6th July, 2018
Just when you thought you were getting a handle on physical credit cards, along come virtual credit cards to complicate matters.
As you’d probably guess, virtual credit cards aren’t physical credit cards at all.
Instead, they’re a randomly generated 16-digit number designed to protect traditional business credit card information when paying suppliers online.
They also provide the added benefit of enabling limitations on the total balance of the card, meaning payments won’t exceed what you grant your payables team.
Typically, virtual credit card numbers can only be used once and may expire within a month if it’s not used.
The players generating these virtual credit cards are the same as the ones issuing physical credit cards.
We bet you’re quite familiar with their names: American Express, Mastercard and Visa.
Credit card issuers approve your credit card application, set your credit limit, take your monthly payments, provide customer service and offer a rewards program.
Typically, a logo for a payment network (like Visa or Mastercard) and a logo for an issuer (like a bank) will appear on the credit card.
While virtual credit cards do offer another layer of security, people can let down their guard while using them.
Because the security processes in place and the fact it’s intangible, people can think it’s a virtually fool-proof way to pay for stuff online.
But, you still need to make sure you apply the same rigour to virtual credit card transactions than you do with physical credit card transactions.
If you’re using a virtual credit card, make sure that their fraud protection is as robust as any protection you may get with your credit card.
While virtual credit cards can make it harder for thieves to steal your credit card number, most credit card companies already have several other security procedures in place.
In addition, it’s a good idea to regularly check your credit card and bank statements as well as your credit reports.
Some virtual credit cards can only be used online, while others can connect to a mobile wallet for cashless in-store shopping.
For example, Google’s Android Pay offers a Visa Checkout option to their consumers for online purchases, and you can make in-store payments with Mastercard’s Masterpass app for Android phones.
For more information on virtual credit cards, digital wallets or fraud, contact MYOB PayBy.