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Can virtual cards create magics for online shopping and what should merchants do?

Tuesday, 30 Aug, 2022

Virtual cards are on the rise by their incredible advantages for eCommerce payments and subscription services. Although more and more customers open virtual credit cards nowadays, there are some people who still know little about their great benefits. In this article, we are going to help you answer these questions about what is a virtual card and how does it work with more insightful knowledge. Let’s find more!

Can virtual cards create magics for online shopping and what should merchants do?

Can virtual cards create magics for online shopping and what should merchants do?

1. What is a Virtual Card and how does it work?

1.1. Virtual payment cards definition

A virtual card serves the same purposes as a physical card but is not touchable. Virtual cards are jumping on the bandwagon in digital payments. More and more businesses accept virtual payment cards, including virtual credit cards and virtual debit cards, in subscription services, eCommerce, and other online companies. Let's explore each of these things in more detail, along with how they differ from one other and how they can possibly help your business.

What is a Virtual Card and how does it work?

What is a Virtual Card and how does it work?

Virtual credit card

A virtual credit card is issued by banks or financial institutions with 16-digit strings of numbers that are similar to the physical card numbers and CVV plus the expired date. You can imagine how the plastic card operates precisely like a virtual credit card. You as a virtual card holder are also granted a limit for spending and any fees&charges schedule might be roughly similar to the physical counterpart.

Thẻ ghi nợ ảo cũng là một sản phẩm trực tuyến không có dạng vật lý. Nó hoạt động giống như một thẻ ghi nợ thông thường với các số gồm 16 chữ số và CVV cộng với ngày hết hạn. Thẻ ghi nợ ảo khác với thẻ tín dụng ảo bởi nguồn tiền của chúng. Thẻ tín dụng ảo rút tiền từ hạn mức tín dụng để mua hàng trong khi thẻ ghi nợ ảo giải ngân trực tiếp từ tài khoản ngân hàng (tài khoản vãng lai hoặc tài khoản séc).

Virtual debit card

A Virtual debit card is also an online product without a physical form. It works like a normal debit card with 16-digit numbers and CVV plus the expired date. Virtual debit cards differ from virtual credit cards by their source of funds. The virtual credit card withdraws funds from the credit limit to grant a purchase while the virtual debit card disburses directly from a bank account (current account or checking account).

How many virtual card brands are there?

There are numerous virtual card issuers in the market especially in Europe and North America. The majority are banks and digital banks (neo banks) or fintech firms. However, these financial companies need to connect with the card brand firms to co-issue the virtual payment cards for consumers with co-branding products. Here are key players in the global card network:

  • Virtual Mastercard
  • Virtual Visa card
  • American Express virtual card
  • Discover virtual card
  • JCB virtual card

To order a virtual card, consumers can request their banking providers (issuing banks) by submitting a virtual card application form and providing supporting documents for the onboarding process. In general practice, you might contact your relationship manager for support or pay a visit to the branch, but nowadays, with the booming virtual payment industry, clients are able to apply for virtual cards right on their smartphone or any mobile device by tapping into their banking app.

To order a virtual card, consumers are able to apply for virtual cards right on their smartphone

To order a virtual card, consumers are able to apply for virtual cards right on their smartphone

Virtual card examples

To protect your data, offer you more control over who charges you, and choose how much money actually leaves your account, a virtual credit card generator creates a virtual card on demand digitally. Below are some examples of virtual card products for your reference:

AMERICAN EXPRESS GOTM AMERICAN EXPRESS GOTM

American Express Go is an expense management option that enhances your convenience and works in conjunction with your Corporate Card program. Amex virtual card is a quicker, more convenient solution for your freelancers, recruits, and occasional travelers to make payments while on the go.

