The internet is too much sometimes: you answer emails, browse the web, scroll social media, get messages, and so on. All these can make you let your guard down, which is what scammers want. Especially when it comes to account takeover fraud. However, there are ways to prevent it, and Genome‘s team is ready to share our insights. What is an account takeover? An account takeover (ATO) occurs when a malicious actor gains unauthorized access to someone’s personal account, varying from social media to a banking app. After that, the scammer steals the individual’s money or personal information. How serious
We live in the world of instant transactions and fast payments. Technology shapes the way we consume and gives us new habits. Virtual cards exist a while on the market, thus only since recently we experience the shift to contactless payments. In this Genome article, we will dive into the virtual card phenomena, how it works, how secure it is, and how to set it up.
Why did virtual cards become so popular recently?
Since the pandemic, the payment situation all over the world has changed rapidly and effectively. According to Visa, governments do support more than ever contactless payments via physical and virtual cards and stimulate raising the payment limits around the world. Markets in Europe, the Middle East, Africa, and Canada have already taken the essential step to motivate more people to use this safe and reliable payment method.
For example, in the UK alone in the premiere three weeks of April 2020 with the increasing of the contactless limit was established. And so there was an approximately 50% reduction in the number of times Visa cardholders had to physically touch a checkout terminal for completing the transaction.
Another case was observed in the USA. The contactless usage of physical and virtual cards grew 150% from March 2019 to March 2020, informs Visa. Besides that, the USA had 175 million contactless cards on the market in that period, and 9 of the top 10 card issuers were actively putting out contactless debit and credit cards for their clients.
At last, the new report from Juniper Research shows that the yearly value of virtual cards used by businesses will grow 90% during the next 4 years, exceeding $1 trillion by 2022. Consumer virtual cards will generate more than $14B in revenue, claims Juniper Research.
How do virtual credit cards work?
The virtual card works in the same way as a physical credit or debit card. It can be used to make contactless payments in stores, online purchases, and transfers. Instead of having a plastic equivalent of the card and keeping it in the wallet, the user is storing a virtual one in the digital wallet.
Some banks immediately give access to a virtual Visa card or virtual MasterCard when the account is opened online. This card enables online shopping, transfers, or contactless purchases in retail. The payment amount is then debited from the account balance, as with any transaction.
To obtain a virtual card a person must follow certain common steps that might slightly differ depending on the bank’s conditions. First of all, the user should choose the right banking institution that offers the feature. The best way is to open an account in the online ecosystem that offers an easy way to operate with the money through an app or on the website.
The second step is to order a virtual card in the bank. The process usually does not take much time, as there is no need to wait for the physical arrival of the plastic card. And the last move is to connect this card to Apple Pay or Google Pay to purchase in retail via the mobile phone or to add the card data on payment devices for online transactions.
What is a virtual credit card?
The virtual credit card performs all the functions fully online and also can be utilized in absolutely the same way as the physical credit card. The user receives a unique 16-digit line of numbers that behaves as the usual credit card number, along with the expiry date and CVV code.
The virtual credit card can function the same as the regular credit card: for phone payments, online shopping, transfers, and in-person via the contactless purchase. All the transactions made with the virtual credit card are transmitted back to the account credit card, relying on the possible line of credit.
What is a virtual debit card?
The situation is quite the same with virtual debit cards as with virtual credit cards. Both are totally online features, with no physical equivalent. The user receives the 16-digit debit card number, its expiry date, and CVV.
The main difference of the virtual debit card is that it does not rely on the credit limit. All purchases made with the virtual debit card are drawn from the main payment account, with the 16-digit card number linked directly to that account. The virtual debit card gives the user all the banking advantages of a virtual credit card.
If you would like to know in detail about different types of bank cards, we recommend you to follow this link “Types of bank cards: a complete guide”.
Why use a virtual card?
Virtual payment cards have only a cash disadvantage: it is complicated to withdraw it and not possible to put it on the card. The reason is the lack of a magstripe or chip for Chip & Pin that is present only on physical cards. But besides that, there are more benefits in them: it is safe to use, better to store, and easy to organize. Let’s look closer at the drawbacks and benefits of the prepaid virtual card.
What are the drawbacks of virtual credit cards?
As we have mentioned above the only difficulty a user could possibly meet with the virtual card is operations with cash. The will to put money on the card in the terminal is definitely not realizable. But to make a withdrawal in the ATM is about to change commonly.
There are already some machines that accept virtual credit and debit cards for taking cash out. Once the virtual card is linked to the Apple Pay or Google Pay digital wallets it is easy to withdraw money from ATMs that are contactless-enabled.
The benefits of virtual payment cards
While there is just one massive minus in using virtual cards, the list of benefits is way larger. Generally speaking, virtual cards are safer than regular ones. They can not be lost as their data such as 16-digit number, expiry date, and CVV code are always stored in the online bank account. At any moment the cardholder can log in from any device in order to use the virtual card or block it if the data was somehow compromised.
Also, virtual cards can be easily stored on the mobile phone for contactless payments and organized according to the purchase type or savings. With the virtual card, there is no need to take care of the wallet every time outside which makes the payment life more relaxed. The last benefit is the ecological aspect. As the issuer of the card presents just the payment data with no plastic, it is a planet-friendly approach.
How safe are virtual cards?
Virtual cards are much safer than physical cards. The virtual credit card number can not be traced by anyone till the moment the user’s identity or actual credit card number is identified. This exact feature prevents hacker attacks, fraud or theft of personal information, and the misuse of personal information.
Safety features of the virtual card
- It is easy to connect a virtual card to the secure method of the mobile payment to perform contactless payments;
- Most of the mobile payments are protected with biometric security or identity verification;
- The virtual card can’t be lost as the physical card for example;
- The virtual card can be easily blocked through the banking app or website;
- It is easy to operate all the parameters including the transaction limit of the virtual card in the banking app or website.
For more information vhevk out Genome’s article: “How to choose the right bank card for personal and business needs”.
Genome virtual card
Genome has developed secure virtual cards with all the payment benefits: instant transfers, online payments, physical purchases via the mobile phone.
Users can create virtual accounts in various currencies (EUR, GBP, USD), controlling their funds in the way they prefer the most. Another plus is that any account in Genome is protected by the fraud prevention system Covery. All features are available on the web and through the app.
To pre-order a virtual card at Genome follow these easy steps:
- Create an account for free if you don’t have it yet.
- Choose the wallet type: personal or business.
- Fill in the personal data.
- Pass a quick verification of the identity to open a personal account.
- To get a business account, you will additionally need to fill in company details and the ownership structure.
- Once you have an account, you can pre-order virtual personal or corporate cards. For more information on the pre-order of virtual, as well as physical debit cards, check out this article.
What does a virtual card mean?
A virtual card means a debit or credit card that exists only online in the digital wallet without any physical plastic presence. This card has all the functions as the regular card, except the limited manipulations with cash.
How does a virtual card work?
The virtual card works exactly like the physical card. If it is a virtual credit card it relies on the possible line of the account credit. If it is a virtual debit card the funds are drawn from the main payment account.
What is the use of the virtual card?
A virtual card has all the functions of the physical one: payments online, physical purchases via Apple Pay and Google Pay, transfers, payments by the phone.
How Do I Get a Virtual Card?
To set up the virtual card is easy. It can be ordered in any banking institution that offers this feature. We recommend checking all Genome’ benefits with virtual cards and digital wallets.