every card number is uniquely generated and, as a result, the actual card number remains secure. Due to the aforementioned problems, it can be seen that virtual cards offer many more security features than physical cards do. In fact, they offer a lot more flexibility for both clients and businesses as well.

4.1. Key Differences

“Register cards are designed to address modern-day obstacles with safety and manage, which include helping corporations prevent unauthorized and fraudulent card use and streamlining the reconciliation manner with computerized accounting. Despite these advances, they still use a 16-digit card wide variety, have a 3- or 4-digit safety code, and have a magnetic stripe and an RFID chip—functions that every one digital card are doing away with. While many groups are transitioning to digital bills and playing cards, there is developing buzz some of the public and non-public area as stakeholders become privy to the blessings of the use of digital, virtual playing cards to make dealer payments. For instance, due to the lack of a physical card, digital card can’t be lost or stolen and are robotically extra secure than sign up cards. Virtual cards are an increasing number of user-friendly. While it’s miles vital to maintain a high level of safety inside the price manner, businesses also want to ensure that card use procedures are handy and green for employees so that enterprise strategies are not interrupted. As a result, virtual card has been engineered to combine seamless and intuitive fee methods. For example, a single-use virtual card may be generated with the clicking of a button. The corporation needs handiest input the quantity to be paid, at which factor the fee issuer will create a unique card range and system the charge straight away. There is not anymore the want to fear approximately storing and shielding your physical playing cards. With digital card, price issuers can offer advanced approaches to find and block possible unauthorized makes use of of a card.”

4.2. Advantages and Disadvantages

The virtual card is quite different from a physical card, and each has its own set of advantages and disadvantages. The benefits of virtual cards are increased security, the ability to set spending limits, and having an electronic record of all transactions. These all add up to a much higher level of control over what money is being spent and where. Generally, virtual cards and their associated accounts can also have multiple, unique usernames and passwords to improve security. In addition, some virtual cards are locked to a single supplier, making sure that even if someone does get the details fraudulently, they still won’t be able to spend money elsewhere. On the other hand, there are several advantages of using a physical card instead of a virtual one. Firstly, a virtual card can only be used online, whereas a physical card can be used in a shop or online. Secondly, if a customer needs a refund for a purchase made using a virtual card, the service provider may refuse to credit the card. This is because virtual cards may have only been issued to make a single payment, and not for repeated use or for any future payments – although some virtual cards can be used more than once. Lastly, payments are reflected on accounts in real time when using a virtual card, while payments made using a physical card often take a little while to show up. This means it can be easy to lose track of how much money is available to spend when using a card.

5. How Virtual Cards Work

Virtual debit card creates a new credit card number for every purchase. The reason for this is because of something called a “token”. This is a piece of data in the payment system. It is not secret (after all, the merchant has to get this number in the end) and it doesn’t contain any card or bank details (such as name, card number, sort code, and account number). When a virtual card is requested, the bank creates a token and links it to the real credit card. When you use the virtual debit card to make a purchase, the real card number is never used in the transaction – instead, the token is used and this token can’t be used anywhere else. Also, because the token is different from the purchase, the original token can’t be used afterwards. Virtual cards can be used with any merchant that accepts its payment network, and so there are no limits to what you can purchase with a virtual card. They can be used in person, online, or with mobile apps. However, some merchants (both in-store and online) require you to provide things such as your name, card details, and a billing address. This can make using a virtual card difficult, so always ensure that the merchant you want to use will accept a virtual card.

5.1. Issuance and Activation

The next step after creating an account with a financial provider who offers virtual cards is issuing the card. Like in the case of digital cards (internet cards), issuing of the virtual cards is done on the internet as well. First, the user logs in to the virtual card account created before. There is an option to add or issue a new card. When this option is clicked, the cards available to the user, such as issuing the virtual card or viewing the details of the virtual card, can be chosen. After selecting the option to issue a new card, all the available cards can be listed so that the user can choose the card that he/she wants to create. The cards are listed by the last four digits, meaning that for people who have many virtual cards, they can easily identify the card that they need. By clicking the card number, the user is able to view the details of the virtual card before the actual issuing of the plastic or virtual card numbers for use in web transactions. There are certain formalities that will have to be followed when issuing a virtual card, such as activation and at times, setting the limits for the cards. The user visits the card management section, which will normally have the option to activate the card selected. Clicking the option will prompt the user to select the way through which he/she would want to receive the confirmation code used in activating the virtual card. A confirmation code may be sent through a short message service (SMS) to the phone number that the user used to register for virtual card services. In such a case, the last four digits of the phone number are displayed and the user will have to confirm whether the number is correct. Alternatively, the user may choose to use the mother’s maiden name technique, whereby the next of kin’s name is used. The confirmation techniques are used in ensuring the safety and security of the virtual cards. The systems are designed in a manner that a card cannot be activated until the user goes through the activation process successfully.

5.2. Card Details and Usage

Starting from the publisher’s side, it is the funding from the appropriate customer account that prompts the user interface connected to the appropriate card solution. This leads to the retrieval of the actual and unique virtual card details comprising of the 16-digit card number, the expiry date, and the 3-digit security number. The virtual card bears the user’s name as well as the 16-digit card number. The cards can only be used for internet buy transactions, for example, buying products and services online. They have restrictions not to be utilized for mail or telephone orders. A virtual card can be used for an extensive period, 15 to 24 months, as detailed in the bank card data. This duration means the life of the plastic card since it is supposed one receives this type of card then registers for an internet account. The card expiry year and month details start on the date shown in the virtual card selection and the time of day. The last session illustrates that a virtual card can be in use until a step-up authentic card is brought into play. For the case indicated in the last session, it is important to understand that the virtual card is in action. The step-up inner message, card information as well as the final card information and the sign-out destination are indicative of the security details which configured during the fraud detection and the prevention scenario of a card user authentication.

