Virtual Credit Cards

Guide To Virtual Credit Cards In Canada

As a result of cybersecurity threats and data breaches, there has been an upsurge in the interest of people in alternative and secure methods of financial transactions. One of the significant methods for secure online payments is the use of virtual credit cards.

Virtual cards help you minimize the number of personal information you share publicly at payment or purchase outlets. Hence, the issuers of virtual credit cards have designed it to ensure that users enjoy the convenience and protection of privacy that comes with its usage.

Virtual credit cards allow for the anonymity of its user such that it can be registered under any name or address, and the identity or personal information of the user is not revealed while making purchases or payments.

What Are Virtual Credit Cards?

A virtual credit card is a unique and digital credit card number that allows you to make online transactions on your credit card without divulging your personal information. Virtual credit cards ensure the safety of your information. Although virtual credit cards are limited to online usage, especially for shopping in online stores, it helps to reduce the risk of fraud.

Generally, a virtual credit card works like your plastic credit card, as it can be used to make payments for shopping or purchases – either online, email order purchases, or over the phone orders.

How Virtual Credit Cards Work

The temporary card number generated for use in online transactions helps protect the data of users against unauthorized third-party access, and thus reduce the possibility of credit card frauds. As an online shopper, every time you make purchases online the virtual credit card provides you with unique and dynamic credit card information for each of your transactions.

The majority of online retail shops and merchants store the payment information of their customers. The reason for this most of the time is to ensure that users do not go through re-entering their information every time they make payments. One significant challenge with this, however, is that cyber thieves, known as hackers, are always looking to gaining access to this data. The hackers then steal your identity and credit card information to commit fraud.

However, virtual credit cards aim to solve this security problem by generating a new credit card number or token that you can use for any of your online transactions. Every transaction has its own generated set of numbers, hence, its storage and theft are useless to hackers.  The virtual credit cards create a token for every purchase to prevent data storage and unauthorized usage of your static or plastic credit card data.

How To Use Your Virtual Credit Cards

It should be noted that virtual credit cards are designed to be used online or over the phone transactions. Thus, when checking out of your online purchases, you will need to open your virtual credit card site (issuer’s website). In some cases, there are provisions for browser extensions by some banks that support virtual credit cards.

Furthermore, you are expected to log in and generate a one-time password (OTP) or token.  This will contain your unique credit card number and security code. You can set an expiration date for your virtual card, and you can also set a spending limit on the card.

To sum it up here is all you have to do to effectively use your virtual credit card:

  • Sign up with a virtual credit card issuer and get your virtual card details (such as your card number, validity date, and the CVV).
  • Shop at online stores and merchants, and fill the required information at checkout.
  • At the payment section, enter your virtual credit card details in place of your normal credit card.
  • Submit payment and complete your transactions.
  • The funds will be deducted from your bank account that is linked to your virtual credit card.

What Are The Benefits Of Using Virtual Credit Cards?

Security and Safety: Virtual credit cards help to protect your identity and also ensure the safety of your payment information on the merchant’s website. It is easier to shop online in a secure environment with the use of virtual credit cards for your purchases. The virtual credit cards have the same security features as your physical credit card.

Uniform Functionality: Your virtual credit card functions the same way your plastic card works. The major area is that it can only be used for payments online, telephone or mail order.

Free of Charges: Majority of virtual credit cards come free of charges as it is linked to your existing bank accounts.

Instant Delivery And Usage: Unlike your normal credit card that takes a while before being delivered to you,  the virtual credit cards have instant registration and delivery of virtual card number, which you can use immediately for payments.

Mobile Wallet: Unlike the plastic credit card which is stored in your wallet, virtual credit cards are stored in your smartphone which makes it convenient to manage.

Virtual Credit Card Issuers and Providers

For several years, virtual credit cards have been available to consumers for use. You may be able to get a virtual credit card through the bank or financial institution that issues your normal credit card if they also offer virtual credit cards. Major e-commerce sites also issue and accept virtual credit cards.

Another way to generate virtual credit cards is through a third party card service provider. Virtual credit cards come in three different forms – bank-issued cards, store-bought cards, and online or fintech companies.

Here are some virtual credit cards issuers in Canada:

  1. Kotto Visa Card: This is a free prepaid and reloadable card that you can use anywhere Visa is accepted. Kotto allows you to fund your account and spend it however you want, and still get cashback and other perks.
  2. Stack MasterCard: This is a virtual or prepaid MasterCard, reloadable for online purchases. It also comes with an app that helps you manage your spending. This app is available on iOS and Android.
  3. CIBC AC Conversion Visa Card: This virtual credit card or prepaid card is issued by the Canadian imperial bank of commerce (CIBC), one of the big five banks in Canada. You can order for the card online or in-person at a local branch. Interestingly, you can load up to ten different foreign currencies at the same time. This includes the Canadian dollar (CAD), American dollar (USD), British Pounds (GBP), Euros (EUR), Australian dollar (AUD), Turkish Lira (TRY), Swiss Franc (CHF), Hong Kong dollar (HKD), and the Mexican Peso (MXN). Also, this virtual card comes with an app on an android and App store with which you can load your card with your chosen currencies.
  4. RBC Virtual Visa Debit Card: This virtual card from the royal bank of Canada is a smart and safe way to pay for online, telephone, and mail order purchases. The funds are debited from your RBC banking account. This card is suitable for Canadians who shop online but do not want to use their credit cards for online purchases. This virtual card can be used at online retailers that accept Visa payments.

Other virtual credit cards and types include:

  • American Express Gift Card
  • Home Trust Secured Visa Card
  • Vanilla MasterCard and Visa
  • Desjardins Prepaid Card
  • Direct Cash Tag Visa Card
  • Enviro Reloadable Visa Card
  • Vancity Community Investment Bank Visa Prepaid Card
  • Scotia Bank Reloadable Visa Prepaid Card
  • WE Financial Prepaid Visa Card
  • Mongo Platinum Prepaid Visa Card
  • CIBC Smart Prepaid Visa Card
  • BMO Prepaid MasterCard
  • EPIC Prepaid MasterCard
  • Horizon Plus MasterCard
  • Money Mart Titanium MasterCard
  • Pay Power Express
  • Peoples Trust Secured MasterCard
  • PIVOT Prepaid Visa Card
  • Scotia Bank Visa Gift Card
  • Sekur Visa Card
  • Shoppers Drug Mart Vanilla Visa and MasterCard
  • Visa Cash Passport
  • Visa Prepaid Card
  • Apple Pay
  • Payoneer, and more.

Virtual Credit Cards FAQ

Where Can Virtual Credit Cards Be Used?

Your virtual credit cards can be used for online purchases with any Canada and international online retailers that accept such payment method.

Why Is It Called Virtual?

The virtual card can only be used where a card is not required to be physically presented to the merchant.

Can I Use My Virtual Credit Cards As The Normal Credit Card?

The virtual credit card reference card does not have a magnetic stripe or pin or chip and cannot be used at ATM or store. It can only be used for online transactions.

Can I Use Virtual Credit Cards For Purchases Other Than Online Purchases?

Yes. Your virtual credit cards can be used for telephone and mail order purchases.

What Information Does My Virtual Credit Card Contain?

The information on your virtual card is all you need for online, phone, or mail order payments. They are:

  • Your virtual credit cards number (16 digits)
  • The validity or expiry date
  • CVV2 ( 3-digit security code at the back of the card)
  • The name of the account holder.

Final Thought

Virtual credit cards are meant to give you some level of financial security and rest of mind when making online payments, but they can only be used for online shopping.

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