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Virtual card numbers can be used to make cashless B2B payments and can help to get rid of checks.

The business industry is going through a period of transition from the traditional methods of working to involving technology in every process. Payments are one of the major parts of business routine. The Covid-19 pandemic has wedged the usual way of transactions by pulling out new challenges. This has forced businesses to digitise their payment operations. Ultimately, a lot of troubles such as frauds, data and information collection, etc. are involved in an online money transaction. Henceforth, businesses are starting to embrace virtual cards to address the issue.

What is a virtual card?

Virtual cards are online cards which are not physically issued by the credit/debit card provider. It is an electronic card that can be created using the bank’s net banking facility by providing one’s credit or debit card details. The virtual card has a set of sixteen digits similar to the credit card number together with the CVV code that is randomly generated using the software. It helps transact easily through smartphones. The card numbers can be used to make cashless B2B payments and can help to get rid of checks.

Any credit cardholder can request for a virtual card online. When you do, you’ll get a randomly generated card number, expiration date and security code that are tied to the actual account. The spending on the virtual card is displayed in the transaction history similar to other regular card information.

There are two types of virtual cards. They are,

Virtual credit card- Virtual credit cards have a randomly generated 16 digit number that can be used to purchase goods and services remotely.

Virtual debit card- Virtual debits cards are similar to that of credit, but the randomly generated number is linked to an underlying debit account instead of a credit one.

Benefits of using virtual card

Convenient for online shopping: Businesses are also engaged in buying products online for the office purpose. It is a very good way to follow the online mode of transactions in order to keep a tab on the expenses. Henceforth, companies are using virtual cards to make payments online. Virtual cards protect the information of the user. There is no assurance that online sales sites are following all the security guidelines. So, using a virtual card will limit the exposure to individual merchants.

Fraud detection: According to a JP Morgan survey report, 62% of companies were targets of payment fraud in 2014, with the most targeted methods being checks, credit/debit cards and wires. Fortunately, when payments are made virtually, hackers who steal the generated number will not be able to use them. The number will get disabled after a single transaction, and they won’t allow access to the user’s account or any bank details. Most virtual cards also allow users to freeze the cards anytime.

Manage subscriptions easily: The big trouble for online banking users is that it is hard to monitor what exactly banks are charging them for, and when renewals or upgrades may happen. Subscriptions can also be a big security risk if one of the businesses suffers a data breach. Virtual cards can help solve all these problems. Virtual cards can track all the subscriptions in one place as each of them uses new cards.