The virtual payment card is a relatively new trend in finance, which is gaining popularity due to the convenience of use. How does a virtual payment card work, and how does it differ from a traditional plastic card? Here is everything you need to know.
What is a virtual card?
Virtual card is the same means of payment as any other traditional payment card. The only difference is that it has no physical form. The unquestionable advantage is that it cannot be lost. Instead of in your wallet, you will find it on your phone - in a dedicated mobile application. The virtual card is especially useful in online payments, but there are also ways to pay in stationery shops.
Virtual cards are usually supported by VISA or Mastercard. In order to pay with it on the Internet, all you have to do is enter your card details and confirm with the CVV/CVC code. The whole process is identical to that of a plastic card. The only difference is where to find these data. Usually, we have access to them in the mobile app or directly in the institution's Internet banking system that issued the card.
Virtual card for online payments
In the absence of a physical form, the virtual card is primarily used for secure online payments. Despite this distinction from a plastic card, it has its own unique number, expiry date and CVV/CVC security code.
The functionality of a virtual card may resemble that of prepaid cards. You can only pay with a virtual card if you have funds on it. Before making a transaction, you should therefore ensure that you have enough money to cover it.
Why use such a payment method at all? By assigning a virtual card to payments on the Internet, we protect ourselves from losing money due to data leakage. Indeed, a card without a physical form can be created just as quickly as it can be blocked.
Using a virtual card for payments on the Internet is a positive habit. Even if information leaks from the online shop, the data of such a card get into the wrong hands, we can easily block or even delete it, thereby preventing unauthorised payments. In the worst-case scenario, third parties will only have access to the card's money and not all the money in our main bank account.
The sensible solution also involves loading the virtual card before each use. This way, we can have regular insight into the payment history and control our expenses on an ongoing basis, thus optimally managing the household budget.
Virtual card without an account
Virtual cards can be issued by banks or other licensed institutions. Therefore, you can order one without the need to open a bank account. Then it will be used as a virtual prepaid card.
This is a convenient solution, especially if payments in foreign currencies are required. Under normal circumstances, we would have to open several foreign currency accounts, the maintenance of which could be costly.
In the case of a virtual card - provided that it supports such a function, of course - it is possible to pay in many currencies without the need to maintain bank accounts and order dedicated cards for them. This type of option is offered, among others, by Conotoxia. The financial portal enables virtual card payments in many currencies at attractive rates without hidden fees and commitments.
Virtual payment card - how to get one
Issuing a virtual payment card is, moreover, simpler than opening a bank account. All the activities can be conducted exclusively via the Internet. In some cases, the card will be assigned to our profile even after a few dozen seconds after submitting the "application."
Such terms are offered by Conotoxia. If you want to use a virtual payment card, you have to open an account on the portal or log in to the existing ones, and then express your desire to receive the card.
After a short time, the card will be assigned to the user's account. The user can manage the card from their customer panel or via the mobile app. In addition to monitoring the virtual card data, the user can determine the limits, reservations, or even its deletion.
Virtual card advantages and disadvantages
Like any product, a virtual card has its benefits and drawbacks. The unquestionable advantages include, among others, the quickness of its creation and the lack of formalities connected with account operation.
Security is another issue worth mentioning. Using a virtual card, we limit the risk of losing money, as it is not directly linked to our main account. If a virtual card's data fall into the wrong hands, you will lose the funds on it in the worst-case scenario and not all your money. An additional advantage is that such a card cannot be lost.
Virtual cards offer convenience and savings when shopping in foreign online shops as well. Some solutions of this type allow you to store funds and make payments in multiple currencies.
What are the disadvantages of a virtual card? First of all, the card needs to be topped up before payments are made, and it cannot be used for purchases in stationery shops, although some cards may be connected to services that allow for phone payments. Using a virtual card, you can't withdraw money from an ATM or deposit it in a cash machine.
Virtual or physical payment card - which one to choose?
Which card to choose - a physical or virtual one? There is no doubt that a physical card is also universal - you can pay with it both in stationery shops and online. On the other hand, a virtual card offers greater security when paying online, as mentioned earlier.
Both cards are not mutually exclusive, so using a traditional card for everyday payments and a virtual one for online purchases is a smart solution, especially if you often order something from foreign shops.