Your online shopping just got easier and safer with the virtual credit card. But, what's a virtual card? A virtual card is just like your credit/debit card; only it isn't tangible. It was introduced to check the rising instance of fraudulent transactions over the Internet.
How does it work?
Many banks offer this facility but the process works differently with different banks. However, here’s a general outline:
Let's assume you have a bank account with ABC Bank. Now, follow these steps to get your very own card.
Step 1: Log on to your online account
Step 2: Register for the use of this virtual card
Step 3: Fill in the amount you will need for shopping
Step 4: The bank will generate an exclusive 16 digit number, a CVV2 number and expiry date for this virtual card
There you go, you are ready for shopping online. However, the card will be valid only for a particular period of time; usually, it’s valid for 24 hours. So, you need to use it within that time frame. It can be used at any merchant website, which accepts the service provider (VISA, Master card) mentioned in the card.
Features of a virtual card
1. It is a safe and risk-free option
2. It has temporary PIN numbers, which assures safety
3. It is time bound; one needs to use it within the time limit specified before the virtual card expires
4. You need to set a limit to your spending and will be eligible to avail the amount specified on the card, which is dependent on the credit limit of your credit card or cash reserves on your debit card.
5. You can use both your credit card and debit card to generate your virtual card!
6. The balance amount, if any, will be credited back to the main account.
There are a few disadvantages: There could be delay in shipping merchandise, as the merchants might wait to receive the money before dispatch of goods.
Also, you need to complete a transaction within 24 hours. So, forget about paying at your leisure. Once a transaction has been completed successfully, the card cannot be used a second time. There is also a spending limit of Rs 50,000 with most banks that you need to keep in mind.
Cost
Most banks provide the use of a virtual card for free. You only need to be registered with online banking, and you can generate several virtual cards in a day.
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About The Author: Abitha Deepak is Head of Content & Research at BankBazaar.com - An online marketplace where you can instantly get loan rate quotes, compare and apply online for all your personal loan, home loan and credit card needs from India's leading banks and NBFCs.
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