Are virtual credit cards safe?

Yes, virtual credit cards are generally safe and can offer added security compared to physical cards.

Though online shopping is convenient, it also comes with the risk of exposing your sensitive credit card information. But what if you could shop online without revealing your actual card details? That's where virtual credit cards come in.

Let's explore how these digital tools are revolutionizing online security.

What is a virtual credit card?

A virtual credit card is a card that's created digitally and has a unique, one-time number that's different from the one on your physical card. This feature safeguards you against fraud and scams when making online purchases, as merchants don't have access to your real credit card information. You also have the option to lock or delete virtual cards at any point without impacting your real credit card account.

Many credit card card providers offer virtual cards through their online platform. You can easily request credit cards with virtual card numbers and set rules around where it can be used and its spending limits.

Virtual cards can’t be used for all purchases. They’re designed to be used for online transactions, over the phone, or at select physical stores that support contactless payments like Apple Pay, Samsung Pay, or Google Pay.

Are virtual cards safer than physical cards?

Virtual cards offer a layer of security compared to physical cards because they protect your real credit card information. This makes them safer than physical cards in several respects:

• Virtual credit cards can be restricted to specific merchants and limited to certain spending limits. They can also be programmed for single use, automatically deactivating after the first transaction. These rules offer extra fraud protection compared to a regular credit card.
• Unlike physical credit cards, virtual cards can’t be stolen or lost. If you carry a physical credit card and it’s stolen, you can be vulnerable to fraud. Virtual cards live in your digital wallet, keeping you safe from fraudsters.
• Virtual credit cards must comply with the Payment Card Industry Data Security Standard (PCI DSS), which contains regulations and guidelines designed to safeguard credit and debit transactions and prevent the misuse of cardholder information.

What is a virtual debit card?

Similar to a virtual credit card, a virtual debit card is a unique, 16-digit card number with a security code and expiration date that’s created digitally and is different from your real debit card number. Some banks allow you to create virtual debit cards through their online banking or mobile app.

Once you create a new card, you can use it for online payments or in-store contactless payments. This allows you to use funds directly from your bank account without sharing your actual card information.

The pros and cons of virtual credit cards

Virtual credit cards offer many advantages, but they have a few downsides. Here are some of the pros and cons of virtual cards:

Benefits:

• Improved security: Using virtual cards while making online purchases protects your actual credit card details and offers an extra layer of security compared to physical credit cards.
• Flexibility: You have the option to set custom spending limits, choose specific vendors where the card can be used, and set expiry dates–without affecting your real credit card.
• Convenience: Virtual credit cards are generated instantaneously and can be used right away for online purchases and contactless payments.

Drawbacks:

We’ve now discussed the upsides, but what are the cons of virtual cards?

• Can’t always use them in-store: Not all stores offer contactless payments like Google Pay or Apple Pay. While virtual cards are ideal for online shopping, you may be limited when it comes to in-store retailers.
• Refunds may be complicated: Each store has its own policies, and some may only offer refunds through the initial payment method. This could be an issue if you used a virtual credit card number that is now inactive. In this case, you might receive store credit, a check, or a gift card instead.
• Not ideal for reservations: When you make a hotel reservation with a virtual card, it can be difficult to match your payment method during check-in. Hotels typically require a physical card upon arrival, so using a virtual card may require additional confirmation, like contacting your bank.

What providers offer virtual temporary credit card numbers?

Several financial institutions offer virtual credit card numbers for added security when shopping online. Capital One provides virtual numbers through its Eno assistant, while Citi offers Virtual Account Numbers for secure transactions. U.S. Bank has the Instant Card for business users, and Bank of America provides Virtual Travel Cards for corporate expenses.

American Express offers virtual card numbers through its integration with Android devices and Google Chrome as a browser extension.

Notably, Chase does not currently offer virtual credit card numbers for its consumer credit cards. However, Chase cardholders can utilize digital wallets like Apple Pay or Google Pay for secure transactions.

Corporate card providers like Ramp also offer virtual cards with advanced business features, including customizable spending controls and accounting integrations that streamline expense management.

Other ways to protect your information when shopping online

Here are some other methods to keep your personal information safe at online checkouts:

• Use secure connections: Make sure your internet connection is secure by looking for "https://" in the URL and a padlock icon in the address bar before entering any personal information. This indicates that the website is using a secure connection to encrypt your payment information.
• Use a credit card: Credit cards offer better fraud protection compared to debit cards. In the case of unauthorized transactions, credit card issuers generally provide more robust dispute resolution processes and limit your liability.
• Enable two-factor authentication: Many online retailers offer two-factor authentication (2FA), which adds an extra layer of protection by requiring a second form of verification in addition to a password. This could be a text message, email, or an authentication app and can be used on a Mastercard, Visa, or other credit card network.

Create unlimited virtual cards with Ramp

At Ramp, we provide physical and virtual corporate cards that empower your employees to spend while allowing you to enforce your company’s expense policy. Our cards come with spend management features, so you can easily assign virtual cards and create custom guidelines for how they’re used.

In the Ramp dashboard, we provide a comprehensive view of your company's spending, offering real-time updates and cost-saving insights. You can filter spending by merchant, type, or other rules. Our platform also seamlessly integrates with accounting tools, letting you sync expense data to automatically generate expense reports.