5.3. Expiry and Renewal

Once it expires, the virtual card can no longer be used for transactions. Unlike the physical card account, the expiry date for a virtual card is determined by the system date and time. It does not have a fixed expiry date. The system date is the current date while the system time is the current time at any particular moment. As such, virtual cards are valid from their creation date to the card expiry date which is determined by the system date. Cardholders have the option of generating a new virtual card in place of an expired card. Through the “Replace Virtual Card” option, the system guides cardholder on creating a new virtual card. This option is located within the card summary page. Cardholders are required to select the card they would wish to replace from the list of available cards. However, if the card is expired, the system will prevent the user from using it for any transaction and instead, the “Replace Virtual Card” option will guide in getting a new card. For the physical card account, it expires at the end of the expiry month stamped on the card. An expired physical card cannot be used to generate new virtual cards or to make payments. Such an expired account has to be renewed by a system administrator or by an authorised person in accordance with the laid down processes and controls. An application for renewal has to be formally made and submitted to the system owner. The system owner will normally go through the system accounts and review the performance and transactions made on a particular account before considering processing the request for renewal. The cardholder is required to select the card they would wish to replace from the list of available cards. However, if the card is expired, the system will prevent the user from using it for any transaction and instead, the “Replace Virtual Card” option will guide in getting a new card. For the physical card account, it expires at the end of the expiry month stamped on the card. An expired physical card cannot be used to generate new virtual cards or to make payments. Such an expired account has to be renewed by a system administrator or by an authorised person in accordance with the laid down processes and controls. An application for renewal has to be formally made and submitted to the system owner. The system owner will normally go through the system accounts and review the performance and transactions made on a particular account before considering processing the request for renewal.

6. Virtual Card Providers

Virtual card providers are not exactly card networks in and of themselves, but they are noteworthy because they give customers the ability to generate virtual card numbers. This is a service with a variety of different applications. Popular virtual card providers, especially those that offer cards intended for one-time use similar to various methods of card number generating, include companies like Netspend and Privacy.com. These companies are featured prominently in both customer recommendations and expert reviews. Privacy.com, for example, advertises a free service that offers business groups “peace of mind” about internet security, while Netspend has both credit and prepaid options, making it a highly flexible choice. The services and features offered by these different companies can offer the potential user differing benefits. For example, Netspend promotes a pay-as-you-go payment plan with no minimum balance, which offers the user the freedom to use and fund the card how they choose. Conversely, for those who are comfortable and willing to plan out their finances, Netspend offers an optional savings account that accrues a five percent interest rate. Meanwhile, Privacy.com promotes security and simplicity, with no hidden fees for its basic service and a promise that cancellation will always be hassle-free. These two companies are not the only providers. Production card companies, including Entropay and Payoneer, provide the service, particularly in generating temporary card numbers and the provision of ‘burner’ card services. However, many of these companies offer popular card provider services to people looking for long-term card options, suggesting that the market of virtual cards being utilized as part of general everyday personal finance is actually quite limited. The benefits of virtual cards are obvious. With an inherently restricted potential for fraud and the ability to create solutions for specific financial needs and situations, it is unsurprising that customer opinion and financial experts alike have pointed out the strong security and functionality of virtual card services.

6.1. Popular Virtual Card Providers

If you have recently joined the trend of virtual card usage, you must check out some popular virtual card providers. Some of the popular digital or virtual card providers include Neteller, ecoPayz, iCard, Epay, TrueMoney, Diners Club International, MoneyPolo, Card and Walk, and Western Union. These providers offer various types of virtual cards for different purposes and with different features. For instance, Neteller provides popular and secure virtual cards that allow fast and secure online payments. Neteller VIP prepaid cards are connected to the Neteller account and offer fast funding, support 26 currencies, and have low cost or no cost in some specific transactions. EcoPayz has been long recognized as a virtual card provider whose business focus is on ecoVirtualCard. EcoPayz virtual and prepaid cards are fundamentally e-wallets that you can get and use in both physical and online card forms. With ecoVirtualCard, it is helpful for those people who want to securely pay online but without showing their personal information. EcoPayz virtual card is free to get regardless of whether you are an ecoAccount holder or not, but do remember to check for any card-related fees.

6.2. Comparison of Features and Fees

Let’s take a closer look at features and fees of virtual card providers we introduced. EntroPay – EntroPay charges a fixed fee on transactions, not the worst for a big transaction but it’s kinda too much for a small amount transfer. The maximum account limits at the time of card creation is $500. But you can have up to 3 virtual cards at the time of the account. Also, there are no monthly or annual fees for card issuance and no account inactivity charges. PayPal – PayPal only charges for fund upload and under some conditions on currency conversion but not on things I would usually use the card for. A lot of people use PayPal and many stores accept PayPal cards, so it would be good for managing online shopping. But to use all these services, you need to upgrade and apply for a physical card. ecoPayz – The accounts don’t need to be verified until you reach a lifetime deposit of £2500. Uploading funds from a bank account is completely free. Although there is no set-up fee, you will be charged up to £9.27 for card replacement. There is a charge of £1.44 for ATM withdrawal and ecoPayz charges 2.9% on your transaction amounts. The maximum card balance is £24000. Online transactions will not be charged on deposit and shopping. The first plastic card is free, an additional card will be charged £4.61 and postage for each card costs £4.61.

