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Be safe with virtual cards

Author: Adhil Shetty/Thursday, May 3, 2018/Categories: Credit Cards, Expert View

Be safe with virtual cards

The increased need for online payment options in the recent years has seen several e-commerce applications, aka apps, launch to facilitate online shopping and money transferring.

Most of these apps ask you to store your debit and credit card details with them for smooth transactions. You must often wonder if this is safe. While e-commerce businesses may have the requisite data security to keep customer information and privacy safe, you don’t want to leave sensitive information around, for sure. In such a scenario, virtual credit cards can help you.

What are virtual credit cards?

A virtual credit card number is a randomly generated number associated with your credit card that can be used for a one-time transaction within a limited time period. Your actual credit/debit card number is not shared with the merchant. Thus, it limits your chances of being exposed to fraudulent activities.

You can create a virtual credit card by logging into the net banking facility of a bank that offers the facility. As the name suggests, the card doesn’t have any physical existence. A unique number is generated for each transaction. Since it doesn’t involve a manufacturing cost, the ‘card’ can be used for free.

Key features of virtual card

The minimum transaction limit on a virtual credit card is usually set at Rs 100. You need to mention the amount that you would like to transact through the card at the time of generating it.

The validity period varies from bank to bank. Typically, it spans over 24 hours to 48 hours. If the amount is not utilised within the validity period, it is reversed to the physical card.

These cards are highly secure as they remain active only for a limited period and can be used only once. Details of the underlying card are not revealed. Banks usually generate a one-time password (OTP) against the registered mobile phone number to create a virtual credit card.

If you wish to use the card for an international transaction, check with the bank if there are any restrictions.

The transaction charges reflect on the primary statement of the underlying card.

Who can use virtual card?

If you have a credit or debit card, you can generate a virtual credit card in a matter of few minutes. However, the card is only suitable for making online transactions and not for use at offline stores for point of sale transactions. Neither can it be used to withdraw money from an ATM machine.

Don’t ignore the limitations

Transactions through a virtual credit card is capped at Rs 50,000. Since, it is meant for one-time use, the card needs to be generated again and again for multiple online transactions. You cannot use virtual cards for recurring/instalment payments.

The writer is CEO, BankBazaar

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Adhil Shetty
Adhil Shetty

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