The risk of identity theft is increasing and becoming a serious problem. In fact, the number of people who fall victim to fraud and identity theft has nearly tripled in the past decade.
that much FBI Total losses due to cybercrime in 2023 are estimated to reach $10.2 billion, nearly double the previous year ($6.9 billion). The alarming increase in these losses indicates the growing influence of cybercriminals in a digitally dependent world.
Victims face the brunt of this evolving threat. As our reliance on digital technologies grows, so do the scales of the consequences we face.
Now more than ever, virtual card numbers allow you to shop online without giving out your real credit card number to merchants, which is critical to protecting against online fraud.
What is a virtual card number?
A virtual credit card is a special kind of card number that is created for a specific transaction or limited time frame. It serves as a unique temporary replacement for your physical credit or debit card. A virtual card number allows you to shop online securely without revealing your physical card details.
How do virtual card numbers work?
A virtual card number acts as a substitute for your actual credit card number, adding an extra level of security to your transactions.
Regarding processing, these temporary bank account numbers are treated similarly to regular credit cards. However, if your virtual account number is intercepted or stolen, you will only get a set of numbers that will not give you access to your actual credit card or sensitive information. This will prevent fraud and prevent unauthorized use of your card information.
The difference between virtual credit card numbers and mobile wallets and payment apps
Virtual credit card numbers act as temporary replacements for real credit card numbers, adding an extra layer of security and reducing the risk of fraud if the virtual number is compromised.
On the other hand, mobile wallets and payment apps use technologies such as tokenization and biometric authentication to increase security and protect sensitive data stored within apps.
A virtual credit card number is mainly used for online or remote transactions and allows you to control spending limits and subscription duration. Conversely, mobile wallets and payment apps offer a wider range of capabilities enabling online and offline payments, contactless transactions, loyalty program integration and peer-to-peer money transfers.
Benefits of online shopping with a virtual card
Enhanced security and fraud protection
A virtual card protects sensitive information, preventing it from being exposed during online transactions.
The added security of virtual cards is especially useful in situations where data exfiltration or phishing scams are prevalent, as it limits fraudsters’ access to your information and reduces the risk of unauthorized use.
Simplify your subscription
A virtual card can simplify subscriptions by giving you better control over recurring payments.
It’s common to forget an ongoing subscription and get unexpected charges.
With Virtual Cards for Subscription Services, you can easily set spending limits, specify a subscription period, or even cancel your virtual card after a specified amount of time. This will give you more control over your subscription costs.
Shop safely on new or unfamiliar sites
Virtual cards provide an extra layer of security when shopping on unfamiliar or new websites.
Instead of exposing your real credit card details, you can use a virtual card number to reduce the risk of your information being compromised.
Controlled Spending Limit
Virtual cards allow you to set specific spending limits. For example, if you have a specific budget for shopping online, you can create a virtual card with a pre-determined spending limit. This will help you avoid overspending and stay within your allotted budget.
Disadvantages of virtual account numbers
Virtual account numbers only work online.
Virtual account numbers are designed for online transactions and cannot be physically used like traditional credit cards. This limitation comes from the nature of virtual cards. Virtual cards are temporary and are created specifically for online or remote use.
Face-to-face transactions or situations that require a physical card may not be compatible with virtual account numbers.
Returns can be a hassle
The process of returning items purchased with a virtual card number can be more complicated than using a physical credit card.
Merchants may have difficulties processing returns, which can make the return process more difficult and time-consuming. To resolve this issue, we recommend that you retain documentation and proof of purchase, communicate with the merchant regarding returns, and work closely with your virtual card provider to resolve any issues that may arise.
problems with verification
Some transactions, particularly those made online or over the phone, may still require the physical presence of a credit card for verification purposes.
Because virtual cards do not physically exist, you may experience difficulties when trying to complete these transactions. In these cases, you may need to select a different payment method or contact the seller directly to explore other options.
They are not yet universally available
Despite their advantages, virtual account numbers are not yet widely available from all banks and credit card issuers. The limited availability of virtual cards can be a barrier for individuals trying to take advantage of this added layer of security.
How do I set up a virtual credit card?
Choosing the Right Virtual Credit Card Number Provider
When choosing a virtual credit card number provider, you should consider the provider’s reputation, security measures, ease of use, available features, and compatibility with your existing accounts. Research and compare multiple providers before making an informed decision.
Other Options for Safe Online Shopping
If your credit card issuer does not offer a virtual credit card option, there are alternative security measures you can consider. Some credit card companies have background programs designed to verify your identity for added security.
Plus, using a credit card instead of a debit card gives you an extra layer of protection from fraudulent transactions.
Personal and financial information should also be monitored. IdentityIQ credit and identity monitoring services include internet and dark web monitoring. These services can help keep you and your credit card information safe.
conclusion
A virtual credit card number provides enhanced security for online shopping, protecting sensitive information and simplifying subscriptions. Shop safer on unfamiliar sites and offer controlled spending limits.
Although there are limitations such as online usability and potential returns issues, the benefits of virtual cards for online safety are significant.
Frequently Asked Questions
Are virtual cards more secure than physical cards?
Virtual cards offer an extra layer of security compared to physical cards due to their temporary and unique nature. This feature increases overall protection by reducing the risk of exposing your real credit card information.
Why are virtual cards so much safer for online shopping?
With a virtual card, you enjoy a temporary payment method that minimizes the exposure of your actual credit card information. This means you can be assured of peace of mind when purchasing online, as you are protected from potential data breaches or unauthorized access to your sensitive details.
Virtual cards also include additional security measures such as transaction limits, giving you more control over your online spending habits.
Can I get my money refunded to my virtual credit card?
Yes, in most cases you can get a refund on your virtual credit card. When a refund is issued for a purchase made using a virtual credit card, the funds are usually credited back to the virtual card account.
Here, you can choose to use the refund amount for future purchases or transfer it to your linked bank account, depending on your virtual card provider’s policies. It is important to review the terms and conditions of the specific virtual credit card service you are using to understand the refund process and any associated fees or limitations.