Citi® Virtual Card Accounts Citi® Virtual Card Accounts

With Citi® Virtual Card Accounts, buying organizations may handle a range of demands thanks to their flexibility, strong control, and expanded data possibilities. It can be used in conjunction with a current commercial card program to enhance growth or as a stand-alone solution to simplify purchases. VCA is a great option for Card-Not-Present transactions processed online, over the phone, or through the mail because of its secured features. It also serves as the foundation for Citi ePayables, a file-based solution for post-invoice payments handled by Accounts Payable.

Capital One Eno Capital One Eno

When you shop online, use Eno to pay with virtual cards that help shield your credit card account from potential fraud. When you shop online, virtual card numbers from Eno help safeguard you from potential fraud by disguising your actual card number. The Eno browser plugin will appear when you're on a payment screen and create virtual credit card numbers you can use to make payments more quickly and securely. By selecting the Eno icon in the top right corner of your browser window, you can also access Eno at any time.

Apple Card Apple Card

With the introduction of Apple Card, we radically reimagined the credit card. User information is available on the iPhone, and it is clearly presented. Privacy and security are increased thanks to cutting-edge technology like Face ID, Touch ID, and Apple Pay. Users also receive Daily Cashback on every purchase.

Revolut virtual card Revolut virtual card

It's really simple to use the Revolut virtual card. That's because it functions precisely like your standard Revolut card. As soon as you have one, you'll be able to see information on both your physical card and your virtual card in the app. Enter the 16-digit card number as usual, together with the expiration and CVV numbers, while making an online purchase, or You can use the card details to make payments online or over the phone. You can even add the virtual card to Apple Pay or Google Pay, to make contactless payments using your phone.

Monese virtual card Monese virtual card

One virtual card can be created for each currency account by each Monese customer. Currently, you must have your physical card in order to set up a virtual card; however, updates will be provided as they become available.

DNBC Financial
            virtual
            card DNBC Financial virtual card

DNBC Digital MasterCards are virtual cards that enable you to pay online any time, anywhere with card numbers and CVV codes just like physical ones. Protect your money from any risks of being lost and stolen while enhancing security. In case you forget your card number and CVV code, DNBC 24/7 support team will always be ready to help.

1.2. How does a virtual card work?

You can shop online, initiate the checkout process, and use a virtual credit card number to make your transaction in the same way that you would do with your physical credit card.

With every online retailer that takes credit card payments, virtual card numbers normally function. Therefore, if you can buy goods online using your actual credit card, you may undoubtedly do the same using a virtual card number.

Virtual card payment process:

  1. Customer requests and receives a virtual card number from an issuer.
  2. The virtual card number is used in a transaction.
  3. The merchant submits the transaction to the merchant’s bank.
  4. The merchant’s bank submits the transaction to the authorization and clearing network.
  5. The transaction is authenticated and authorization controls are verified.
  6. The virtual card transaction is approved and submitted to the clearing network for authorization processing.
  7. The clearing network sends the transaction to issuing bank for processing and posting to the billing account.
  8. The issuing bank offers thorough reporting with improved data elements for simple comparison.

How does a virtual card work?

How does a virtual card work?

1.3. Usages of virtual cards for online payment

Consumers use virtual cards for online payment to purchase any item that can buy online. The virtual payment can be used to pay for one-time or subscription services (recurring payment).

Some savvy shoppers prefer to checkout with virtual credit cards on Amazon or eBay. For those who are Apple fans, pay Apple subscription services like iTunes, iMovie will get more cashback with Apple Card payments.

Almost IT specialists and Gamers would utilize virtual cards to buy digital services, software or gaming features. These people are very busy and they have no time to go to a bank for physical card registration. They might open a virtual card online instead to save time and money.

Another community is high-tech lovers. This group enthusiastically enjoys their daily spending with technology and they crave a digital wallet (Apple Pay or Google Pay) which is linked to a virtual card to pay by phone. The payment method reflects their lifestyle and makes them feel unique.

Many eCommerce platforms that offer mobile apps are the ideal place to use virtual cards. Consumers can choose to checkout in mobile apps with virtual card online details and wait for delivery. The typical examples in this case are movie tickets, concert show tickets or sports game tickets and other marketplace platforms.