7. Virtual Cards in E-commerce

Virtual cards are almost exclusively used online. The 16-digit number, expiry date, and security code can be entered as you would a credit or debit card, but this is where the similarities end. Most virtual card payments will require the user to input a second code before the transaction is allowed. This might be a text message sent to the user’s phone, for example, called “two-factor authentication”. This means that even if someone’s virtual card details are stolen, a fraudster would not be able to use the stolen information because they would not have access to the code. This is the biggest reason that many people are using virtual cards – they have an extra layer of security that many normal cards do not offer. Also, if someone’s virtual card details are stolen, they cannot be used to go on a spending spree in the same way that someone could with standard credit or debit card details. This is because virtual cards typically do not have a physical version, so they cannot be used to make purchases in person, only online. This type of security is not just reassuring to the individual; in a business context, it’s a way of peace of mind when managing purchasing rights for more than one employee, for example. Cybercriminals are using increasingly sophisticated methods to commit fraud, such as hidden malware and “spyware” that can capture personal information. By using services that provide virtual cards, the risk of becoming a victim to these crimes can be significantly lowered.

7.1. Secure Online Transactions

You can use virtual numbers when you shop online, to help prevent your real card number from being stolen. While virtual cards can use your existing debit or credit card’s funding source, they’re even more secure because they create a separate and new access number instead. This means that even if this virtual card number is stolen, this won’t affect your real card or your account. Look for online retailers who support either VISA, Mastercard or Amex security code authentication. These card schemes can provide an extra level of authentication before you make a transaction. The card’s security code is also known as a CVV code and is normally a shorter, numeric-based code. When purchasing something online, a window will appear asking you to input this code for the transaction to proceed. This means that even if someone was able to capture the payment details you used, the lack of the CVV code being entered will stop the transaction from being processed. If you’re shopping via an online retailer who offers PayPal, make sure you use PayPal one-time card service. By doing so, PayPal will generate a virtual card number for that transaction on your behalf, which will give you even more protection and peace of mind for your online purchases. Another benefit is that it also stops retailers from adding your real card number to their systems and reduces the risk of fraud if their payment system is compromised.

7.2. Protection Against Fraud

The technology that underpins virtual cards – a randomly generated, randomly assigned set of 16 digits that differs from the primary account number – makes these numbers difficult to steal. To further protect against fraud, the virtual card holder can usually set limits on transaction values and adjust this as necessary. This is particularly helpful if a customer has concerns about storing payment details with a merchant. As the value of transactions is limited, the overall loss through unauthorized transactions is also minimized. In reality, the technology behind regular credit and debit card payments is quite outdated and this creates a window of opportunity for fraudulent activity to occur. However, virtual card technology is at the forefront of fraud prevention – and it is not difficult to see why. Virtual cards rely on a process known in the industry as ‘end-to-end encryption’. This means that the information being transferred between the virtual card provider and the merchant is completely confidential and is not accessible to anyone who the customer is buying from. This helps to reduce the likelihood of fraudulent activity occurring, as if fraudsters cannot gain access to the payment information then they cannot make a purchase. Also, if a fraudulent transaction does occur, the card holder is generally more protected than they are with a regular credit or debit card. This is because the customer can dispute the transaction and will not be charged. This differs from the rules around chargebacks, whereby the customer can request their money back if they have been charged for a transaction that they have not made. However, if an investigation carried out by the bank concludes that the transaction was authentic the customer will not be entitled to a refund. Such investigations can take several months and could result in financial loss if the result goes against the card holder. The protection offered through virtual cards provides customers with greater peace of mind and security, making this form of payment a more attractive option when shopping online.

7.3. Global Acceptance

Another concern that businesses have is whether a virtual card will be accepted internationally. This is a problem many original card sellers have to face. This used to be a problem. But technology has advanced and global acceptance of virtual cards is now widespread. The reason for this is that virtual cards work with any currency and they can be used to pay for goods and services in a currency different from the one the card itself is loaded with. The cards automatically make the transaction at the current exchange rate. Because the card number connects with the company’s original card system that is based in America, some users were under the impression that the card could only be used in America. But because the card uses the Visa payment system, any place that accepts Visa will also accept a virtual card from this company, no matter where you are in the world. This is a great advantage for businesses that need to buy goods or services from companies based overseas. Because virtual cards can be issued with a set limit and expiry date, and do not legally count as bank cards, businesses can give the card details to the company they need to pay but be secure in the knowledge that that company will not be able to use the card details fraudulently for anything else once the transaction is complete. Also, because the payment system is completely online, if the goods and services aren’t up to scratch, the payment to the company receiving the money can be stopped in its tracks with little to no bureaucracy.

