Your ultimate guide to virtual credit cards in India

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Ever shopped from a new online website and felt tremors while entering your credit card details?

We’ve all been there. But the good news is that you don’t have to worry anymore. Let’s introduce you to virtual credit cards, how it works, benefits and disadvantages, and a list of banks which provide virtual credit cards.

What Is a Virtual Credit Card (VCC)?

A virtual credit card (VCC) is a unique credit card number which allows you to transact with the main credit card without exposing your credit card details. You can limit the use of virtual credit cards by manually setting a spending limit. At the same time, you can set an expiration date for your card.

How Does a Virtual Credit Card Work?

Most online retailers, from Amazon to eBay, store their customers’ payment information. It is convenient for everyone as it reduces the need for entering the details every time. But at the same time, hackers can gain easy access if the data is not securely encrypted, leaving you at the risk of identity theft and fraud.

Virtual credit cards, unlike a normal credit card, use an app to generate a unique credit card number, better known as a token for every single transaction. The token is sent to the retailer and bank to confirm the transaction. Once used for a transaction, these tokens can’t be re-used, therefore, minimizing the risk of potential theft or fraud.

What Are the Benefits of a Virtual Credit Card?

One of the main benefits of a virtual credit card is the ability to close the VCC account without having to close the main credit card account, in case your personal information is compromised. While using a normal credit card, if there is a data breach, you’ll have to get the credit card reissued which might be an issue with recurring vendor payments.

Even if you decide to close a virtual card, it mitigates the risk of your original credit card from being exposed. Additionally, it saves you from the hassle of tracking down and updating recurring payments other than the one affected by the data breach.

What Are the Limitations of a Virtual Credit Card?

Returning items which you’ve ordered online can be one of the main challenges of a virtual credit card. You might be required to tap or swipe the card to authenticate the exchange request, which is not always possible with a virtual credit card. This may lead to you having to accept a gift card instead of getting the cashback for the transaction.

How Should I Use a Virtual Credit Card?

While shopping with a virtual credit card can be a little tricky as opposed to using a normal credit card, since it protects you from identity theft and fraud, the excess effort makes it all the more worth it.
Here are a few ways that could make your VCC a lot more useful.

  • You can make a transaction using a virtual credit card by opening a virtual credit card website. Banks which support virtual credit cards have integrated browser extensions while others require you to log in to your account on their website.
  • Once you’ve signed in with a username and password, you can generate a one-time token. It will encompass a unique credit card number and security code. You may be offered to set an expiration date for your virtual credit card depending on the service provider.
  • Additionally, you can set a spending limit which can be useful if you’re sharing the card with someone else.
  • Now you’re all set to make an online transaction using the details of a virtual credit card.
  • Transactions will show up on your statements of a ‘normal’ credit card.

How Do I Get a Virtual Credit Card?

Virtual credit cards are available in two ways: either by placing a request with a bank which provides this facility or linking a pre-existing credit card to an online service.

Here is a list of virtual credit card solutions available in India:

HDFC Bank NetSafe Card

HDFC bank provides a free virtual credit card solution called NetSafe to its customers. This virtual payment service can be enabled for online shopping transactions made using your credit cards.

Key Features

  • Can be generated for free without any hassle
  • Keeps your actual credit card information safe
  • The monthly statement reflects in your original credit card statement

Axis Bank eShop Virtual Credit Card

Axis Bank provides a free virtual credit card called eShop to its users. You can generate an eShop credit card after registering your credit card details with the Axis Bank official website.

Key Features

  • eShop card is Visa-based, no Mastercard option available
  • The validity period is 48 hours
  • The monthly statement will be reflected in your original credit card statement

ICICI Bank Virtual Credit Card

ICICI bank issues a virtual credit card as an add-on card on the cardholder’s primary card. The credit limit on the ICICI virtual card is set by the user himself, depending on the limit on his primary card.

Key Features

  • Zero cost card which means the bank does not charge any amount on the issuance of the card
  • Like any other credit card, ICICI virtual card is an international Visa card and can be used for all kinds of international transactions as well

SBI Virtual Credit Card

SBI also provides a Virtual Credit Card to its customers which can be generated from their official website.

Key Features

  • The maximum spending limit is INR  5,00,000.
  • It is not enabled for international transactions
  • Only SBI Corporate credit card users can make free of cost international transactions using a Visa-based credit card

Kotak Netc@rd

Kotak Netc@rd is not technically a virtual credit card, but it works in a similar way as a virtual credit card. You can generate a unique card number for domestic and international transactions.

Key Features

  • All the features are the same as a virtual credit card
  • The virtual credit card is Visa-based, no Mastercard option available
  • You can make use of Kotak Netc@rd for a Netflix subscription too

The Future of Virtual Credit Cards

The future of virtual credit cards seems quite robust because of how well they lend themselves to an automated purchasing process. Should your virtual credit card get compromised, you can always delete it, or lock with a simple click using your main credit card. Virtual credit cards built-in security features makes them much safer to use in an expense process rather than using a normal credit card.

Additionally, virtual credit cards protect you from fraud, can be closed down on request, and do not affect your recurring payments making them safe and easy to use.

So the next time you’re thinking of a potential security threat to using credit cards, considering a virtual credit card could prove to be a viable solution.

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