Concerned about protecting your personal information? With the ever-increasing number of data breaches, it pays to take steps to safeguard your information when shopping online. A virtual credit card or VCC is a tool that makes shopping online safer by working much like the EMV chip on a modern physical card to reduce the risk of fraud. Here's what you should know about virtual credit cards and how they work. If you're looking for
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Addressing the Risk of Credit Card Fraud
Don't assume credit card fraud will happen to you. Even when you shop at major retailers online and know they take steps to safeguard customer data, there is always a risk that you will face fraud and identity theft.
The data breach trend that has affected companies large and small first began to surge in 2014 and 2015. By mid-2017, the Identity Theft Resource Center (ITRC) reported there were 791 data breaches in the United States, up 29% from the first half of 2016. Data breaches affect all industries and organizations of all sizes. The business sector accounts for 55% of all breaches but other sectors are also represented including health and medical, education, and government. In the past five years, 46% of Americans have fallen victim to credit card fraud.
EMV chip cards are credited with a dramatic reduction in card-present transactions, or purchases when you use your card at a credit card machine, but card-not-present (CNP) fraud is on the rise. This includes online transactions in which you are not physically presenting your card to complete the transaction. With 77% of merchants in the U.S. now selling online and ecommerce rising even further in popularity, the risk of theft online is only going to grow as identity thieves shift their focus to online merchants.
What Is a Virtual Credit Card?
A virtual credit card works a lot like a one-time-use version of your physical debit or credit card. It can be used online to reduce the risk of credit card fraud because it gives online stores dynamic information that changes with every transaction. When you use a regular credit card, the information you supply during the transaction never changes and, if stolen, can be used for fraudulent purchases. Even if a hacker gets access to the card number and other information you used with a VCC, it will be useless because the data can't be used for more than one transaction.
VCC technology is best compared to EMV chip technology found on most credit and debit cards today because both create a unique token for every transaction to prevent the theft of static credit card information.
How to Use a Virtual Credit Card
Using a virtual account number works just like using a regular credit card although there are a couple of extra steps involved. Instead of entering your physical card information online, you will access your VCC service to generate a new account number. Some banks integrate with browser extensions to make the checkout process easier but most require that you log into your bank account separately.
Once the virtual account number is generated, you will use the virtual card's information to complete your online checkout.
Where Can You Get a Virtual Credit Card?
There are two primary ways to get a VCC: through a bank that offers a virtual credit card service or by linking your existing credit or debit card with a VCC service. Here's what you should know about your options.
A number of banks now offer virtual credit card numbers including a few major banks.
- Bank of America. Bank of America has a ShopSafe program but it's only available for their Mastercard and Visa cards. Choose the card you want to use and go to Account Activity to activate the ShopSafe option. You can specify how long the virtual card will remain active and the dollar limit.
- Citi. Citi allows you to link your credit card or debit card with a virtual account number. You can use the bank website to generate new card numbers as needed.
- Capital One. The Capital One Eno program allows you to set up a virtual account number with the ability to keep the card active for up to 12 months. Eno is unique because it creates merchant-specific account numbers to support ongoing or future purchases.
- Visa. The Visa Checkout service is a VCC program offered directly by Visa.
- Mastercard. The Mastercard Masterpass program is a virtual credit card service offered by the credit card network Mastercard.
There are several big banks and card issuers that do not have a VCC program yet. Amex and Discover both used to offer virtual credit cards but discontinued their programs. U.S. Bank, Wells Fargo, and Chase currently do not have any type of VCC service. The new American Express vPayment system issues virtual account numbers but it's only offered for corporate credit accounts.
If your bank doesn't offer a virtual account number, you can also link your card with a service that issues single-use tokens. There are a few VCC companies out there but make sure you check the fine print. While some are free, others charge monthly services and hidden costs. One option is Token, a free program that's available as an app and browser extension. After linking a debit or credit card, a token is generated on demand that can be used as needed. Entropay is another alternative. It works like a virtual prepaid debit card. You can have up to 10 VCCs at the same time, replacing as needed. The virtual account numbers need to be funded with a bank account or regular credit card. Entropay isn't free; it charges a 1% fee.
Final is another popular service that generates disposable account numbers that can be single-use or merchant-specific. Final gives you real-time receipts pushed to your phone. It has no annual fee and gives you 1% cash back on purchases but it requires good to excellent credit. Unfortunately, Final was recently purchased and no longer issues its Final Visa Card.
