What's a Virtual Credit Card and are they Useful?March 16, 2023
Table of Contents Contents
How Virtual Cards Work
Virtual cards work the same way as traditional credit cards except for the fact that they are a separate number linked to your main credit card account. Many virtual credit cards generate new numbers for each transaction. This technology provides an extra layer of security, making it much more difficult for thieves to access your private information.
That being said, there are two different types of virtual credit cards.
With digital wallets, the cards can only be used for in-store purchases. How this works is that when a new card is set up in your digital wallet, a unique code for this code is then generated so it isn’t your actual card number that is being used. Once this code is generated, it is then sent to the digital wallet provider who then contacts the bank or credit card company to authorize the transaction.
With mobile wallets, you can't even see the card number when you open the app. Only the last 4 digits are visible. This is the case with all mobile wallets. Here are the 5 major mobile wallets in Canada.
- Google Wallet (Google Pay)
- Apple Pay
- Samsung Pay
- FitBit Pay
- Garmin Pay
Virtual Card Numbers
Some credit card issuers will issue a digital credit card number along with a new CVV and expiration date. These numbers are meant for online shopping because the number is a dummy number. While it is linked to the main credit card account, your card’s security won’t be implicated in the event the company you purchased from is hacked and your information is obtained.
Now, a lot of credit card companies have this virtual credit card feature. The virtual credit card number is often given right away and can be used for online purchases before the physical credit card is received.
Positives of Virtual Credit Cards
The main purpose of a virtual credit card is to protect you from fraud and theft. SInce your virtual credit card information is different from your physical credit card information, it can be canceled and regenerated without having to create you an entirely new account. Some credit card issuers even generate new virtual credit card numbers for every new transaction. This creates even more security, making it so you don’t have to cancel any numbers in the event of a data breach. After its use, the number is no longer active so no cancellation of any kind is required.
Virtual credit cards are also more convenient than physical cards. They avoid having to use checks and reduce the amount you would have to pay in extra fees. Virtual numbers cost nothing.
Negative of Virtual Credit Cards
When it comes to virtual credit cards, it is important to keep in mind that there are some negatives. One of those negatives is returns. Because your virtual credit card number is different from your physical card number, in some cases it may no longer exist, then the merchant may have no way of returning your money. In a case like this then you may have to accept store credit instead.
Another instance is when a merchant requires proof of payment for pickup. Even if you have a receipt, some places prefer to prove that the purchase was your by proving your card number. Since a virtual card number doesn’t match a physical card, it can be difficult to prove that you were the purchaser.
It is also important to keep in mind that, while virtual credit cards provide extra security, they aren’t 100% guaranteed. It is important to still keep checking your account balances and verify that all transactions that were made were yours. If any fraudulent transactions occur, it is important to catch them right away.
Where to Get a Virtual Credit Card
In Canada, there are a few major credit card issuers who provide users with virtual credit card numbers.
By using Eno for Capital One, you can get a virtual credit card. How it works is you install Eno into your browser. Then you enroll with a Capital One credit card. When you go to make an online purchase, Eno creates a merchant-specific number unique to your purchase and linked to your main credit card account. Your virtual cards will then be saved for future use, but all charges will appear on your regular monthly credit card statement.
Citi is another card issuer that provides virtual account numbers. In order to start using this feature, you must enroll online through your online account. How it works is it randomly generates a number for you to use instead of your physical card number. Even though it isn’t your real account number you are using, it is linked to your real account. It is important to keep in mind that Citi doesn’t offer this feature for all of their cards. You would have to check and see if the card you have is eligible for this feature.
Banks and Virtual Credit Cards
When it comes to banks, some of them offer virtual credit cards and some of them don’t. Let’s take a look at what the top 5 banks in BC offer.
Unlike some of the other banks, RBC does offer virtual credit cards. That being said, they only offer them for business credit cards and Visa Debit purchases. This feature comes at no extra cost and is included with all commerce credit card accounts. The virtual Visa Debit is included with all RBC debit cards as a separate card meant for all online purchases. This is different from other large banks that have their Visa Debit number double as their bank card number,
Scotiabank doesn’t offer virtual credit cards but they do have the Scotiabank mobile wallet. This allows you to use your debit card and American Express credit card. You can use these cards directly from your phone for purchases up to $250. That being said, the Scotiabank mobile wallet is no longer available on android devices.
CIBC doesn’t offer any virtual credit cards either. They don’t even have their own mobile wallet, but you can add your CIBC cards to any other version of a digital wallet. Even though they don’t have their own program, you still have access to digital credit cards and debit cards for instore purchases.
BMO also offers virtual credit cards to their business credit card customers. They have partnered with Extend through their existing partnership with Mastercard. All of their BMO commercial bank clients have access to this feature. All they do is use a secure web based platform called Payment Controller to generate a number for a specific payment. You can either create numbers for a one time use or a specified number of uses.
TD doesn’t offer any virtual credit cards or mobile wallets but, just like CIBC cards, you can use TD cards on most mobile wallet platforms. This gives you digital cards for your in-store purchases. You just need to use your actual credit card number for online purchases.
Who Should Get a Virtual Credit Card and Why
If you have the option to get a virtual credit card, they are great for people who do a lot of shopping online. It is also a great option for small business owners. It prevents multiple businesses and suppliers from having your credit card number on file and protects your information in case of a data breach.
Virtual credit card numbers also are much cheaper for business owners. They often are a free feature with business credit cards and reduce the cost of fees since you no longer have to pay for checks or wire transfers.
Really, virtual credit cards are a great feature for those who just want a little extra security when they shop online. It gives a little peace of mind while making it more difficult for your accounts to be breached.