Financial Dictionary - Virtual cards
A virtual card is a financial instrument designed for making online payments without needing to present a physical card. Virtual cards have the same elements as physical cards, with the main difference that there is no physical card.
As with conventional cards, you need to know the identification number, expiry date and security code or CVV to use this type of card. Additional validations are often required when using these cards, such as confirmation with an SMS code or PIN number.
How does a virtual card work?
Virtual cards work in a similar way to prepaid cards and must be charged from a current account. Once the balance has been used, they must be topped up to continue using them. If we don't use all the balance on the virtual card, this can always be credited back to a current account.
The market for virtual cards is growing all the time, from cards that only last 24 hours to those that even allow you to issue a virtual credit card.
How can I request a virtual card?
Many financial institutions allow customers to apply for virtual cards through their app or their website.
The main advantages of virtual cards are:
- They give us full control over our spending, by working through top ups. We can never exceed the limit, as that is the amount loaded onto the card.
- As the card is virtual, there is no possibility of loss or theft, unlike a physical card.
- They have all the security features of other cards.
- Virtual cards are issued free of charge and have no maintenance fees.
- This type of card is highly recommended for online purchases, because of their safety.