When You Should Use a VCC
A virtual credit card can't be used for in-person payments and it's not designed to replace your regular card or mobile payment system. Instead, it's designed to give you an extra layer of security when shopping online. There are many cases in which it makes sense to use a virtual account number:
- You are concerned about a data breach. Breaches are only becoming more common. If a virtual account number is stolen in a breach, you don't need to worry.
- You enjoy online shopping. Disposable or virtual credit cards keep you safe when shopping online.
- You want to sign up for subscriptions. Some virtual credit cards can be used repeatedly with an expiration date or merchant-specific account number. In addition to security when signing up for online subscriptions, you can also avoid unnecessary charges by setting a specific expiration date in case you forget to cancel.
- You are concerned about a potentially risky or unknown website. If you aren't confident in a website or it's unfamiliar, take the extra step of using a VCC to protect yourself.
Issues Like Refunds Can Be Complicated
While VCC services always say that refunds are easy as long as you follow store policy, keep in mind using a virtual account number can create problems with some card disputes and refunds. That's because most refunds when you use a credit card are put back directly on the card you used for the original purchase. If you use a virtual credit card that creates a single-use token with every transaction, the account number will no longer be valid for a refund.
Refunds can also be problematic in person if you are required to show the card you used for the purchase — something that's impossible with a virtual account number. There are potential solutions to this problem. Some merchants will give you a cash refund but some may require that you accept a store credit.
Another issue that can be complicated with a VCC is verification. While you can use a virtual account number to book a hotel room, airfare, or rental car, you may be required to have a debit or credit card to swipe when you're ready to check in. In the case of a virtual credit card, the account numbers won't match.
Sometimes with online hotel bookings you can request that the hotel charge the total cost to the card used to make the reservation. You may still need to provide an actual credit card to swipe for incidentals.
Using a virtual credit card may add a few minutes to your checkout process but it's worth it to enjoy greater security and reduce the risk of having your personal and financial information exposed in a breach. Whether you use your bank's virtual credit card service or a trusted third-party service, the benefits are the same. If your current credit card interest rates are too high then consider looking into credit card refinancing as this could save you a lot of money.
As a new technology, it is not surprising that you’d have many questions about virtual credit card. While it is a completely safe way to purchase goods, your curiosity is sure to extend beyond it’ being ‘legit.’
General Information on Virtual Credit Card
What is virtual credit card, anyway? That, and more you’ll learn here.
What is a virtual credit card?
A virtual credit card is a ‘copy’ of your physical credit card that exists online. But makes this an entirely different thing is that except for your name, everything about it is temporary.
Can I use virtual credit cards online?
Yes. In fact, you can only use them online.
What is a virtual terminal for processing credit cards?
It is the online version of the POS (Point of Sale) terminal. It may be used on both virtual credit cards and regular credit cards.
How do virtual credit cards work?
You set an expiry for the eligibility of the information on your VCC, then enter these to make a purchase online. After the set expiry, that information won’t work anymore, rendering the, useless to hackers.
What is virtual credit card payment?
It is the payment you have made using your VCC. This payment is just as legitimate as with your physical credit card.
What is a virtual credit card number?
It is a 16-digit randomly generated number that you enter when making an online purchase instead of the real numbers on your card.
How do virtual credit card numbers work?
While your virtual credit card number is different than that on the real plastic, the bank or credit card company verifies the transaction and draws the amount from your card.
Who offers virtual credit card numbers?
Your virtual credit card number can only be generated from a validated third-party service or the bank issuing your credit card.
Where to buy virtual credit card?
You don’t buy a virtual card, you pay for the service to generate them when needed. However, if your bank issues them, you may get it for free.
How to charge virtual credit card?
Just use the info on your VCC. That automatically charges it.
Are virtual payment credit cards the wave of the future?
Perhaps. It offers heightened security measures to protect your credit card information, but it can still be a hassle to enter different numbers every time you buy online.
How can a merchant verify the virtual credit card?
They don’t. For as long as the transaction goes smoothly, they won’t look into what kind of card you used.
Do virtual credit cards protect from theft?
Virtual credit cards can be more secure therefore protect you from theft. If you're concerned about your finances being comprised or your identity being stolen then you probably need theft protection. We covered the best identity theft protection consumer reports reviewed recently. We also did a Lifelock vs Identity Force comparison recently you may like.
Banks and Credit Cards Offering VCC
VCC is far from becoming as popular as cryptocurrency, but certain banks and credit card companies already offer them. Find out more about them in this section.
Which banks offer virtual credit cards?
