Virtual debit, credit cards: How do they work and are they safe to use for online transactions? (Pixabay)
Virtual Debit Card, Credit Card: In recent years, the Indian economy has undergone a significant transformation, driven by the rapid advancement of technology and the proliferation of digital devices. This transformation has resulted in the emergence of digital economy, characterised by the widespread adoption of virtual cards.
Virtual cards are digital versions of physical bank cards. Unlike traditional credit or debit cards, virtual cards are not tangible cards that can be lost or stolen. These cards have 16-digit unique and digitally generated code which can only be used for a single transaction or a specific amount of time.
Virtual cards are generally issued by banks and other financial institutions. For issuing a virtual debit card, it is not necessary to own a debit card. Anyone who uses net banking or any app of the bank can get a virtual debit card to his name. But in most cases, a credit virtual card is only issued to a person who already owns a credit card. However, there are several banks that provide a virtual credit card even if a person who is not owning a physical credit card.
To use a virtual card, a person typically needs to open an account with a financial institution that offers virtual card services. Once an account is opened, he/she can create a virtual credit card and link it to their regular credit or debit card or bank account.
When you buy online, you will have to use the virtual card number and security code, akin to a physical card.
"Using virtual cards is a great way to keep your credit card information secure while still being able to make online purchases," Jyoti Bhandari, Founder and CEO, Lovak Capital said.
However, there are a few safety tips to keep in mind while using a virtual card.
1. Avoid sharing your virtual card details with anyone and be cautious when making purchases from unfamiliar websites or merchants.
2. Setup two-factor authentication to add an extra layer of security to your account by requiring a second form of identification, such as a code sent to your phone or email.
3. Set a limited amount as a limit in virtual card in order to reduce the risk of losing money in fraudulent activity.
Jyoti Bhandari said that virtual debit cards are valid till all the amount in virtual card is used or its validity expires, whichever is the earliest.
"Different virtual card providers issue the card with different time validity. Virtual credit cards are disposable in nature and in most cases they are for one time use," she said.
Ashish Arora, CA and founder, Businesskaro, said, that virtual cards are a safe and secure way to make online purchases. They offer increased security and flexibility compared to traditional cards and they are easy to use. However, such cards also come with some risks, such as fraud and hidden fees.
"It depends heavily on technology because virtual cards require a stable internet connection and a compatible device to be used, which may not always be available," he said.
So, when internet is moving with a faster pace than ever, virtual cards can be considered as a boon to the economy as it provides us with multiple benefits. As we navigate through transition, it is important to embrace the potential of digital technologies while also being mindful of the risks and challenges that come with it.
