It’s been a while since virtual credit cards have been around, in various forms, but they still don’t manage to attract customers that much. But, according to a report from Market Watch, a couple of startups are planning to change this as soon as possible, by making the cards’ advantages known to a broader audience.
We’re talking about Pay With Privacy and Token Payments, two companies who want to help consumers avoid credit card fraudsters, at a time when data breaches seem to be more and more common.
But what are virtual credit cards?
This type of cards come in various forms, but they are actually temporary credit card or debit card numbers, generated completely random. In most cases, they link to an actual payment account, like a credit card, debit card or checking account.
Usually, virtual credit cards are made for a one-time use, thus being known as “burners”. To be more specific, this means that they will expire after one use, but there are some exceptions as well: some cards can actually be scheduled to last for up to one year.
Even more, some cards can be locked for use with just one merchant, while others can be set to allow a maximum charge amount.
As mentioned above, the main purpose of virtual credit cards is to avoid fraud. Since they carry a small amount of information, the damage done by a hacker who gets hands on one is minimal.
Are there any disadvantages?
Of course. A lot of financial experts are mentioning the associated fees they come with. However, you should be aware of these before using such cards, since everything is mentioned on the fine print each card comes with.
Otherwise, there’s nothing that significative which should stop people from using them, especially when it comes to a specific public category.
“Most millennials are not carrying credit cards now,” said Gardner. “But they all have mobile phones. And the ability to instantly make a credit decision and pay with the mobile phone is beautiful consumer experience and it also generates choice.” said Jason Gardner, CEO of fintech firm Marqueta, specialized in enabling companies to issue and manage virtual credit cards.