8. Virtual Cards for Travel

Before stepping forward to understand the concept of virtual travel cards, we must insight ourselves what a virtual card is. Well, a virtual card is just like a credit card but it provides us with more flexibility and additional security. This provision means that there is no physical existence of the card. The card is obtained and used online, and all its details, such as the card number, the CVV code, and most importantly, the expiry date, just exist electronically. The card is just a string of digits in a computer file, rather than a physical object that you can hold in your hand. Because of this, it is often called a ‘digital’ card. Modern technology has made these cards possible to create and use. Thanks to these modern techniques, when you make a payment with a virtual card, the card itself never needs to send any information through the internet. This keeps all of your card details safe from any potential hackers out there who might try and intercept the data as it is being sent between the vendor and the bank to verify the payment. This makes virtual cards the most secure way to spend money online. The famous virtualcards.com is one of the websites where you can find these cards and can place an order for free. When we talk about traveling, all the concerns of choosing the right set of itineraries, selecting a good place of accommodation, and ensuring that the flight and bookings are completed without a hitch definitely provide a hurdle. However, with the right kind of virtual travel cards to back you up, much of the uncertainty is taken out of the money paid and your foreign travels can become a much more relaxing and anticipated experience. All the need for currency, insurance, and international spending can be handled with a virtual travel card, much like how they facilitate convenience in online shopping.

8.1. Convenient Travel Expenses

For instance, a virtual card may have the facility to be pre-loaded with necessary funds during an executive trip. Any subsequent changes in spending can be continuously updated by automated financial updates. By incorporating virtual cards in travel, it can help to streamline the spends that are associated with travel by employees and management of the company alike. Moreover, virtual card payments for travel related expenditure do not attract any kind of surcharge, regardless of the nature of travel itself (e.g. domestic or abroad). This in turn makes the virtual card for travel a cost-effective solution.

Virtual cards can be extremely beneficial for business travelers who are frequently moving around the country or even across the globe. By using a virtual card for travel, it can help you manage and keep track of your travel expenses. For example, before you start your journey, your company could provide you with a virtual card which can be utilized for booking flights, trains or hotels etc. With a virtual card for travel, you can save time and eliminate the hassle of standard expense processes. This is because virtual cards allow you to automatically track and reconcile travel expenses.

8.2. Foreign Currency Payments

The foreign exchange market, also known as forex, allows someone to pay in a currency different from the currency of their card. For example, if the card is denominated in euros and the person wishes to pay in dollars, the card scheme converts the amount spent in dollars at the rate at the time the payment is processed. However, it is important to know the rate used because sometimes an unfavorable rate can be applied or a worse rate than expected. Usually, the virtual cards provide a rate, which is called the “scheme rate”. This rate is the exchange rate selected by the card provider from the range of rates available in the wholesale currency markets for the applicable processing date, which is either the date the transaction is processed by the card provider or, if the transaction is a pre-authorization, the date the pre-authorization is lifted. The description of the rate used is contained in the card terms and conditions, and the customer has the right to request information about the rates used. This rate transparency, and the fact that the scheme rates usually provide a good deal against the standard “high street” rates, means that such cards are frequently used by travelers, including employees of companies as part of a corporate travel policy. When a purchase or an ATM withdrawal is made in a currency different from the national currency of the card, the card provider charges a foreign exchange fee. This is typically referred to as a “cross border handling fee”. Details of the same can be found in the card terms and conditions and vary by provider. The scheme rate and any foreign exchange fees are generally a good deal for the customer and mean that using a virtual card is an easy and cheap way to buy items when abroad. However, it is always a good idea to check the card’s terms and conditions to ensure that the foreign exchange process is clear to the person using the card. Also, it is important to check if the option to pay in the ‘local’ currency, if it appears, as some merchants abroad offer the option to pay in the payer’s home currency, for example that dollar transaction being offered to be paid in euros. This is known as “dynamic currency conversion” and although it may seem more straightforward to choose the home currency, the exchange rates applied by the merchant may not be competitive or may have hidden fees, potentially making it an expensive option. For this reason, and to benefit from the scheme rate described above, it is recommended to always opt for local currency payments.

8.3. Travel Insurance Coverage

First and foremost, let’s clarify that the concept of travel insurance covers shall only be applicable if the company has opted to have the travel insurance policy to be engaged. The cardholders shall be entitled to the benefits under the travel insurance scheme as long as the travel fare is charged to the virtual card. I am sure that there’s a lot of different views on the question of whether the standard travel insurance policies offered in the market sufficiently protect employees in today’s working environment as many employers are increasingly expecting their employees to travel abroad in furtherance of the employers’ requirements. In this connection, the concern is that because the travel insurance policies are designed for the general market, they may not be tailored to suit the specific working conditions of some of the employees especially in the hazardous industries. That said, travel insurance policies incorporated into the virtual card program is expected to provide coverage that is sufficient to protect the employees who are under the obligations to travel. It is also possible that the same virtual card may be designated to a group of employees who travel frequently and this arrangement is quite common in a corporate working environment. In such scenario, the corporate entity shall be the policy owner of the benefit of the travel insurance and in case of any disputes between the insurer and the employees, the corporate entity shall take up the management and resolution of those disputes.