For business-to-business payments, firms usually implement virtual payments for vendors and business partners.

Usages of virtual cards for online payment

Usages of virtual cards for online payment

2. Benefits of virtual cards

Virtual cards (virtual credit cards and virtual debit cards) bring a variety of advantages for individual users and companies. Let’s take a look at each targeted group to see how it encourages a better payment experience.

2.1. Business clients

Businesses can extend spending authority to contractors and other employees while also improving fraud protection, controlling vendor payments, and aligning on spending and goals. Here are some wonderful benefits of virtual cards for companies:

Enhance fraud protection

Companies can authorize multiple virtual card numbers for their employees for business expenses. Some virtual card issuers can set one or some specific merchants that are accepted to pay. Therefore, cardholders have no chance to pay at other unapproved stores. The fewer places are accepted to pay, the less risk of leaking confidential card information.

Minimizing misused spending

Business owners can prevent overspending before it happens by limiting virtual card number use to one vendor and locking a card when needed. Businesses can precisely manage where payments are made thanks to virtual card numbers, thus lowering the risk of employee or contractor fraud.

Managing recurring and new vendor relationships

Virtual card online payment helps businesses prevent disruption in production and maintain relationships with vendors. Your businesses would run smoothly, your teams would have no delay in operation and be able to reach any target.

Control business expenditures by pre-set limit virtual credit cards

Some virtual card issuers offer company clients the ability to default budget for every card number. By allocating virtual card numbers to particular employees, budgets, merchants, and other entities, businesses can segment their cash flow.

2.2. Individual customers

More Security

With no physical form, the cardholder is able to avoid the risks of losing the card and leaking payment information. It is simply impossible for account theft on e-commerce fraud because criminals cannot have access to your bank simply by obtaining your physical card.

Convenience for E-commerce

You can easily order virtual cards online with a 24/7 banking service, and therefore, You can quickly complete the transactions online to increase the efficiency of your shopping experience with just a few taps on a phone, a laptop, or an iPad.

Save cost

In general, the cost to issue a virtual card is cheaper than a physical one. To provide an actual card for a user, the issuing banks require huge operation costs from making plastic cards to delivery services and renewing cards in any circumstances. Since everything is done online, the virtual creditor may reduce operating expenses and, as a result, lower customer fees.

Manage Card Easily

Managing virtual cards is much more simple than other credit cards. You can control the activated status, switch on and off the eCommerce function or even block temporary the cards just on your phone. With the introduction of virtual cards, we are not bothered with queuing at branches and banking anytime anywhere.

3. Are there drawbacks?

Virtual cards can help protect cardholders from credit card fraud, but they do come with some limitations.

  • A virtual debit card or virtual credit card has no ability to withdraw cash at ATM, as a result, in many cases that require cash, you will surrender by these options.
  • Virtual cards cannot be used for long time subscriptions since they will expire and your transaction will be rejected because they are only valid for a certain amount of time.
  • No internet means no transaction when it comes to virtual cards. You cannot make any payment online on e-commerce sites as well as near-field communication technology accompanied with an e-wallet and phone.

4. Virtual card vs Physical card

In general, you can use a virtual payment card to carry out all the same transactions as a conventional plastic card does - just more effectively. Due to the fact that everything is done online, adding money, performing transactions, and paying suppliers and/or buyers only taking a few clicks to complete.

4.1. Similarities

  • Both are credit/debit cards
  • Both use the same card network (Visa, Mastercard, Amex, Discover, JCB)
  • Both are usable for online transactions (e.g. Spending money at Amazon, or using it as a payment method in an app, like UberEATS or Deliveroo.)
  • Both can initiate international transactions in multicurrency (USD, GBP, EUR, etc.)
  • Both can be integrated into e-wallet accounts to make payments (Apple Pay, Google Pay or PayPal).

