April 14, 2024

Mobile payment concept, Smartphone with processing of mobile payments

Virtual credit cards and physical credit cards may serve the same purpose but with one basic distinction between them which is the fact that virtual cards are only available for online transactions, while physical cards can be used in person. This might be the only advantage physical cards have over virtual cards. In almost every other aspect, virtual cards prove safer, simpler and way easier to control.
Virtual credit cards have been gaining momentum and becoming increasingly popular in recent years and it has been embraced by major banking institutions and digital wallet services like Apple pay and Google pay. It is also very important to know that a digital wallet is not the same as a virtual card. Virtual credit cards are digitally created 16-digit numbers that are linked to your actual credit card. Digital wallets are online storage of your payment information that allows one-click virtual payments. Examples of digital wallets include Visa checkpoint, masterpass, chase pay, apple pay, google wallet, PayPal and some other service that allows you to load in your account information and pay with just a click.

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Types of virtual credit cards are;

  1. A single-use virtual card
  2. Lodge cards

SINGLE-USE VIRTUAL CREDIT CARD

This is a virtual credit card with a number that is only valid for one time. After your payment, the virtual card number becomes invalid. The controls associated with these cards can also be as tight as you want them to be.

LODGE VIRTUAL CREDIT CARDS

A lodge virtual credit card has a set credit limit for goods, services, or invoice payments and it is provided to the vendor with the already established credit limit. Transactions from this type of virtual card can never exceed their authorized credit limits and their identifying numbers can be used multiple times.

Virtual credit card benefits over physical cards are as follows;

  1. Unlimited credit card numbers
  2. Subscription management
  3. Set spending limits and deadlines
  4. Online or over-the-phone usage
  5. Cannot be stolen
  6. Fraud protection

The major factors that made virtual credit cards more preferable than physical credit
cards include;

  1. Safety
  2. Easy to use
  3. Control

1. SAFETY

Physical credit cards are exposed to theft and fraud but virtual cards can’t be stolen or lost. The information that a virtual card carries is limited to a single purpose, ensuring the original account credit card number remains private. Though virtual cards are not 100% secure even in case of a data breach or fraudulent attempt, the threat is confined to a specific card that can be canceled in seconds with no interruption to other planned payments unlike the physical credit cards.

2. EASY TO USE

Virtual credit cards are paired with a smart spend management platform to help enhance smooth performance and efficiency. With accounting automation, employees can request and receive funds instantly and employers can easily set and enforce spend policies. Physical credit cards tedious bureaucracy wastes valuable time and stands in the way of fast-paced opportunities. Having designated virtual cards for separate vendors, team members or subscriptions aids in a cleaner and clearer reconciliation and audit process. The real-time visibility granted by virtual credit cards provides companies with big picture context and the chance to decide on what’s best to do at any time.

3. CONTROL

In effective financial management, control is key. Some of the physical credit cards offer limit settings, for example, prepaid cards; a type of debit card, preloaded with a certain amount of money and not attached to any bank or bank account. Similar to virtual credit cards, they can be limited for the initial deposit or reloaded while offering narrow options and none of the benefits of automation or the extra security. You can constantly approve, track and manage vendors, subscriptions and funding requests in an instant while
viewing real-time spend staying in control. It merely takes a few clicks to add money, make transactions, and pay suppliers/buyers online. You’re not limited to a single place or wasting time at a bank waiting for unpleasant Documentation like with actual credit cards.

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