9. Virtual Cards in Business

Virtual cards are increasing in popularity in the workplace. They are being used in a number of different business scenarios. The main reasons why businesses use virtual cards are cost saving, improved security, and better and easier management of company finances. Virtual cards are very popular for business expenses because it is easy for administrative staff to generate a unique card number each time a payment is to be made. This makes it easier for an administrator to track what expenses are being made and by whom. If a physical company-issued card is lost or stolen, every payment that is made between the time that the loss is reported and a new card is reissued is financially the company’s risk. However, as virtual cards are only valid for a short amount of time, the financial risk is reduced to the few hours that it may take to report a loss and for a new virtual card to be generated. Furthermore, a virtual card means that the employee does not need to put the amount they have spent on their personal credit or debit card and then claim it back from the company. This not only is great for employee relations but also means that the employee is not out of pocket – this is especially important for larger expenses that the employee cannot afford to pay upfront. Employees can be reimbursed even quicker with virtual cards. When an employee uses their own money to pay for something that they will claim back from the business, it can take a long time from the point of submitting the expense to physically receiving the money back from the company. However, with virtual cards, an administrator can ensure that the employee is reimbursed the same day the expense is submitted. And, with virtual cards, a business can set up a system where the company has access to detailed statements of who has spent what and where. For example, virtual cards can be set up so that the physical card is given to a member of staff, it does not matter who uses the card to make purchases. This card is known as a Ghost card. When a payment is made, that employee has to quote a specific number (known as a reference) so that the administrator can say that the payment has been authorized. By being able to track every payment that is made, these cards are very useful for businesses when it comes to paying regular subscriptions or services. Businesses can ensure that money is not being wasted on paying for services that are not used, as a detailed statement of who has made payments and when can be accessed. Businesses use virtual cards for a number of reasons. However, the financial and administrative savings associated with using virtual cards for business expenses make the most compelling case for businesses to transition from traditional methods of payment (Simon, 2018).

9.1. Expense Management

Your company will issue its employees with virtual expense cards in order to cover various costs as and when they occur. This means that there will be no need for employees to use their own money to cover expenses before claiming these back from the company. Also, it means that there will be less risk of employees spending money which is then claimed back from the company despite these costs having nothing to do with the business. When an employee makes an expense claim, they can simply log into the company’s expense management system and upload a copy of their receipt with some additional details such as confirming how the money has been spent, if VAT is included on the claim and so on. This receipt then becomes an electronic record which is attached to the claim and this can then be approved by a manager before any money is released.

9.2. Employee Reimbursements

When it comes to employee reimbursements, virtual cards have the potential to offer much more to businesses and employees alike. Expense reports are often filled with receipts from transactions where employees used personal funds to cover the costs of business-related expenses. This can result in a slow and drawn-out process to collect, review, and ultimately process the reimbursement as someone within the organization. Creating and delivering a virtual payment card, like the ones mentioned in the previous section, can drastically reduce the amount of time it takes to process these reimbursements. This is because virtual cards can be automatically set up to be able to accept and store any returned funds back onto the virtual card itself. What is more, cardholders are always able to check online and in real-time to see whether or not their expense has been settled by the line, reducing the need for back and forth between the employee and the company. Lastly, with virtual cards offering upper management the opportunity to exert more specific controls and rules over the usage of each card, there may be no need for a formal expense reporting process at all. By only allowing the cards to be used for very specific payment types or companies, the issue of expenses that fall within grey areas of company policy is eradicated. This may be able to save employee time in terms of sorting and sending off purchase records and management time in reviewing and potentially disagreeing over whether an expense should be reimbursed.

9.3. Vendor Payments

One of the major pain-points for businesses is the challenges faced by accounts payable. Virtual cards offer some interesting potential to reduce the stress and free up the time for the team. Vendor payments can become more secure and flexible with the use of these cards. The system is similar to purchasing cards with the noticeable difference that these virtual cards are created solely for one-off payments. Businesses can instantly create a card, pre-load the exact amount of a payment and assign the payment to a specific supplier. This eliminates the need to create and manage suppliers or storing sensitive supplier bank details within the system. When the payment is made, both the finance team and the supplier receive an instant notification from payment providers such as MasterCard B2B Hub which provides immediate confirmation and credit-worthiness reassurance for businesses. Businesses are able to check exactly when the payment has been made to the supplier and the virtual card can also be programmed to automatically self-destruct once the payment is taken, effectively reducing the risk if the supplier attempts to take multiple payments. Using virtual cards to make vendor payments has been shown to help cut resource time in finance teams and reduces the need for finance leadership interaction. The process to set-up the virtual payment system is not unreasonably complex and can be done relatively quickly compared to many payment system configurations. Businesses often use a third-party provider. These providers have entire payment platforms to help facilitate secure payments and build in the benefits of additional time in case a supplier may charge the card too early, dynamic discounting to take benefit of earlier payments and comprehensive spend analytics to help provide a clearer insight into how effective different payments are.

10. Virtual Cards and Privacy

Fraud and identity theft are serious problems in the credit and debit card industry. Virtual card companies take client privacy and security seriously. For example, privacy is a big concern for many consumers. When they make a purchase with a traditional credit card, their personal information is being transmitted to the merchant. Over time, some consumers have become uncomfortable with the amount of personal information that is being shared. Privacy with a virtual card is actually more secure than a traditional credit or debit card. Since virtual credit cards carry a different set of numbers than the client would use on their actual card, even if there is a data breach, the client’s personal account remains safe. Also, the client’s financial information is not retained by the merchant. This means that even if a merchant’s system was hacked, the client’s information would not be accessible to the hacker. This can be very important with respect to identity theft. Identity theft is the illegal use of someone else’s personal information in order to obtain money, goods or services. When a hacker or a dishonest employee obtains access to a consumer’s unencrypted financial information, this can enable identity theft or other crimes through the fraudulent use of such information.