4.2. Differences

Virtual card Physical card
Fixed bank number since account-opening
Multi-channel: mobile apps, phone, or website
Pay at physical payment terminals
PIN feature
Users can select spending limits
Anti-fraud function
Renew card online or in-app
ATM cash withdraw feature
Possibility of theft

5. The payment gateway for virtual card acceptance

When running an online business, you definitely need a payment gateway to get paid by your online consumers. Sometimes, shoppers might use virtual cards (virtual credit card or virtual debit card) to check out their cart. It is essential to integrate an online payment gateway that accepts all type of card payments and let you automate your business with security and convenience.

PayCEC is a global payment service provider that provides virtual account payment gateway to help your businesses acquire multi-payment methods from virtual card online payments to e-wallets or digital bank transfers. You can learn more about powerful features that PayCEC supports merchants in online payment and fee schedules to match your business plan.

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  • - Company website
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The payment gateway for virtual card acceptance

The payment gateway for virtual card acceptance

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About PayCEC

PayCEC’s secure payment gateway was established in response to the growing need of global online businesses to accept online payments more quickly and easily. In the digital era, our payment flow has evolved to work seamlessly and effectively across all platforms and devices. We pride ourselves on combining superior technology with first-class customer service.

PayCEC’s secure payment gateway for online businesses is a truly global payments platform that not only allows customers to get paid instantly and securely, but also withdraws funds to their business accounts in various currencies.

We have created an open and secure payments ecosystem that entrepreneurs and businesses choose to securely transact with each other online and on any device. We proudly maintain the highest level of client advocacy in the industry.

PayCEC Team

Frequently Asked Questions

There are various banking apps across the world that can support virtual cards for customers. Here are some recommendations for you:

  • Best Virtual Credit Card/Debit Cards in the USA

1. US Unlocked

US Unlocked

2. Wise

Wise

3. Blur

Blur

4. Privacy

Privacy

5. Open.money

Open.money

6. Airtm

Airtm

7. Advcash

Advcash

8. American Express Go

American Express Go

9. Chime

Chime

10. Divvy

Divvy

11. JP Morgan Chase

JP Morgan Chase

  • Best Virtual Credit Card/Debit Cards in the UK

1. Revolut

Revolut

2. Monese

Monese

3. Monzo Plus

Monzo Plus

4. Starling Bank

Starling Bank

5. Skrill

Skrill

6. iCard

iCard

7. DNBC Financial

DNBC Financial

There are many virtual debit card and virtual credit card provider apps in the market that support customers’ demands when it comes to digital payment and eCommerce. Most of them are fintech companies that offer payment services and other e-wallet services.

Also, many banks support virtual card products too. Customers can contact their relationship manager to request the product or apply it right in their banking app.

  • Best Virtual Credit Card/Debit Cards in the USA

1. US Unlocked

US Unlocked

2. Wise

Wise

3. Blur

Blur

4. Privacy

Privacy

5. Open.money

Open.money

6. Airtm

Airtm

7. Advcash

Advcash

8. American Express Go

American Express Go

9. Chime

Chime

10. Divvy

Divvy

11. JP Morgan Chase

JP Morgan Chase

  • Best Virtual Credit Card/Debit Cards in the UK

1. Revolut

Revolut

2. Monese

Monese

3. Monzo Plus

Monzo Plus

4. Starling Bank

Starling Bank

5. Skrill

Skrill

6. iCard

iCard

7. DNBC Financial

DNBC Financial

If your virtual card is a virtual debit card or prepaid card, since this card account is linked to a current account or checking account, you can transfer money easily from a virtual card account to any other bank account that you would like to do. Another way to transfer money from a virtual debit card is via e-wallets. You can link your virtual card to PayPal or any e-wallet you prefer and then transfer it to your bank account or other e-wallet accounts.

In case your virtual card is a virtual credit card, you cannot transfer money because funds are stored in a credit account and they are just available for purchasing items and products, without a banking transfer feature. However, you may try by linking your virtual credit card into PayPal account and transferring it to another PayPal account or to your bank account.

