What is a virtual credit card? A virtual credit card may also be known as a single use card, a virtual prepaid credit card, or a virtual credit card number. Some companies may use other names for their virtual credit card services such as virtual account numbers, ShopSafe, secure online account numbers, and others. No matter what name it is called by, the concept is the same. A person’s bank, or other financial institution, will generate a credit card number or account number, that is linked to an actual existing account, for users to make purchases online. This is only a number, hence the reason it is called virtual, there is no actual card a user will receive.
There are a number of different ways that the virtual credit card can be set up and used. Depending on where the virtual credit card is issued the number may be set for a one-time use at a specific website, it may be set with a pre-set spending limit, or it may be set to expire on a specified date. However the number is set to be used, the number can not be used to gain any personal identifying information about the owner of the account. This is a novel concept that was started to help stop the rampant problem of identity theft that is so common in online purchases. Using a virtual credit card makes it so that the user doesn’t have to rely on the merchant services or security efforts of the website from which the purchase is being made. If the virtual number is somehow compromised, the third-party will not be able to retrieve any personally identify information that could lead to identity theft.
Typically a virtual credit card is free to acquire and use but it does depend on how the virtual credit card is obtained. The concept seems a little confusing and complicated and for people that make a lot of online purchases it may be more hassle than one wants to deal with. Creating a new virtual credit card every time one is making a purchase could become a cumbersome process. This may be one reason that the concept of a virtual credit card has not really taken off. Other services, like PayPal or ProPay, seem to offer just as much security and only requires a one time setup. Because most places accept PayPal and the only identifying information that is given is a person’s email address the concept of the virtual credit card may already be replaced by other more efficient ways to protect one’s identity.
One word of caution when using a virtual credit card, do not use a virtual credit card to make a purchase that will later require you showing the actual card that was used to make the purchase. For instance a hotel reservation or concert tickets that will be picked up at will call. Even though the virtual credit card may very well be linked to the actual credit card, the numbers will not match up and there will be no way for the third-party to verify that you actually made the reservation or purchase.
A virtual credit card is not a perfect solution but it is a valid option for the wary online shopper looking for a safe ways to shop online. To find out more about options available for a virtual credit card or virtual account number talk to your bank or financial institution to find out what is available. Most big companies offer the service for free but if you are using a smaller bank that doesn’t offer such a service there are other companies, like ShopShield, that offer the service for a yearly subscription or a per use fee.
Visit 100 Best Merhcant Accounts for more information about accepting credit cards online and other merchant account services.