10.1. Confidentiality of Personal Information

Section 10.1 gets a new title that reflects the protections available for personal information. This section requires notice to the Bank within seven (7) days of learning of any unauthorized use of a Card and requires notice to the Bank within seven (7) days if a Card is lost or stolen. This section also expands the confidentiality provisions to require that any third party that a Consumer selects as a User of a Card must also agree to keep the Consumer’s personal information confidential and provide an affidavit or electronic equivalent that includes an agreement to keep the Consumer’s personal information confidential. There are two minor changes that exist in the prior version of the Agreement. The first change updates the notice provision to allow the Bank to request any information in writing and to provide for any changes to the Consumer’s mailing or email address. In other words, notice of any change to the personal information of a Consumer must now be provided to the Bank before the change by updating the registration details. This will enable the Bank to maintain effective contact with each Consumer. The second change deletes any conflict of law provisions in the prior Agreement to ensure that the terms in this Agreement will apply – regardless of the state laws where the Consumer resides or where the Consumer may use the Card. This new section (10.1) will require Users of the Bank’s virtual cards to better safeguard personal information. The Consumer protections will help more effectively guard against unauthorized use of our virtual cards and help to minimize the risks associated with virtual payment systems as compared to more traditional payment methods, such as with magnetic stripe or chip cards.

10.2. Protection Against Identity Theft

So virtual cards actually promise to provide not only significant benefits to individual consumers in terms of theft prevention, but also lowered costs and improved efficiency in the support of ecommerce and the retail industry alike.

As long as the security of virtual card numbers is maintained by banking services, the opportunity for large-scale theft of card and account numbers will be substantially reduced. By contrast, over the approximately 50 years that US credit cards have been issued, millions of plastic cards (with their lack of fund specific use and their 24/7 access to account data) have been compromised; requiring billions of dollars to be spent to reimburse losses as well as improve card security and implement periodical reissue of new cards and account numbers.

Virtual cards provide a high level of theft detection. This is because there is only a short period of time when the virtual card number is valid, and that is limited to the time when the owner has actually authorized the completion of a specific transaction. Therefore, a virtual card inhibits not only currently illegal activities like phishing and pharming, but also theft through the illegal sale and purchase of personal or account information on the internet. Such information is of no fraudulent value because virtual cards only provide temporary and limited access to actual account data.

In some ways, virtual bank cards provide better protection than traditional plastic cards. For example, they are not subject to card skimming or ATM “shoulder surfing.” This is because thieves simply cannot engage in these sorts of illegal activities when the banking card is a “virtual” instead of a physical item. In addition, virtual cards are not subject to the misuse occurring when cards are lost or stolen. This is because the random (and temporary) 16-digit number assigned to a specific transaction is no longer valid once the transaction is completed. Thieves cannot “discover” the 16-digit transaction number and use it to make additional purchases.

11. Limitations of Virtual Cards

Compatibility Issues – Currently, there are no officially recognized state standards for e-commerce or uniform commercial code that provide guidelines on how virtual cards work. Moreover, some card and account numbers are not closed with the industry-standard LUHN evaluation. The closing number must pass the number evaluation algorithm to prevent accidental numerical errors and fraud.

Every effort has been made to include the maximum number of online retailers to ensure that the majority of cases can be accommodated. However, there may be times when a specific retailer cannot be reached. In such cases, it is recommended to email the details of the retailer to the support service.

Additionally, all commendation for repeated billing has to be confirmed with a transaction active card. Once the usage limit is reached, the supplier can receive the next payment when the primary payment is due. This is clearer compared to the corresponding physical card product, which is the process of transitioning from E-Master Card sanction or, for instance, could be followed. Also, with a virtual card, the account can be enabled from a specific date. After that date, no use of the card will be possible if the primary payment card is not combined with the service. However, this does not affect the physical product, only the virtual card account.

Virtual cards are all issued by a particular supplier, and usage of a specific card will probably be confined to the provider’s merchant code. This means that if the card was compromised, the user’s exposure to fraud will be limited. Though the overwhelming majority of online retailers accept the virtual card, there may be occasions when they do not.

11.1. Restricted Usage

In some cases, requests made with a virtual card may be restricted. They won’t work for addresses that don’t match the billing address, for example. This is to protect against fraud and misuse. If a payment is being made in a different currency and a currency conversion is required, the virtual card might not work. This is because the card issuer might not be able to immediately provide details of the amount in pounds. Another common problem is related to the checkout for some services. If the virtual card is being used for a service that must first validate the card and then automatically start or continue a subscription (like Spotify), it’s likely that the virtual card won’t work. This is because the temporary charge to the virtual card to validate it will not allow the service to automatically stay live when the temporary card charge is removed. There is a ‘grace period’ when using a virtual card, usually up to 20 days from the date of creation, where the virtual card can still be used even once the physical card has been activated. However, if the card created is done so after this ‘grace period’, the virtual card will only work for five days. Such restrictions set by the card issuer are in place to reduce the reliance on virtual cards and prompt customers to make use of the physical card as intended. Customers should check any relevant terms and conditions, like those provided by the card issuer, before they start using a virtual card.

11.2. Compatibility Issues

Further complex issues which are related to system compatibility must be effectively addressed. In most instances, virtual cards issues arise due to confusion brought about by dummy or false credit card numbers. Such is used to make payments on foreign based e-commerce platforms. The concerned companies have to ensure that they are in a position to work with the existing card formats and data transmission methods. Unlike real credit cards which have standard formatting, virtual card formats may vary from one issuer to the other. The type of data received by the system may also vary and technical support departments must be kept operational so as to ensure that system compatibility issues can be effectively solved. The cardholder has to understand that there are challenges experienced when trying to link virtual cards to mobile payment platforms such as Apple Pay. The reason as to why it is hard to link this type of cards with such platforms is due to stringent verification requirements. With Apple Pay, a card must be added to the passbook in order to facilitate the verification of card details by the card’s payment network. Any attempts to link Apple Pay to a virtual card can be faced with numerous challenges especially when trying to verify the card information. Subsequently, the issue of system rejection becomes quite eminent. However, it is clear that a lot of technological and infrastructural changes are currently being in order to solve the existing compatibility problems and enhance the effectiveness of virtual card transactions. Due to viable solutions and increased demand for secure and more convenient payment methods, the future of virtual card transactions continues to be quite promising.

