Virtual Credit Cards Explained: How They Work, Benefits 2024

Online banking is a very good option for every shopping lover. This article introducing Virtual Credit cards. What is Virtual credit cards and How to create this Virtual cards in India to make successful online payments without exposing your original Debit or credit card details?

The issue and usage of credit cards are easy and quite accessible. But the security levels of online transactions through our Debit cards/credit cards are not secure now. Hundreds of cyber frauds are being noted. Your credit card particulars are being stolen. This is all due to the security level lapses on the websites.

There are so many reasons but the strongest reason is how you are exposing your credit card particulars when you complete your transactions. Getting a credit card in India is not an easy process.

So how about using a credit card without exposing the card details? There is an option to minimize the susceptibility to financial frauds. They are called Virtual Credit cards.  This is the safest way for online transactions without exposing your credit card or debit card details.

A virtual credit card is a digital number that is a proxy for your real credit card number when purchasing online. Virtual credit cards are generated through your bank or a third-party service for online transactions. They are designed to add an extra layer of security and protect your real credit card information.

Virtual credit cards offer several benefits over using your actual credit card number online:

• Enhanced security – The virtual card number masks your real credit card number, so even if the virtual card details are compromised, your real card remains secure. It prevents fraudsters from stealing your real card number.
• Disposable numbers – You can generate new virtual cards on demand for each online merchant. This way, your real card number is not tied to any particular retailer. If a virtual card is compromised, you can close it without affecting your card.
• Purchase limits – Virtual cards can have preset spending limits. It gives you better control over potential damage from a breach. You can generate a card with a large enough limit for a particular purchase.
• No risk to real credit – Since virtual cards are not linked to your actual credit line, your real credit is protected if a virtual card gets misused. You’re not liable for any fraudulent charges.

This article gives you a detailed meaning, features, and benefits of how to create Virtual Credit cards for your secure online transactions?

What is a Virtual Credit card?

A virtual Credit card (VCC) is a specialized prepaid card. It is issued from the user’s existing credit card or debit card. It is exclusively made for secured online transactions. As per the name, the card does not have any physical existence or plastic existence. So there is no risk or loss.

• Single-use card
• You can generate anytime if you want to perform an online transaction
• This is very useful for Online payments
• This is valid 24 to 48 hours only
• You can create with a specified amount
• It is completely free. No fee

Basic Concept of Virtual cards

A virtual card is especially suitable for people who are afraid that they will be hacked during their purchase with a normal credit card. In that sense, a virtual credit card is a solution, because once used, the number is no longer valid. So you run a little risk.

If you are using your debit or credit cards for better online payment by exposing card details like Credit card number, Expiry date (expiration date), and CVV number. This is very sensitive information to share every time. Here the Virtual credit cards are helpful to hide your original card details. The VCC is valid for single use and a certain duration.

A virtual prepaid credit card may be of interest to people who are not entitled to a regular credit card. Your income is in fact not tested. Mind you, for some cards, you must be 18 years or older. Simply deposit money on your “map” your bank, then you can make purchases on the Internet. You run no risk of debt.

The validity of Virtual cards

The validity of the Virtual credit card is 24 to 48 hours only in real-time.  If you did not use the card the amount will be returned to your main account within a period of time as specified in the Terms and conditions of the Provider.

How the VCC is Working and How to use it?

Virtual Credit card creation is a simple process. There are some banks and non-bank entities that are providing the facility to create VCC at a specified amount against the primary card. You can use these Virtual credit card to pay online securely like similar to general credit card payments. It helps you to protect from credit card fraud.

Virtual credit cards work by masking your real 16-digit card number with a randomly generated virtual account number. This virtual card number, also called a token or disposable credit card number, is linked behind the scenes to your real account.

When you use a virtual card for an online purchase, the transaction goes through the credit card network like your real card. The network can process the payment by linking the virtual card details to your card number via your issuing bank.

• Select the Product to make a purchase from the merchant site and choose the payment option
• Then log in to your bank or non-bank portals to create VCC
• Go for VCC or Net card or Safe card or eCard option. Enter the amount and choose your stored debit or credit card particulars and click on Generate VCC.
• Finally follow the instructions. Within a few seconds, your Virtual card is ready
• These Virtual credit cards have the Card number, CVV, and expiry date. So your bank account number is safe in online.
• Use the created VCC on the merchant site to buy the product and make payment.

The token virtual card number protects your real number throughout the transaction. Merchants and other third parties only see the virtual card details. Your real card number is never exposed.

Once a virtual card transaction is processed, you receive a billing statement as normal. The virtual card charge shows up alongside your other real card transactions.

How to Get a Virtual Credit Card

Two main ways to get a virtual credit card are through your issuing bank or a third-party virtual card service.

