Virtual Credit Cards – Instant Utility!

Online shopping has become quite a rage in the country as it gives people access to top brands and innumerable products, from both India and abroad. One is now free to buy virtually anything from electronics, clothing, groceries, fruits and vegetables from the internet. However, not all shopping portals are safe and when the user enters his/her credit card details, including the CVV number; s/he is exposing the entire credit limit to online fraudsters. It is wise to be wary of online transactions where your credit card details will be exposed.

There are safety measures that can be adopted to ensure transaction security; however, sometimes payments have to be made to sites that one is aware of being insecure. To address such dilemmas, banks have launched a virtual credit card which is a one-time transaction, limited period card.

What are they?

Virtual credit cards are, as the term describes, online cards which are not issued physically. It is a free service offered by banks to customers who wish to make an online payment using their credit cards. The major banks offering this facility in India are:

• SBI-Virtual Card
• ICICI VCC
• Axis Bank e-wallet card
• HDFC NetSafe
• Kotak netc@rd

The principle is the same, although the products are named differently by different banks. Credit card holders can use this facility by accessing the net banking facility and providing their card details. Thereafter, the bank will provide you with a virtual credit card with a 16-digit card number, expiry date and CVV number. You can top up the virtual card with as much money as you need to make a payment for and the requisite amount will be credited by the bank from your account.

Points on Virtual Credit Cards

There are some important points to note about virtual credit cards which make them safe and useful, if used correctly:

• A customer is allowed minimum credit limit of Rs. 100 and maximum credit limit of Rs. 50,000 per transaction, per day.
• The virtual credit card is valid for 24 to 48 hours only, though ICICI bank allows a longer expiry date.
• Customer can make only one payment with the virtual card in which they can use all the  credited balance or a part of it.
• If there is any balance amount left on the virtual card, it will be credited back to the customer’s account.
• The virtual card facility is available to the primary cardholder only and not the secondary cardholder.
• In case of transactions where the customer may have to show the credit card the payment was made with, virtual credit cards cannot be used. For instance, if you book an e-ticket generally, the credit card the payment was made with has to be shown at the airport; the virtual credit card will not be valid in this case.
• Since virtual credit card does not have a physical existence, it cannot be cloned, making it highly secure for all transaction purposes.

Can They Be Used Online Only?

For all practical purposes, virtual credit cards can only be used online and are the perfect solution for online shopping. There may be instances where transactions can be carried out over the phone; in such cases, the virtual credit card is only useful if the sales executive undertaking the transaction is using the online payment channel on behalf of the customer.

If You don’t have a Credit Card

Virtual cards can be generated with the customer’s debit card as well. In this case, the amount that is topped up into the virtual card is debited from the person’s savings bank account. Another good option is the e-wallet which is generated and set up against the customer’s savings bank account. These options also come with the same provisions and limitations as that of a virtual credit card. The only difference is that in this case the balance amount on the card is transferred back to the user’s savings bank account and the amount is deducted immediately from the customer’s bank account and not billed against their card.

Besides the issuing banks that we have mentioned above, the virtual card facility is offered by many private websites too. Since for topping up a virtual credit card, one has to provide his/her credit card details, it is important to ensure that the private site is secured too. The best benefit of virtual credit card is that it is completely controlled by the user in terms of its validity, credit limit and usage; hence, the user need not be worried about losing it or its being misused.