Digital transactions are becoming increasingly prevalent in India. Among the innovations driving this shift is the virtual credit card (VCC). A virtual credit card is a digital counterpart of a physical credit card, designed primarily for online transactions. Issued by banks, a virtual credit card is essentially a temporary card number that links to your actual credit card account. This number can be used for making purchases on e-commerce platforms, thereby offering an extra layer of security.
Issuance and Activation
To get a virtual credit card, you need to have a regular credit card or a bank account with a bank that offers virtual credit cards. Many banks offer virtual credit card options to their customers but the service and features may vary. You can generate a virtual credit card through your bank’s online portal or mobile app.
Temporary Card Number
Once generated, the virtual credit card comes with a unique card number, CVV, and expiration date, much like a physical card. However, this number is temporary and typically valid for a single transaction or a limited period, usually 24 to 48 hours.
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Transaction Process
When making an online purchase, you enter the virtual card details instead of your actual credit card details. The transaction amount is deducted from your linked credit card or bank account, ensuring that your primary card information remains secure.
Security Features
Virtual credit cards offer enhanced security features. Since the card number is temporary, even if it gets compromised, it cannot be used for future transactions. Additionally, the VCC limits the risk of unauthorised access to your main credit card account.
Benefits of a Virtual Credit Card:
* Enhanced Security: The primary advantage of a virtual card is the added security. Since the virtual card details are temporary, the risk of fraud is significantly reduced. This is particularly beneficial for users who frequently shop online.
* Control Over Spending: These cards allow users to set a specific transaction limit, which can help in controlling spending and preventing overcharges.
* Convenience: Virtual credit cards eliminate the need to carry physical cards and offer the flexibility of generating card details instantly for online purchases.
Adhil Shetty, CEO, Babkbazaar.com, says, “One of the key features of virtual credit cards is that they provide an extra layer of privacy, as they do not reveal the details of your actual credit card. You can control your transactions to ensure enhanced safety.”
Drawbacks of a Virtual Credit Card:
Limited Usage: Virtual credit cards are primarily for online transactions. They cannot be used for in-store purchases or for services requiring a physical card.
Validity Period: The temporary nature of VCCs can be a limitation if you need to make multiple transactions over an extended period, requiring you to generate new card details repeatedly.
Acceptance Issues: Not all online merchants accept virtual credit cards, which can limit your options when shopping online.
Should You Apply for a Virtual Credit Card?
Whether or not to apply for a virtual credit card depends on your online shopping habits and security concerns. Here are a few considerations:
Frequent Online Shoppers: If you frequently make online purchases, a VCC can offer significant security benefits and peace of mind.
Security-Conscious Users: For those who prioritise security and wish to protect their primary credit card details, VCCs could be a useful option.
Occasional Users: If you only make occasional online transactions, the convenience of a VCC might outweigh its temporary nature and limited usage.
Shetty explains, “Virtual credit cards provide a significant advancement for digital payments, offering robust security features and convenience for online shoppers.”
While virtual credit cards come with some limitations, the benefits often outweigh the drawbacks, making them a valuable tool for enhancing online transaction security. If you prefer convenience and easy accessibility to funds without carrying your physical credit card everywhere, a virtual credit card can enhance your digital payment experience.