11.3. Potential Service Disruptions

Among the most prevalent concerns surrounding the adoption of any new-fangled technology are service disruptions. Whilst not a frequent issue, since virtual cards are reliant on internet connectivity, the chance of a disruption to the services is a risk that is always present. Suddenly being unable to make a payment due to a lack of internet connectivity is a scary thought, but it’s a fear that traditional card users needn’t worry about. All reputable virtual card providers will have contingency plans in place for technology failures or human error. Due to the modus operandi of virtual card technology, in the rare event of a service disruption, there is a real risk that virtual cards simply won’t function. When a customer wants to make a payment, the ministering bank must verify the transaction and would revert an error back with a fail-safe from the customer being unable to authorize the transaction. With virtual cards that require access to a smartphone app for producing verification codes, the app’s service might disrupt, meaning any payments will be declined until the disruption is resolved. To counter this risk, applicants for virtual card programs that employ such technology must appoint an alternate person to assume the responsibility of card referee. This refers to the individual whom the card is registered to and is responsible for transacting on behalf of the card. In the event of a service disruption, the card referee can change the card’s authority using a code generated by the app, and the service provider will change the card over to a status that requires no verification from the app. Card holders will be informed of any disruption to service as soon as possible. If a virtual card is lost, stolen, or the card referee wishes to stop the card for any reason, they are able to instantly freeze the card using the app or the ministering bank’s online portal. This is an area where virtual card technology outpaces traditional cards.

12. Future Trends in Virtual Cards

Jurisdictions in certain global regions have either placed legislative barriers to prevent the greater use of virtual prepaid cards with cryptocurrencies, or are seeking to introduce measures which would restrict their use. For example, in the European Union, the fifth anti-money laundering directive, or MLD5 for short, has been implemented as of January 2018 and member states have until January 2020 to transpose its laws into their national legal systems. MLD5 seeks to bring greater regulation and clarity as towards the use of cryptocurrencies and takes further steps to align the use and controls of typical fiat currencies, such as the United States dollar or the pound sterling, with digital currencies. However, regulatory change is not a global standard and it is important to consider that due to the ever-evolving nature of virtual cards and cryptocurrencies, different regions may seek to introduce more or less restrictive new laws at any point in the future.

Blockchain technology utilizes a shared digital ledger and establishes links of encrypted data, called “blocks”, to record multiple transactions over time. Modern-day cryptocurrencies such as Bitcoin and Ethereum use blockchain technology to record and verify all transactions made in that cryptocurrency. Nevertheless, experts predict that blockchain technology could be introduced to virtual cards in the near future. By using ledger technology, virtual cards could be made even more secure due to their method of real-time data validation and master encryption key creation. For example, if a user wanted to generate a virtual card using their computer, the process could be verified and validated instantaneously by using nodes in the blockchain network to cross-verify the steps of card generation and the card would be able to use after the process is completed. Over time, if this technology becomes the norm for virtual cards, it will greatly enhance the level of security that virtual cards can offer and therefore ease the adoption of virtual cards by customers that are currently reluctant to embrace this form of payment.

Card issuers aim to promote virtual wallets and carry less plastic around when shopping or using online retail services. By linking virtual cards with existing mobile wallets, users will be able to easily access virtual cards in their accounts for easy payments with a mobile device, either in person or online. A further development to this could be to automate virtual card generation through mobile wallet commands. For example, the user could request a card to last thirty minutes to make a transaction and have a mobile wallet application automatically generate the card from the app, reducing the time between the decision to make a payment and the completion of the payment itself.

The virtual cards industry is growing at an exponential rate and set to disrupt the physical card market globally. The possible use cases for virtual cards and types of supported transactions are driving factors in their adoption and use around the world. As technology advances and becomes more secure, experts forecast that the use and acceptance of virtual cards will only increase, citing multiple trends already in motion.

12.1. Integration with Mobile Wallets

One way to integrate virtual cards with mobile wallets is through the use of tokens. In recent years, some card providers have broken away from traditional mobile wallet methods and employed tokenization processes instead. The card networks (such as MasterCard or Visa) replace the 16-digit primary account numbers on a physical card with a unique alternate card number, or “token” which is used for digital transactions. Since the token is not the actual card number, even if the token is intercepted or compromised, the primary account number is still protected. To make a tokenization request, the mobile device authenticates with the mobile wallet server using a secure remote management and data-per-application processes. If successful, then the mobile device receives the token and corresponding token information which is sent to and stored in a secure element or host card emulation approved by the card issuer. The token obtained in the mobile wallet is utilized in the authorization service and is sent to the card networks along with transaction data and the generated cryptogram. By using mobile wallets to securely store and transmit token data, the virtual card is able to exploit a variety of benefits such as the ability to securely generate one-off virtual cards with a shortened life span. This allows for temporary cards to be produced and transmitted directly to a customer’s mobile wallet and can be used for a predefined period of time (for example, until a service is terminated or a subscription expires).

12.2. Blockchain Technology

By utilizing this technology, a new transaction on the blockchain has to be verified, which is done through a process called mining that will be elaborated at section 12.3. Also, each transaction is sent to all the surrounding nodes, which are computers with the same blockchain and are connected to the network, for verification. When each and every node agrees that the transaction is valid and the block can be added to the chain, the transaction will be completed and the new block’s unique code will be used in the subsequent block to create the link that we have discussed earlier.