To order a virtual Visa card, first and foremost, you need to apply for a bank account to have a customer number. It depends on fintech companies or card issuers whether you are required to open a physical card in advance to be qualified for a virtual card or not. Some banks don’t ask you to have both however a few banks need you to align with their product policies.

It is important to check with the virtual card providers if they support Visa cards or other types like Mastercard and Amex while they are not what you are looking for.

Your virtual card may be created in a few easy steps:

  • Apply for a banking account (current account or checking account)
  • Download the digital banking app to your phone
  • Provide supporting documents during the onboarding process
  • Create your card account
  • Visit Card menu to order a virtual card
  • Accept the 16-digit virtual credit card number and CVV plus the expiry date that's generated for you.
  • Add funds by topping up money from your banking account to your card account or use
  • Start to make an online payment with ease

Virtual Visa debit card is a product of Visa card company that cardholders can register online or in App and the card number will be delivered instantly to the customer's registered email address plus the CVV and expiry date. Because Virtual Visa debit cards share almost similar functions to other Visa debit cards, so they are accepted at any merchant and store that supports Visa card payment both online and via phone.

Mastercard is a card network, the company only support a communication system to transmit payment information of Mastercard credit card or debit card in virtual form or physical presence. To order a Mastercard virtual card, you first need to find the banks or issuers that offer Mastercard brand for virtual card products. There are a lot of online providers and you can search their website on search engines to opt.

  1. Opt your best suit Mastercard virtual card provider
  2. Click apply for a Virtual card
  3. Fill in the required information
  4. Provide supporting documents
  5. Get approval card number and CVV plus expiry date via email
  6. Manage your card information in digital bank app or internet banking account

Virtual cards are created for digital banking and payments. Unlike plastic cards, Virtual cards do not require physical representation because they are entirely virtual and hosted online.

There is some advantage of virtual cards:

  • Convenience: Instead of carrying physical cards, consumers may access them on their cell phones.
  • Security: They have the defenses required to seal the digital wallet. We can "switch them off" and manage them easily based on customer needs and securely using digital banking applications. Virtual cards also cannot be lost.
  • Cost saving: Consumers save on issuance and maintenance costs, while the issuer saves money on materials, manufacturing, and postage (which contributes to a more environmentally friendly world).
  • Easy approve payment: Users can pay consumption fees quickly at stores or even make quick transfers without any geographical distance.

This number is used when you make payment. The virtual account number is safer and more secure than an ordinary credit card since it can only be used once. Your card account number will not be shared with the merchant and won’t appear on the receipt. The virtual account number ensures that your credit card account is safe. Besides that, you can use a program to set the maximum amount you can spend at a particular time.

Similar to how you would transfer money from a conventional card, you may send virtual card payments to your bank. Like a plastic card, the Visa card contains a card number, expiration date, and security code. By connecting to your online account, you should be able to make transfers to bank accounts. Another way to transfer money from a virtual card to a bank account is to link your virtual card to PayPal account. PayPal has an option to transfer money to a bank account and you are good to go!

Safety is a key concern, particularly for a corporation, because numerous individuals may need to use the same account for a range of transactions.

Virtual cards effectively offer you the upper hand over fraudsters. It will not only hide your real account number but also cease to exist after one transaction, making it useless to hackers. Therefore, it is secure for your account.

Notes: Physical cards are also susceptible since they can be stolen, lost, or hacked by card readers but virtual cards are not

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We are honored to serve as your reliable business partner and financial service provider in the industry and other business-related services. With the help of our professional staff, to help merchants to achieve their goals for the development and expansion of the international business market.

Our payment flow has developed in the e-commerce world to perform seamlessly and effectively across all platforms and devices. We take pleasure in combining technology with customer service, to solve your concerns at the moment.

PayCEC is a fully worldwide payment network that not only allows merchants to be paid immediately and securely, but also allows them to withdraw money in multiple currencies to their company accounts.

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