The risk of identity theft is on the rise, and it’s becoming a serious concern. In fact, over the past decade, the number of people who have fallen victim to fraud and identity theft has nearly tripled.
The FBI estimates that the total losses from cybercrime in 2023 will reach a staggering $10.2 billion – almost double the amount from the previous year, which stood at $6.9 billion. This alarming increase in losses signifies the growing impact of cybercrime in our digitally-dependent world.
Victims bear the brunt of this evolving threat. It’s evident that as our reliance on digital technology grows, so does the magnitude of the consequences we face.
Now more than ever, virtual card numbers, which allow you to shop online without giving merchants your actual credit card number, are crucial to help protect against online fraud.
What Is a Virtual Card Number?
A virtual credit card is a special kind of card number that is generated for a specific transaction or limited time frame. It acts as a temporary and unique substitute for your physical credit or debit card. With virtual card numbers, you can shop securely online without revealing your actual card details.
How Do Virtual Card Numbers Work?
A virtual card number serves as a replacement for your real credit card number, adding an extra level of security to your transactions.
When it comes to processing, these temporary bank account numbers are handled similarly to regular credit cards. However, if a virtual account number is intercepted or stolen, all that is obtained is a series of digits without access to your actual credit card or sensitive information. This helps protect against fraud and prevents unauthorized use of your card details.
Difference Between a Virtual Credit Card Number and Mobile Wallets & Payment Apps
A virtual credit card number acts as a temporary substitute for your real credit card number, adding an extra layer of security and reducing the risk of fraud if the virtual number is compromised.
On the other hand, mobile wallets and payment apps employ technologies like tokenization and biometric authentication to enhance security and safeguard sensitive data stored within the app.
Virtual credit card numbers are primarily used for online or remote transactions, providing control over spending limits and subscription terms. In contrast, mobile wallets and payment apps offer a wider range of features, enabling both online and offline payments, contactless transactions, loyalty program integration, and peer-to-peer money transfers.
Benefits of Shopping Online with Virtual Cards
Enhanced Security and Protection from Fraud
Virtual cards shield your sensitive information, preventing it from being exposed during online transactions.
The added security of virtual cards is particularly beneficial in situations where data breaches or phishing scams are prevalent, as it limits the information accessible to fraudsters and reduces the risk of unauthorized use.
Virtual cards can simplify subscriptions by providing better control over recurring payments.
It’s common to forget about ongoing subscriptions, leading to unexpected charges.
With virtual cards for subscription services, you can easily set spending limits, specify the duration of the subscription, or even close the virtual card after a specified time. This ensures that you have more control over your subscription expenses.
Make Shopping on New or Unfamiliar Sites Safe
When shopping on unfamiliar or new websites, virtual cards offer an added layer of security.
Instead of exposing your actual credit card details, you can use a virtual card number, reducing the risk of your information being compromised.
Controlled Spending Limits
Virtual cards let you set specific spending limits. For example, if you have a specific budget for online shopping, you can create a virtual card with a predetermined spending limit. This helps prevent overspending and ensures that you stay within your allocated budget.
The Downside of Virtual Account Numbers
Virtual Account Numbers Only Work Online
Virtual account numbers are designed for online transactions and cannot be used physically like a traditional credit card. This limitation comes from the nature of virtual cards – they are temporary and generated specifically for online or remote use.
In-person transactions or situations where a physical card is required may not be compatible with virtual account numbers.
Returns Can Be a Hassle
The process of returning items purchased with a virtual card number can be more complicated compared to using a physical credit card.
Merchants may face difficulties in processing returns, potentially leading to a more difficult and time-consuming return process. To address this issue, it’s recommended to keep documentation and proof of purchase, communicate with the merchant regarding the return, and work closely with the virtual card provider to resolve any issues that may arise.
Verification Causes Issues
Some transactions, particularly those made online or by phone, may still require the physical presence of a credit card for verification purposes.
Since virtual cards do not physically exist, this can create difficulties when attempting to complete such transactions. In these cases, alternative payment methods or contacting the merchant directly to explore other options may be necessary.
They’re Not Yet Universally Offered
Despite their advantages, virtual account numbers are not yet widely offered by all banks and credit card issuers. The limited availability of virtual cards may be a barrier for individuals who wish to take advantage of this added layer of security.
How Do I Set Up a Virtual Credit Card?
Choosing the Right Virtual Credit Card Number Provider
When selecting a virtual credit card number provider, you should consider the provider’s reputation, security measures, ease of use, available features, and compatibility with your existing accounts. Research and compare different providers before making an informed decision.
Other Options for Making Your Online Shopping Safer
If your credit card issuer does not offer a virtual credit card option, there are alternative security measures you can consider. Some credit card companies have background programs designed to check your identity for added security.
Plus, using a credit card instead of a debit card can give you an extra layer of protection against fraudulent transactions.
You should also monitor your personal and financial information. IdentityIQ credit and identity monitoring services include internet and dark web monitoring. These services can help keep you and your credit card information safe.
Virtual credit card numbers provide enhanced security for online shopping, protecting sensitive information and simplifying subscriptions. They make shopping on unfamiliar sites safer and offer controlled spending limits.
While there are limitations, such as online usability and potential return complications, the benefits of virtual cards for online safety are significant.
Are Virtual Cards Safer Than Physical Cards?
Virtual cards provide an added layer of security compared to physical cards thanks to their temporary and unique nature. This feature reduces the risk of exposing your actual credit card information, enhancing your overall protection.
What Makes a Virtual Card So Much Safer to Shop with Online?
When you use a virtual card, you enjoy a temporary payment method that minimizes the exposure of your actual credit card information. This means you’re protected against potential data breaches or unauthorized access to your sensitive details, giving you peace of mind while making online purchases.
Plus, virtual cards often come with extra security measures like transaction limits, empowering you with greater control over your online spending habits.
Can Money Be Refunded to a Virtual Credit Card?
Yes, money can be refunded to a virtual credit card in most cases. When a refund is issued for a purchase made using a virtual credit card, the funds are typically credited back to the virtual card account.
From there, you can choose to use the refunded amount for future purchases or transfer it to your linked bank account, depending on the policies of the virtual card provider. It’s important to review the terms and conditions of the specific virtual credit card service you are using to understand the refund process and any associated fees or limitations.