A lot of big banks already offer this for free such as Bank of America and Citi. Ask your current credit card provider if they have this as well.
Which credit cards offer virtual account numbers?
Major credit card networks such as Visa and Mastercard offer VCCs, along with other major players such as Capital One.
Does Bank of America have virtual credit card?
Yes. In fact, this bank offers this service to their credit card holders free of charge. If your credit score isn't high enough to qualify there are things you can do to improve it.
How to make virtual credit card Bank of America?
If you’re already a card holder, just log in to your account with them and follow their instructions.
Does Capital One offer virtual credit cards?
Yes. Capital One currently offers it under their service, ENO. However, you have to confirm with them if your credit card is qualified for the service.
Does Chase offer virtual credit card numbers?
No. However, they do have Chase Pay which serve such as a secure virtual wallet for your credit cards with them.
How to generate virtual credit card from Citibank?
Go to this link. After registering your card, you can now select it to generate your virtual account numbers from.
Does Discover still allow virtual credit card numbers?
Yes. And like all credit card issuers, you may only generate virtual card numbers for your cards from them.
How to use T-mobile virtual credit card?
T-mobile is actually pretty vague about the process. But as generating the numbers itself is pretty easy, you may find a similar process as that of a fully online process.
Does Amex offer virtual credit card numbers?
No. While they did offer it more than a decade before it was popular, Amex already stopped offering virtual credit cards in 2004.
Using Your Virtual Credit Card
Learn how to do a couple of transactions with your virtual credit card by exploring your most frequently-asked questions on the matter below.
How to use a virtual credit card?
Generate numbers and set a ceiling amount it can be used and an expiry date. Then, enter these details where needed after checking out your purchases.
How to setup a virtual credit card?
Card issuers and service providers have fairly specific yet similar steps on how to do so. First, register the card with them. Then, you’ll receive a confirmation that you may use it to generate virtual numbers. Be cautious using these cards too. You'll also want to monitor your credit report with a service like Credit Sesame. Read more: Is Credit Sesame legit?
How to get cash from virtual credit card?
There is no way to do that. What you can do instead is use payment gateways such as PayPal to convert the money into virtual cash which you can then transfer to your bank account.
How to refund to a virtual credit card?
That’s actually the hard part with VCCs because after its expiry, you may no longer use it. The best you can do is talk to the seller to give the amount back to your original card, and hopefully, they’ll allow you to reverse the transaction.
How to validate virtual credit card?
You don’t need to. For as long that you got your virtual credit card from a reputable source, you can always consider it valid until expiry.
Transacting with Virtual Credit Card
Now, let’s get to actually using the card. In the following questions, you’ll find out how to use your card with online purchases.
Can you use virtual credit card on Amazon?
Yes. As your VCC works just like a real credit card, you can use it any transaction where a credit card would work.
Can I activate Prime with a virtual credit card?
Yes. However, as it requires a recurring payment, you may have problems with it once the virtual credit card expires.
How to use virtual credit card on FB?
Once you have generated the details of your VCC, simply enter the details where needed.
Why Uber paid with virtual credit card?
Should you decide to pay with cash instead, a virtual credit card ensures that your credit card information will not be used to make fraudulent purchases.
Can I use a virtual credit card on walmart.com?
Yes. As with other online stores, Walmart would not care what kind of card you use for as long as you get to pay for your purchase.
PayPal and Virtual Credit Cards
In this section, you’ll find questions in relation to the use of virtual credit cards and the most popular online payment gateway.
Does PayPal accept virtual credit cards?
Yes. For as long as the transaction comes through, you may use it.
How to get a virtual credit card number from PayPal?
You can’t. They have suspended this service indefinitely.
How to get free virtual credit card for PayPal verification?
Go to popular online card generators such as Neteller and Entropay. Then, register it to PayPal as you would a normal credit card.
Acquiring a Virtual Credit Card
With everything you may have in mind covered already, there’s only one thing left to discuss – actually getting a virtual credit card. These questions might be able to help:
How to get a free virtual credit card online?
Unless you get it from your credit card issuer, you may not be able to get it for free from a reputable source. You may, however, take free trials from relevant service providers.
How to get virtual credit card?
If the bank or credit card company already offers it, you only have to register your card. If it does not, you will have to avail of the services of VCC generator companies. If a good credit score is required and you don't have one then take a look at the best credit repair companies reviews we recently covered.
How to get free trials with virtual credit card?
Most companies that offer virtual credit cards will offer free trials. If you want to maximize this, you have to sign up with every one of them.