Things You Should Know About Virtual Credit Card And Its Working


While the use of online transactions is gaining popularity, we must note that online fraud is also on the rise. It’s not uncommon for online merchants to be targeted by hackers who want to steal your data and identities. A virtual credit card (VCC) can prevent online payment fraud by encrypting sensitive information.

What is a Virtual Credit Card?

A VCC is a one-time-use card that allows you to make online transactions. A VCC is the best way to make a transaction online without giving out your real credit card number. It is a safer and easier-to-use solution for making quick and easy electronic payments.

As the name suggests, this card only exists online and is connected to your actual credit card by a random 16-digit number. A VCC can have a spending cap, an expiration date, or even be restricted to a particular merchant. You may be confident that your primary credit card account is secure and fraudulent purchases are avoided as a result.

Features of a Virtual Credit Card

In addition to being essentially virtual, the VCC includes the following attributes:

  • VCCs shield you from data leaks from an unsecured network connection.
  • Credit cards enable people to protect their identities online.
  • VCCs may be made using the bank’s online banking facility.
  • There is no requirement for any extra purchases to acquire a VCC or debit card.
  • VCCs don’t require physical authorization from credit card companies.
  • All you need to do is utilize your smartphone to make transactions via a VCC or debit card.
  • The VCC is intended for single use and is valid for a minimum of 48 hours. It is important to note that VCCs are only available to primary cardholders.

Things You Should Know About a Virtual Credit Card

The most crucial characteristics regarding VCC that make them one of a kind and makes them secure and efficient are:

  • VCC holders can enjoy a credit limit for credit cards that is a minimum of Rs. 100 and a maximum of Rs. 50,000 per day.
  • VCCs can be used for up to 48 hours. However, the validity of their cards depends on the bank offering the service and could be different.
  • Customers can make only one transaction using the VCC, therefore, it is best to use the whole amount in the card.
  • VCCs are only available to the primary cardholder and not to the secondary cardholder.
  • VCCs don’t exist in any physical form, therefore, the risk of cloning cards is much lower.
  • Following the use of the card, if there’s any remaining balance on the card, it will be credited to the customer’s account.

The VCCs may be created using the debit card of the customer if the client does not have a credit card. E-wallets can also be set up and created on the savings account.

There are a variety of private websites, too, that provide virtual cards. The most significant advantage of VCCs is that they can be completely managed by the user in terms of validity, use, and credit limits.

Benefits of Virtual Credit Card

VCCs offer many advantages that are similar to those of traditional credit cards. VCC payment options allow customers to manage their finances, optimize their spending, and secure the assets of their business.

  1. Fraud protection: VCCs safeguard your personal information by restricting the amount disclosed during the transaction. This method is particularly secure because the maximum spending capacity is established and the money assigned to transactions is only for one transaction. These VCCs expire after a brief period.
  2. Limit spending: VCCs offer you the control that traditional credit cards don’t offer. You can freeze your card at any time you want. You can also establish an amount of spending or a deadline for when the card will close or shut down within a few minutes of the first virtual payment. This will allow you to control your budget and limit the amount that your employees can use the card.
  3. Management of subscriptions: VCCs are an easy method of keeping track of all your subscriptions online. You can create a VCC to cover each subscription and limit each vendor or transaction to one virtual card. You’ll be able to keep track of all your subscriptions in one location and will be protected if your credit card information is stolen. You can also confirm if you’ve been overcharged.  

How Does a Virtual Credit Card Work?

A VCC allows you to make online transactions only; hence, it involves some steps to complete the transaction.

  • Enter the VCC number.
  • Input the card’s validity date.
  • Send the OTP to your registered mobile number.
  • Once you confirm the transaction, the payment will be processed.

The same transaction will appear as a credit card transaction on the statement in the same way as a regular credit card transaction will appear.

The Bottom Line

VCCs are superior in many ways compared to conventional credit cards. They reduce the chance of any fraudulent transactions on your credit card since they don’t expose your credit card information to anyone else but you. In addition, VCCs are only valid for a specific number of transactions, which means they can be destroyed in a matter of minutes. The cards are visible to the user, so there is a low risk of fraud. To learn more about VCCs, contact us at Piramal Finance.