Should You Use a Virtual Credit Card?

By Judith Dayan Persson

Vice President of European Operations and Business Development

MyChargeBack

Since credit cards were invented in the 1950s, they haven’t really changed much until now. Like many other financial services, credit and debit cards are evolving and now virtual cards are available. These virtual cards are similar to physical credit cards, but they eliminate the need to carry cards in a wallet. Are virtual cards really better?

It is important to look closely at the advantages and disadvantages of virtual cards and to decide which is best for you. Getting a virtual card and trying it out on minor, low-risk purchases is a good idea. These cards have many impressive features, such as a one-time number, that can enhance security. 

However, virtual cards require a very secure network to avoid hacking and can’t protect consumers against fraud. In addition, although chargebacks are possible with these cards, they involve an extra step to return the money to the customer’s actual number rather than the one-time number. As with many fund recovery cases, finding assistance in the virtual credit card chargeback process can improve chances of success. 

MyChargeBack experts guide clients through the chargeback process. We create intelligence reports and crypto reports to bolster our clients’ cases. We also provide guidance to consumers who are trying to recover their funds from broker disputes, forex scams, or other types of fraud. Talk to MyChargeBack professionals and get started on fund recovery. 

What Are Virtual Credit Cards?

Virtual credit cards are like physical cards but there is no actual card to carry along with you. Instead of using the same credit card number each time, the virtual credit card uses a different code for each transaction. This is one security feature that gives the virtual card the edge over physical cards.

If hackers get your code, it won’t be worth anything to them because the transaction code is used just once. You can also share this code with others who are making transactions on your behalf. These cards are issued either by a bank or by linking a physical card from another bank to the virtual credit card. 

 Virtual credit cards are similar to using tokens, but the consumer has options concerning how many purchases the card will be good for or to which total amount. These virtual cards, unlike traditional cards, are temporary although customers have something like a credit card number that is associated specifically with their account. 

The Pros of Virtual Credit Cards

The following are some advantages of virtual credit cards:

  1. Convenience
  2. One-time code for added security
  3. Customizable features
  4. Easy to replace if lost and stolen

The biggest selling point for virtual credit cards is convenience. You can use them online or in stores without having to put physical cards in your purse and wallet. Plastic cards are likely to get lost and stolen and can be a gift to thieves, whereas, to use digital cards, the criminal has gained access to the code.

On the issue of a code, there is another advantage. Customers can use one-time codes for transactions or specify how many times a code is used. This means that if you make a transaction and a hacker gets the code from this transaction it is basically useless to them. 

Customers can also make the codes last until a certain monetary amount to prevent large-scale theft. These customizable features make it easy to stay safe. Virtual cards do not involve the complex process of cancelation and order replacement cards. The customer can simply shut off the service and re-install it on a new device. This simple two-step process eliminates the hassle of replacing lost or stolen physical cards.

The Cons of Virtual Credit Cards

Although there are many advantages to virtual cards, there are also some drawbacks:

  1. Still needs a secure network
  2. Can cause issues during verification
  3. Can complicate credit card chargebacks

Of course, it is important to use a secure network with virtual cards. This seems like common sense and not a disadvantage, but there is a concern that consumers will be complacent about the security of these cards and forget to take precautions. 

Even though a hacker gaining access to a one-time code that has been used poses no danger for the customer, hackers can still interfere if the phone is not used on a secure network. It is still possible to access sensitive data and gain access to a phone or a virtual credit card if the customer is not careful on what networks the phone is used or does not update security software. 

Virtual cards can cause some confusion in verification. Purchasing plane tickets or theater tickets often requires the presentation of a credit card for verification. This process will have to be adjusted with the advent of virtual cards because with no physical cards, verification may be denied. In addition, the chargeback process can become messy with virtual cards, because the numbers may not line up. 

How Is the Chargeback Process Different for Virtual Credit Cards

Misunderstandings between customers and merchants may arise when a customer demands a chargeback but has used a virtual card. The merchant may make the chargeback without the additional information to send the payment to the customer’s main number rather than the transaction code, which has expired. 

When this happens, the customer may believe the merchant is ignoring their request or making excuses. This can complicate matters and lead to unnecessary chargeback claims. 

Also, despite the security provided by virtual cards, they do not protect consumers against authorized charges that were transacted under false pretenses, such as opening an account with a broker that was running a forex scam or an issue that leads to a merchant dispute. Regardless of payment method, fund recovery services are still needed to retrieve funds in these situations. 

If you have lost money in a broker dispute or a fraud, it is important to seek fund recovery guidance immediately. Consult with MyChargeBack experts and provide information and assist with chargebacks, wire recalls, and crypto recovery. Our expertise can improve your chances of getting your money back. 

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