It is believed that a virtual bank card differs from a regular bank card only in the absence of physical media. However, these means of payment have a number of important differences.
If you are thinking about purchasing a virtual bank card, this article will teach you about its advantages and disadvantages. If you also want to improve your experience in money exchange – Rates is the best service for tracking the exchange rates of currencies (dollars, euros, etc.) in Ukrainian financial institutions and learning about modern payment solutions.
Why Do You Need a Virtual Bank Card?
Digital Visa or Mastercard cards actually have the same capabilities as plastic cards. In contrast, virtual ones are created primarily for safe online shopping; they have a limited validity period, a rather modest transaction limit, and do not provide some familiar options. Some cards cannot be added to payment applications (Apple Pay, Google Pay, or Samsung Pay) and paid with them from a mobile phone. Many virtual accounts do not allow cash withdrawals or transfers. In terms of functionality, such financial products are closer to electronic money than to debit or credit cards.
Comparing the capabilities of digital and physical financial products, it is not obvious why you should order such a limited product as a virtual card. In addition, digital payment products provide the same opportunities as the usual plastic ones and all the convenience of a digital tool. But the virtual card has its own tasks. The main one is safety.
A plastic card can be stolen, and details can also be copied from it using a special device in a payment terminal. In addition, users simply lose physical cards and forget them at ATMs and stores. If payment method data falls into the hands of fraudsters, there is a high probability of losing all your savings. Credit cards are even more dangerous in this regard: you can not only lose your funds but also remain in debt to the bank.
Another argument in favour of a virtual payment instrument is the ease of receipt. You can order such a card completely online without visiting a branch. An existing bank client simply needs to fill out a short form in the online banking application or personal account. Persons who have never been served by the chosen bank cannot order a full-fledged personalized card, but many credit institutions provide hybrid products for them, similar in functionality to electronic money. Typically, such virtual instruments have a very small transaction limit, but they have all the details necessary for online shopping: number, expiration date, and verification code. Many banking institutions offer virtual cards, including Bank of America.
How Does a Virtual Card Work?
A virtual card can be issued as a stand-alone product or as an additional token to the main account. In the first case, it functions as an electronic wallet: only for online payments and within the payment limit set by the bank. You can order, reissue, and block a card from your phone or online banking.
When a virtual card is issued as an additional one, it gives access to an online account within the limit set by the client. If the details fall into the hands of fraudsters, they will not have access to all the funds of the account owner. The additional card has its own details; when making payments in this way, the data of the main card remains hidden not only from potential attackers but also from stores or payment systems.
How to Use a Virtual Bank Card?
The full functionality of a virtual card depends on the policy of the issuing bank: some credit institutions allow the use of virtual instruments only as an electronic wallet, while others have functionality closer to the digital version of a regular card.
It’s better to find out on the bank’s website or app about all the capabilities of the card you already have or are planning to get.
The range of capabilities of virtual products does not match between different issuers, but the procedure for using such tools is approximately the same:
- For online shopping. The user just needs to enter the data that the system requests on the payment page – usually this is the card number, expiration date, CVV, or CVC code. Sometimes the owner’s name is required, but this line is more formal.
- The procedure for replenishing the card depends on what the card is linked to. If the virtual carrier has its own bank account, you can top up the balance using the same methods that you deposit money into the bank. Most issuers allow you to deposit money by transfer from another account and in cash (at a branch or through a terminal). You can transfer funds either by account number or by 16-digit card number. Virtual cards linked to electronic wallets also allow you to transfer money from your balance.
- Offline payment is possible if your bank allows such use; it is possible from a smartphone with a built-in NFC module.
- You can withdraw cash if there is an NFC module not only in your phone but also in the ATM – not all payment terminals are equipped with this technology.
Security of a Virtual Bank Card
The main difference from standard bank cards is the lack of physical media. After registration, the user receives only the details: number, validity period, and verification codes. This information is sufficient for online transactions.
Another feature of virtual cards is their limited validity period. Such a card can be generally disposable. On average, they are issued for a year, but banks can vary these conditions or leave them at the discretion of the client.
Conclusion
The use of bank cards is the norm of everyday life. If you are focused on security when making online payments, a virtual bank card is an excellent solution. You can also use Rates.fm to learn about many other useful financial solutions, as well as track currency exchange rates at Ukrainian banking institutions. The service is available 24 hours a day, no matter where you are – in Toronto, New York or Hong Kong.