Another way of implementing blockchain technology is by using decentralized cryptocurrency to provide an alternative method on the creation of virtual cards. Cryptocurrency refers to a digital or virtual currency that uses cryptography for security. Unlike the traditional centralized system, where there is a need for a central computer to authorize the creation of the virtual cards and the management of the currency, the decentralized nature of the blockchain technology allows the customers to have a direct communication with the service provider. For instance, as blockchain maintains a ledger of every transaction on the network by recording every change request made, this will provide a platform where different cryptographic keys can be used to authorize the creation of a virtual card and the change of ownership of the digital currency. This leads to another advantage of using blockchain technology on virtual cards – the customers have more freedom on managing their virtual cards, especially when they are using a cryptocurrency as an option for making purchases on the virtual cards.

Implementation of blockchain technology can ensure the security features of virtual cards as they are made up of a series of digital blocks that are linked together using advanced cryptography. With blockchain technology, as every digital block contains some sort of information (such as the transaction made and the previous block’s unique code), it can help to record all the transactions made on a specific virtual card. The digital blocks and the codes can act as a form of storing information where if future potential hackers attempt to modify any of the codes, the link between a particular digital block and the potential hacker’s version of the unique code will be broken, making the transaction information vulnerable and thus, the fraudulent activity will be detected easily.

12.3. Virtual Cards for Cryptocurrencies

Not only has the growth in cryptocurrency trading itself increased, but now with the development of virtual cards for cryptocurrencies, the proportion of people who have access to and will potentially choose to use digital currencies in their day-to-day lives will also increase with the greater possibilities for direct and easier access into the world of digital and virtual currency use.

Also, using a virtual card means that online financial data and offline physical cards do not need to be linked to an individual’s primary banking and financial accounts. By having the virtual card specifically dedicated to cryptocurrency transactions and not linked to primary banking or card details, it is possible to reduce the potential risk of fraud or unauthorized access to an individual’s traditional financial accounts, as a user’s data for normal everyday purchases or bill payments is not freely or widely accessible from the use of their cryptocurrency-related virtual card.

Virtual cards which are designed for use with cryptocurrency accounts are able to offer a range of benefits. Firstly, they give the account holder the ability to utilize their cryptocurrency for transactions in a range of different purchase scenarios. This is particularly beneficial in helping to overcome the traditional issue of limited acceptance of digital currencies in comparison to the range of mainstream internationally accepted fiat currencies.

One of the latest trends in the world of virtual cards is the development of cards that are specifically designed to be used with digital currencies. In the cryptocurrency and blockchain world, we are seeing a rise of virtual cards that are directly linked with a user’s digital currency holdings. These cards provide a usable and real-world application for a range of cryptocurrency options, allowing for greater access and integration of digital currency use.

Note: Some popular providers of virtual cards include :-

Revolut: Revolut offers virtual cards as part of their digital banking services. You can create and manage virtual cards through their mobile app. Website:  https://www.revolut.com/en-US/

Privacy.com: Privacy.com allows you to generate virtual cards for online transactions. Their platform provides control and security features to manage your virtual card usage. Website:  https://privacy.com/

Neteller: Neteller is an e-money transfer service that also provides virtual prepaid Mastercards. These cards can be used for online shopping and other transactions. Website:  https://www.neteller.com/en/features/cards/virtual/

Skrill: Skrill is an e-commerce platform that provides virtual prepaid Mastercards. Their virtual cards can be used for online transactions and have additional features like instant withdrawals. Website: https://www.skrill.com/en/skrill-prepaid-mastercard/skrill-virtual-card/

N26: N26 is a digital bank that provides virtual Mastercards as part of their banking services. Their virtual cards offer convenience and security for online transactions. Website:  https://n26.com/en-eu/virtual-card

BitPay: BitPay offers virtual Visa cards that can be loaded with cryptocurrencies, such as Bitcoin. These virtual cards enable you to spend your digital currencies at any online merchant that accepts Visa. Website: https://bitpay.com/card/

Advcash: Advcash is an online payment platform that provides virtual and physical cards. Their virtual cards can be used for online payments and come with additional features like currency exchange and cryptocurrency support. Website: https://www.advcash.com/en

BitPay Card: BitPay offers a virtual and physical prepaid card that can be loaded with cryptocurrencies. Their virtual card allows you to spend your digital currencies at any online merchant that accepts Visa. Website: https://bitpay.com/card/

Paysera Virtual Card: Paysera offers virtual Visa cards that can be used for online purchases and payments. Their virtual cards provide a convenient and secure payment solution for individuals and businesses. Website: https://www.paysera.com/v2/en-GB/index

Apple Pay: Apple Pay provides a virtual card called Apple Pay Cash Card. It is a virtual prepaid card that integrates with the Apple Pay wallet, allowing you to make secure payments and send money to others. Website: https://www.apple.com/apple-pay/

Samsung Pay: Samsung Pay offers a virtual Visa card called Samsung Pay Cash Card. It is a virtual prepaid card that allows you to make payments using the Samsung Pay app. Website:  https://www.samsung.com/us/samsung-pay/

Google Pay: Google Pay provides a virtual Visa card called Google Pay Card. It is a virtual prepaid card that can be used for online purchases and payments through the Google Pay app. Website: https://pay.google.com/intl/en_us/about/