Bank-Issued Virtual Cards

Many major banks now offer virtual card services through websites or mobile apps. For example:

• Citi Virtual Card Numbers – Citi credit card holders can generate virtual card numbers for online purchases. The numbers can be used immediately and expire after a set period.
• Bank of America ShopSafe service – BoA’s ShopSafe generates virtual card numbers while shopping online with added controls like spending limits.
• Capital One Eno – Eno virtual card numbers are accessible through Capital One’s mobile app and extensions. Each card number is unique and disposable.
• Discover Account Number Masking – Discover customers can generate temporary credit card numbers that route back to their real accounts.

To use your bank’s virtual credit card service, log into your account and look for the virtual card management options. The process of generating new numbers is quick and straightforward.

Third-Party Virtual Credit Card Services

You can use a third-party virtual credit card service if your bank doesn’t offer virtual cards. Popular options include:

• Privacy.com – Privacy lets you create unlimited virtual Visa cards tied to your actual payment methods. You can set spending limits and restrictions.
• Token – Token generates virtual card numbers for security online. You get access via the iOS mobile app. Single-use or multi-use cards are available.
• Mastercard SecureCode – Cardholders can get single-use Mastercard numbers for online transactions through Mastercard’s SecureCode system.

These services connect directly with your bank account or to an existing credit/debit card. Fees range from free to around $10 per month for premium services.

Free Virtual Credit Cards providing banks

You need a new account in the bank to use this feature. You will also get Net banking and a debit or credit card. Every bank has its terms and conditions. So you must read those conditions once.

Most of the VCs are enabled for international payments. But SBI Vcard is valid only for domestic transactions only. The card is valid in India only.

1. State Bank of India (SBI Virtual Card)

The SBI Virtual Card feature was launched in April 2012. It accepts VISA/MasterCard debit cards as the payment option.

These cards are valid only in Indian transactions, not for international payment. It is Valid for 48 hours only. You can create the cards with a minimum Rs.100 to Rs.50 000 rupees limitation. It is completely free.

If you have the SBI internet banking facility, you can create an SBI Virtual card with a few clicks to make your payments happily.

2. Kotak Mahindra Bank (Kotak Netc@rd)

Kotak Netc@rd is one of the good virtual debit cards that permits the international payment system. You can create the card by debiting the amount from your savings or current account.

It gives Instant Use Virtual Credit Card. It accepts VISA cards as a payment option. The card is valid for 24 to 48 hours only. The credit limit of VC card balance is Rs.100 to Rs.10 000. It is completely free.

3. HDFC Bank (HDFC NetSafe Card)

The NetSafe Card facility was launched in January 2012. It is another good option for Indian users, and it is the best online Virtual Credit Card for the safest payments.

You can create the HDFC NetSafe card using a Credit or debit card. You may use this card at any website that accepts MasterCard/VISA as a payment option.

The NetSafe card is valid for up to 48 hours only. You can create the card with debit cards, mostly depending on the account balance. Using an Infinite & Regalia credit card, you can create up to Rs.1 50,000 Virtual credit cards.

Rs. 75,000 is a limitation with Credit cards. It is a completely free service. No additional charges.

Recommended: You can check the NetSafe Card FAQs

4. Axis Bank – Freecharge Credit Card

Axis Freecharge Credit Card is a VISA Virtual credit card. You can use this VCC at any online merchant shop that accepts VISA cards as a payment option.

The free credit card creation is possible only with your Axis VISA Credit card. You cannot use MasterCard issued by the bank.

The validity of the card is 48 hours only. You can create a free credit card up to your credit card limitations. The Virtual Visa Card Instant Activation is also free.

Virtual Cards providers from E-Wallets and Non-Banks

A few of the other services are running on the internet for Virtual card services in India.

They allow any debit or credit card users for new registration and generate a Virtual Credit card.

• FreeCharge Go MasterCard
• Pocket Wallet by ICICI
• Lime Wallet by Axis Bank
• Entropay
• Payoneer
• Oxigen wallet

These services are eWallet Apps and non-banking websites. Some of the eWallet services are associated with banking services.

1. FreeCharge Go MasterCard

Freecharge is the most popular Mobile Waller and Online recharge platform. It recently launched the Virtual card “Go MasterCard,” which features an associate with Yes Bank and Master card in January 2016.

How to generate a VC Card in FreeCharge Go Mastercard?

• To generate a Go MasterCard, log in to your Freecharge account first.
• Then click on FreeCharge Go from the left column and click on mPIN.
• Now, enter the mPIN details and all the required details here. Now your “FreeCharge Go Virtual MasterCard” is ready.
• You can use this for internet payments anywhere in India.
• You can add the money to the Freecharge wallet using your Debit or Credit cards.

2. Lime Wallet by Axis Bank

The Lime Wallet app was launched in September 2015. It is for both Axis account holders and Non-Account holders. This app allows you to create a virtual prepaid card for online shopping.

This card only permits the money from their wallet.

Before using this card, you must add the funds from your Axis account or use a Debit or credit card. The bank is planning to issue the physical cards in the coming days.

3. Oxygen Wallet

Oxygen Wallet is a very good way to make safe online payments for anything and anywhere.

This service offers VirtualE Prepaid VISA features. , this is India’s first best non-bank wallet approved by the Reserve Bank of India (RBI).

