What are virtual cards, and how do they work?

Online payments are now a part of our everyday life. We shop, book flight tickets, order food and groceries, and almost everything using cards or UPI apps. But one concern that still bugs consumers is online fraud and identity theft. Here, virtual cards come to the rescue. It makes digital payments safer.

So, today, we will discuss virtual cards, how they work, and which banks offer them.

What are virtual cards?

Let’s explain it—a virtual card is a digital version of a physical debit or credit card. Let’s elaborate on this now. 

Your virtual card provider randomly generates a card number linked to your bank account or credit card. Now, you can use this card to make online payments. The operation is similar to a physical card. Thus, like physical cards, you use the card number, CVV, expiration date, and checkout to make payment.

Virtual cards often allow limited use to protect your main card details from being shared on every website. You can only see the funds that your service provider approved.

How do virtual cards work?

• First, you must generate a virtual card through your bank’s app or net banking portal. Once you have it, you get a unique 16-digit card number. It also has a CVV and an expiration date. Yes, this is similar to your physical card.

• The virtual card connects to your bank account directly. Or to your main debit or credit card.

• Some cards may be limited to one-time use, whereas you can use others multiple times.

• You can use most virtual cards for a limited time while setting the card limit. Moreover, use only the bank-approved funds.

Why Should One Use a Virtual Card?

Better Security

The best thing about virtual cards is that your actual card details are not shared online. Hence, this reduces the chances of data theft and online fraud.

Controls Spending Habits

Generating a virtual card with a specific spending limit restricts you from unnecessary expenses. It is great for budgeting and managing recurring payments.

Easy Cancellation

You can instantly delete or deactivate your virtual card without blocking your main debit or credit card.

Convenient for subscriptions

OTT and e-commerce app subscriptions are becoming the new norm, and virtual cards are ideal for this, as they help you manage subscriptions by allowing you to set a low limit so that you don’t overspend.

Banks with Virtual Cards

There are several banks and financial institutions that offer virtual cards. Some of the best virtual cards in the Indian market are:

HDFC NetSafe Virtual Credit Card.

This option is perfect for someone seeking a reliable credit card because Netsafe cards are directly linked to your existing HDFC Visa or Mastercard and are designed specifically for single transactions.

Kotak NetCard

It is a one-time-use virtual card you can generate via your Kotak net banking portal. It’s ideal for online purchases.

SBI Virtual Credit Card

The SBI virtual card is best for domestic online transactions. Moreover, you can quickly generate it from your SBI net banking portal. It is a safe and reliable option for transactions within India.

ICICI Pockets Card

ICICI’s pocket card is known for its versatility. You don’t need to be an ICICI customer to get this virtual card! This card supports NFC, UPI, and Bharat QR Code payments, making it a comprehensive solution for several digital payments.

Conclusion

Finally, virtual cards are a boon for consumers who use frequent online transactions and international services.