What is a virtual credit card?
A virtual credit card is a digital payment method intended for online and card-not present transactions. It’s an automatically generated 16-digit card number used in place of the physical credit card number it’s associated with.
A Virtual Visa / MasterCard can be used multiple times.
💡Did you know: virtual credit cards are supported by the major card networks like American Express, Visa, and MasterCard.
The obvious difference between a virtual credit card and a regular credit card is that you can physically hold and touch a regular credit card, whereas you can’t with a virtual card. By this same logic, you can physically lose a regular credit card or have it stolen. This risk isn’t a factor with virtual cards.
The actual experience of paying with a virtual credit card, however, is essentially the same as paying with a credit card online. Virtual cards can be accepted by any seller that accepts regular credit cards, and they’ll be handled like any other card-not-present transaction.
Why do people use virtual credit cards?
Business buyers like paying with virtual cards because they’re cheaper than paper checks, help them control their spending, integrate well with their accounts payable software, and offer additional layers of security.
How do virtual credit cards work?
Virtual card numbers are generated using tokenization. Tokenization is the process of turning sensitive data (like credit card information) into a unique identifier. Using cryptographic technology, this process helps ensure the original data the token is based on can’t be accessed.
Each virtual credit card number is a unique token. It can be used to make a purchase, but the original credit card number is completely concealed.
Are virtual credit cards secure?
Because of tokenization and the potential to place strict controls for spending, virtual credit cards are among the most secure payment methods for B2B payments.
If a fraudster does manage to get access to a virtual credit card number, they wouldn’t get much value from it because the number would mostly likely be expired or have controls in place to limit spending. If a buyer finds that their virtual card number was compromised, they can cancel it in just a few clicks.