This virtual card offers an instant money transfer facility. The Virtual CISA prepaid card was launched in January 2012.

It helps you to complete online transactions without exposing your details of credit or debit cards.

You can use the card anywhere or on any website like Flipkart, Amazon, and Uber, which use the wallet and accept VISA as a payment option.

4. Pocket Wallet by ICICI

In February 2015, ICICI launched a special Mobile app, a digital wallet. It can be used for special financial services even if you do not have an account with ICICI Bank.

Here, to get the app for now-ICICI bank account holders, you can download the app from the Google Play Store and the iOS APP store.

For ICICI bank users, you can use the same ICICI net banking login details to complete the registration.

This wallet service provides a Virtual Prepaid VISA Card. It shows on their dashboard. You can use this Virtual card to complete the shopping payment online.

It is valid in India only. You may get the physical card with a special request.

5. Payoneer

Payoneer is a very good PayPal alternative in India. It is an e-commerce payment service provider, an online money transfer service provider that operates globally.

Here, the Virtual card service is not available for all users. The Virtual card system is enabled only for mass payout companies that pay a minimum of $10,000 monthly.

The Benefits of Virtual Credit Cards

Here are some of the top benefits that come with using virtual credit cards for online shopping and payments:

a. Safer Online Shopping

The primary benefit is enhanced security when entering card details on websites and apps. Since the virtual card number is not related to your credit card, the real number stays protected. It provides an extra security barrier in case of a merchant data breach.

b. Avoid Scams

Scammers and shady merchants can’t do anything with virtual card details, even if you accidentally provide them. It prevents fraudulent charges from hitting your real accounts. Virtual numbers are junk data to scammers.

c. Easy to Cancel

If a virtual card gets compromised or you no longer need it, you can deactivate or delete it instantly without affecting your actual accounts. It makes virtual cards very disposable and convenient.

d. Track Payments

Since each virtual card is linked to a specific online merchant, you can easily see which sites are making charges. It helps you monitor online spending habits and identify any suspicious charges.

e. Limit Exposure

Virtual cards allow you to set monthly or per-transaction spending limits. It restricts the damage that could happen if a merchant site gets hacked. You can generate a new number if the limits are reached.

f. No Risks to Credit Score

With virtual cards, you avoid risks from shady retailers possibly mishandling your real card details. Your credit score and accounts remain unaffected even if a virtual card is misused.

Potential Downsides to Virtual Credit Cards

While virtual credit cards come with significant security advantages, there are some potential downsides to consider as well:

• Not accepted everywhere – Some smaller merchants may not accept virtual card numbers during checkout. The numbers may also not work with certain subscription services.
• Extra steps – Generating and managing additional virtual card numbers for each online merchant takes a little extra time and effort.
• Possible fees – If using a third-party service, you may have to pay monthly or per-transaction fees. Bank-issued numbers are generally free.
• For online use only – Virtual cards can normally only be used for online, phone or mail order purchases. The numbers cannot be used to make in-person transactions.
• Security limitations – Virtual cards provide an extra layer of security but cannot protect you from threats like phishing. It would help if you took other precautions as well.

While minor hassles are involved, most users feel the added security merits the small overhead of managing virtual card numbers.

Tips for Managing Virtual Credit Cards

To get the most security and convenience from virtual credit cards, follow these tips:

• Generate a unique card number for each merchant where you shop online. Avoid reusing numbers.
• Set an expiration date for each card when allowed so it automatically shuts off.
• Note which merchant is tied to each card number for easy monitoring.
• Set transaction or monthly spending limits to minimize potential exposure.
• Avoid using virtual card numbers with questionable or risky merchants.
• Delete old virtual card numbers you no longer use.
• Check your statements routinely to watch for any unauthorized virtual card charges.
• Generate fresh virtual cards periodically just to be safe. Many offer unlimited free cards.

Managing your virtual credit cards takes extra diligence but is worth the effort.

The Future of Virtual Credit Cards

Virtual credit cards will keep growing in popularity and become a standard online payment method. The technology may also expand to allow virtual card use in brick-and-mortar stores via digital wallets on smartphones.

Banks, credit card providers and tech companies are working on innovations like:

• Making virtual card generation faster and simpler via mobile apps
• Tighter integration with digital wallets, browsers and merchant sites
• Additional anti-fraud protections through AI and machine learning
• Moving past plastic altogether to virtual-only credit card accounts
• Potential use of virtual card numbers when making in-person purchases

The convenience and security of virtual credit cards make them a key part of the future of online commerce and payments. Their use should increase, especially as more banks provide virtual account services.

Frequently Asked Questions (FAQs)

Final words on Virtual Credit cards

Virtual credit cards provide an important extra layer of security for all your online shopping and transactions. You can keep your real account details safe from compromise by generating unique, temporary card numbers. While it takes a little extra work, virtual credit cards give you peace of mind that potential breaches won’t affect your actual credit. With the risks involved in shopping online today, virtual credit card numbers are worth considering.