Basic Guide on Virtual Credit Card

Basic Guide on Virtual Credit Card
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A virtual card is an online credit card in the form of a series of numbers that you can use to make purchases online. It is not a plastic card like a traditional credit card. If you are wondering what is a virtual card? it is a 16 digits number that you can enter into the checkout form to make a purchase online. It comes with a CVV code just like a physical credit card. The virtual card is designed to prevent third parties from accessing your account number. It can replace the use of checks when coming to making B2B payments.

What is a Virtual Card?

When you order a virtual card, the issuer will send you a software program that you are to install on your computer. With the software, you can generate a temporary credit card number and link it to your permanent credit card. The one-time numerical code is also called a token. Since it is not reusable, the data will not be stored which allows you to avoid a merchant if you don't want to continue to let him charge your card. The issuer may provide a browser extension instead of software for generating the virtual card number. You can order a virtual card from a business card issuer or bank. Capital One and Citi are the two banks that offer virtual credit cards.

How Virtual Card Work?

The merchant will communicate with the bank to verify that the number is valid for use in purchases. However, the merchant will not know your bank details. Your account will remain invisible to the merchant if the retailer is not trustworthy. When using your virtual card to make a payment, you must open the VCC website and sign up with your credentials.

When you are done signing up, it will give you a one time token that has a virtual card number and security code. It may also generate an expiration date for you as this information is often required when you are completing a checkout. The payment details will be released on your bank statement if your VCC is linked to the performant card. Virtual card software can be used to generate as many virtual numbers as you need within a few minutes. The number usually expires within a few days or weeks so you need to use it fast. 

Can You Use Virtual Card for Your Business?

If you own a small business and you frequently have to make purchases from suppliers, you can use a virtual card to make payment instead of using checks. You can use the software to generate several virtual card numbers and assign your employees to make payments to suppliers online or on the phone. Virtual card for businesses can help you to avoid the fees for draft checks. You can set restrictions on what kinds of purchases can be made with the virtual card numbers. It allows you to save on the cost of requisition forms, invoice processing, and check fees.

Is There an Expiry Date for a Virtual Card?

Virtual card can only be used for a specific period which is determined by the issuer. You have control over all aspects of the card. You can set a minimum and maximum limit for each transaction. Each card can only be used to make one type of transaction. For example, if you use the card to order a streaming subscription, the card can only be charged for that purpose. 

Any balance on the virtual credit card can be credited back to your account. The issuer can only issue the virtual credit card to the primary cardholder. It is difficult to duplicate a virtual credit card since it is not a plastic card. A virtual card is not suitable to be used for transactions that require you to show the original card number.

Where Can You Use a Virtual Card?

The virtual card is not a plastic card that you can use to swipe on the credit card checkout point at the cashier. For this reason, you can only use a virtual card to shop online or via telephone. You can use a virtual card number and make charges for your purchases at a brick and mortar store. You can use a virtual card number to make purchases at stores that accept major credit cards. The card will become invalid after one-time use. The balance can be credited back to your account after one-time use. It is up to you to set an expiration date for the card to allow it to be used for making several purchases from a particular supplier.

Can You Add Funds to Your Virtual Card?

You can allocate a specific amount of money to your virtual card or you can let it directly charge your permanent credit cards. If you allocate the funds, the funds can be transferred electronically to the specified number. You can reload more funds on the virtual card when the funds run low in the balance. There is no need to go to the ATM to withdraw the cash to reload your virtual card.

Are There Any Disadvantages to Using a Virtual Card?

The disadvantage of a virtual card is that you can have problems receiving a refund in case you want to return an item. The merchant will only refund the credit card that you use to make the purchase. Since a virtual card is for one-time use, you would not be able to provide the same number to the merchant. It could also be a problem if the merchant wants to verify your account information before allowing you to make the purchase.

Is Virtual Card Safe to Use?

A virtual card is safe to use because there is no way a hacker can trackback to your account. The vendor will not be able to charge you more than the authorized amount when you use a virtual card. If you intend to generate several strings of virtual card numbers, make sure you use them within the expiration date. If you don't use them promptly, someone may steal the number and use them.

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