Everything you need to know about Virtual Credit Cards

Given how prevalent data breaches have become in the news, it’s worth thinking about how you might be able to decrease your risk of theft. Virtual credit cards are here, and they represent an effective measure to put an end to credit card fraud.

In this article, you will find everything you need to know about virtual credit cards and how you can use them to the best of their ability.

What is a virtual credit card?

A virtual credit card is an online virtual payment card that performs the same functions as a traditional credit card. It’s only a safer and simple use alternative that can make your electronic payments quick and easy.

As the name implies, this card exists entirely online and is linked to your real credit card throughout a 16-digit number created at random. It is possible to set a spending limit or an expiration date for a virtual credit card as well or even limit it to a single-use merchant. Therefore, you can be sure that your main credit card account is secure, and fraudulent purchases are prevented.

Benefits of a virtual credit card

Virtual payment cards come with numerous advantages similar to traditional credit cards. The virtual credit card payment solutions make it simple for users to manage their money, optimize expenditure, and protect business assets.

Fraud protection

Virtual cards secure your personally identifiable information (PII) by limiting the amount revealed when you make a transaction.

This technique is highly safe since the maximum spending capacity is set and the number allocated for transactions is only valid once. Because these virtual cards expire after a short amount of time, hackers aren’t interested in them.

Limit spending

Although you may not notice it, these virtual cards give you control levels that normal credit cards do not offer. You may freeze your card whenever you need to, as well as set a spending limit, a date for the card to close, or have it close immediately after the first online virtual payment. This way you can control your budgets and limit how much your employees can spend. Expense management can therefore become even more optimized.

Subscription management

Virtual payment cards are a convenient way to keep track of all of your online subscriptions. Simply create a new virtual card for each of your subscriptions, limiting each vendor or transaction to a single virtual card. You’ll be able to keep track of all your subscriptions in one place, be protected if your credit card information is stolen, and check if you’re being overcharged.

Security is improved

Virtual cards are very secure because they cannot be stolen and therefore misused by a stranger. It is also possible to use single use cards, which can only be used once – as their name suggests. Single use cards can be used for an online payment for instance and then immediately expire. They are, therefore, very secure since they can only be used once and are hardly hackable. If you decide to use virtual cards as a company, you can have an overview of your employees’ expenses and monitor that everything is allowed and legal. The cards can be managed on a centralized spend platform, which is both safe and practical. The budgets are approved by the managers and tracked on the platform. It is then much easier to check a specific expense and who approved it in case of need.

Disadvantages of virtual credit cards

The downside to virtual credit cards is that the seller bears the risk because the products are delivered to the customer even before the funds are transferred to the business account. Another disadvantage is that there is often a long waiting time between the sale and the payment on the merchant’s account.

On the consumer side, when you buy office supplies or a plane ticket, you must show your credit card when you physically need to pick the item. As a result, the virtual card number you used online will not match the credit card number you have. Moreover, recurring fees can become problematic, because your card number may have already expired in your next purchase.

How do I get a virtual credit card?

In the UK, virtual cards are mainly debit cards or prepaid cards, which means that you must first allocate cash to your virtual card before making a transaction. But with digital banking on the rise as well as the interest in the VCC, some companies are starting to include the virtual card payment program in their services. Expensya now offers a virtual card for each employee, expense, and project to simplify your online payment process and secure your purchases.

Read more about it here.

How does virtual card payment work?

You would be surprised to know that virtual credit cards function in the same way normal credit cards do. When it’s time to pay online, you simply enter your VCC information and proceed as usual.

Your virtual card will have all the needed information:

  • A card number
  • Origination date
  • Expiration date
  • Security code

And it will appear to the seller as standard credit card data.

Your cash will be taken from your chosen funding source (the main corporate bank account), and the transaction will be displayed on your bank statement. The distinction is that the number is generally only valid for that transaction, and it prevents websites from saving or remembering your account information.

At Expensya, we offer the possibility of choosing to use professional payment, whether physical or virtual. The virtual credit cards are completely designable according to your employee’s needs and your expense policy. You can set budgets, spending limits, days and hours of authorized usage, and more. Welcome to controlled convenience, where employees can request a budget to spend on their card but must wait for their manager’s approval until doing so. The cards can be blocked online directly in your Expensya personal space, in case of an issue.

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