What is a virtual card?
A virtual card is a bank card that exists only in digital form. They are offered by most online banking apps and mobile wallet providers. The virtual card works in the same way as any other card and shares an account number and sort code with the attached credit or savings bank account.
Inside your mobile wallet, there is usually an image of the card containing the 16-digit card number, expiry date and CVV (Card Verification Value). This will differ from any other card attached to the account. The only real difference is that there is no physical card so it cannot be used to withdraw cash from ATM machines. This is because it doesn’t have a chip & PIN or magstripe as it doesn’t physically exist.
There are many reasons why the virtual card is becoming so popular, convenience and security being two of them.
What can I use a virtual card for?
There are two types of virtual cards. One that can be used repeatedly and a disposable card for one-off payments. This is great from a security point of view as once the transaction is completed the card ceases to exist so no further funds can be drawn using those details.
Virtual cards can be frozen at any time and will not affect any physical card or attached account.
A virtual card can be used for mobile payments at point of sale, for instance in a shop or café. It can also be used to make online payments and in-app payments.
For instance, when paying for something online to a new vendor, you can create a single-use virtual card. This way the main card details stay safe and if there is any issue with the transaction it is easily traceable.
Another example is to have a multiple-use virtual card for any subscriptions, again making it easy to keep track of what is being paid and to whom.
Dashing out to lunch, no need for handbags, wallets etc, just a mobile phone.
And, in many places, you can use your virtual card to pay for buses, trains and even taxis.