Virtual Credit Cards
Virtual credit cards allow you to purchase goods and services anonymously online. Just sign up up for an account at a provider (listed below), deposit money onto your card(s) through your bank or credit card, and then go shopping without revealing any of your actual card information anywhere!
When making purchases online from well known vendors like Amazon, most people feel pretty confident their credit card information remains secure during the transaction process. Amazon isn’t going to abuse their personal information, and pending a major security breach, it will remain safe with them.
It’s a different story when it comes to online vendors who are new or have very little online presence to speak of. There are definitely security risks involved when sharing personal information with these smaller, possibly unscrupulous businesses. They have all of their personal information.
What’s to stop them from taking a vacation on a customer’s dime? For criminally minded merchants, they don’t need much motivation to use the personal information for their own personal use.
While a customer won’t be held liable for unauthorized purchases, it could get rather inconvenient for them if they have to wait while those charges are removed so they can use their card on actual legitimate purchases.
The bank has to investigate the theft, you have to get a new card issued, etc.
Virtual credit cards eliminate the risk involved in any online purchases. It doesn’t matter who they are buying from, virtual credit cards keep their sensitive information safe.
Sound futuristic? Well, the future is here!
So, what are virtual credit cards and how do they keep a user’s sensitive information safe?
All very good queries. It may sound like a thing of tomorrow, but it is a virtual tool which has been in use for some time now. Its purpose is to fight online fraud, which we all want more protection from, right?
It is far too easy these days for criminals to gain access to credit card holder’s personal information.
Credit card companies have become very creative in fighting back against these security threats. (Read about it here. EMV.)
The ways these futuristic wonders work...
When a customer uses a virtual credit card number, they are using a uniquely generated virtual credit card number. The number is generated randomly by the provider and is associated with the customer’s actual credit card account.
Users can choose to have a maximum purchase amount set for transactions as an added precautionary measure. This is dependent on the issuer or financial institution which provides the virtual credit card.
The virtual credit card user can typically set the expiration date for anytime between the time of the transaction up to a year. But some VCCs expire according to the issuer.
You fund a virtual card. Either your actual card or bank account is associated with your virtual credit card and it draws automatically from your funds (the way PayPal does it).
Or you put a certain amount on the VCC and when it runs out, you either fund it again or stop using it.
The coolest part about virtual credit cards is that on the merchant’s end of the transaction, they have no way of knowing it is a virtual credit card number being used. It appears the same to them as a non-virtual credit card transaction.
The charges will show up on the user’s bill the same as always, but the merchant never sees their personal information (unless it’s to ship something). They never see the actual user’s credit card number either.
The added security for customers is huge.
On your end as a merchant, you will never notice a difference. Not that you need to or care to since you are not one of those unscrupulous merchants out there trying to take advantage of your loyal customers. It’s just business as usual.
There is no added work for you or any extra steps on your end which need to be taken. All of the customer’s information appears the same as it normally does and you can conduct the transaction the same as any other.
The benefits for you may not be as obvious as they are for the customer, but there are one or two perks in it for you as well.
While you may be a virtuous business owner or merchant, there may be someone who works for you who isn’t quite as honest as you are. Of course we all hope this isn’t the case and that all of your employees are upstanding and conduct themselves as professionals.
What virtual credit cards do is eliminate the ability for dishonest employees or honest employees who are tempted to do something they should not. It will stop this threat to your customer’s security before it has the chance of happening.
Another subtle perk for you might be more subconscious but it is nonetheless a perk. Knowing virtual credit cards exist for your customers to use when shopping with your online business can possibly help alleviate some of your concerns about threats to their security.
No one wants to create an online presence which is tainted by fraud. It is very hard to repair the damage once it is done. Sometimes it isn’t repairable. Just think of where this would leave you and your business.
You want to establish trust with your customer base, so this added security measure is a bonus for both the customer and for the legitimacy of your business. Embrace it!
Virtual Credit Card Providers
- Entropay - A virtual card. The card number exists only in your secure account. You will not receive a physical card.
- Netspend - More of a prepaid card. You will receive a physical card.
- American Express
- ICICI VCC
- HDFC VCC
For more information, give us a call at (888) 510-9871 or check out www.redfynn.com.