In the era of fintech and virtual payments, the use of Virtual credit and debit cards has gone up. Market insiders predict that the use of virtual cards will go up by 280 percent as people use these cards more and more for daily payments. The market size has already expanded beyond a trillion, and in coming years, it will reach $9.1 trillion in value. Let us know about virtual cards and Virtual card APIs to understand the use of virtual payments.
What is a Virtual Card?
A virtual card has all the features of a physical payment card, but it exists in the virtual space. You cannot hold a virtual card, but you can see it on your device screen. Many banking applications and fintech tools today come with virtual debit and credit cards. The virtual card APIs can also be used to connect the card to digital wallets and UPI wallets like Apple Pay, PhonePe, and other banking applications. The virtual card APIs are created on demand from the user, and they can be used in a controlled way. For example, it could be a single-use card, or it could be a multi-use card present in your mobile phone.
How Does a Virtual Card Work?
The virtual debit or credit card works with the help of a virtual card API that can be integrated with your banking application features. The accessibility and use are somewhat similar to physical cards. The virtual card also holds the account information and authentication information like the name of the holder and CVV so that payment can be done accordingly. The virtual cards have a 16-digit identification number, a name, a verification code, and an expiry date on it. The design of the virtual card might be made in such a way that it looks like a physical card.
Any kind of transaction on the virtual cards is done after verification of details and transaction by the user. After the checkout and the remit of the money, the transaction is recorded in the account statement so that the user can know, just like the card statement of a physical card. The user will get a successful payment statement on the mobile number that is linked with the bank and the virtual card API in the banking application.
It is easy to get a card in a virtual manner. These days, many banks and NBFCs offer virtual card APIs to be used by customers. The customers need to head to the application and complete the KYC process for the details of identification. The issue of credit or debit limits is very fast, and usually, the user gets the limit within a few minutes. There are many buy now, pay later apps, like e-commerce apps, that partner with banks and issue virtual cards to people so that they can carry out their purchases very easily.
What are the Advantages and Disadvantages of using Virtual Cards?
There are many advantages and disadvantages of using Virtual card APIs in your banking applications.
The credit and debit cards that are issued by virtual methods can show up very fast. Usually, you get the virtual card within 5 to 10 minutes. The process of activating the card is also very easy and can be done virtually. You can control the usage of the card virtually and decide the usage limit very easily. Since all the actions can be taken virtually and quickly, it is a sure advantage for people who are in need of money on an immediate basis. The user can set the spending limit and other restrictions to protect the card API on his phone.
Cannot be lost or stolen
The physical card has the tendency to be lost and stolen easily from your wallet or purse. People have to block their cards in such cases. When you go for a virtual copy of the card, you avoid the chances of losing the card. All the important details of the card are on your mobile device and can be accessed only by you.
As it is a soft copy in the cloud space, it cannot be lost. These days, banking institutions are issuing physical cards, but they are also offering Virtual card APIs to customers so that their financial information stays with them always. The use of Virtual card APIs also protects you from any kind of fraud because there are multiple protective walls and layers around your card information.
These days, many digital services have turned into subscription-based services for which you need recurring payments. With the use of Virtual card APIs, it is easier to handle multiple subscriptions with easy management of auto payments. Even if you have a physical card, its API extension is often linked with multiple applications and providers so that your subscription fees can go out. This reduces the payment hassle and ensures seamless service for you.
There are also some disadvantages to the use of Virtual card APIs that the modern customer should be aware of. For example, the virtual card cannot be used like physical cards and in scenarios where you need a physical card. For example, some stores, even today, only accept physical cards that you need to swipe. If you are carrying a simple virtual card, it could lead to payment problems.
Another obstacle you may face is the withdrawal of cash. Even today, in ATM machines, you need a physical card to withdraw money from the machines. The lack of a physical card and dependence on virtual card APIs can reduce your accessibility to hard cash. Therefore, it is best to carry around one physical debit or credit card and hold your virtual card at all times on your phone or tablet.
Fintech companies are partnering up with banks and NBFCs to offer easy payment and finance solutions like virtual cards to customers. Customers can automate and streamline many financial functions with the help of a virtual card. However, for ease, the customer should have multiple payment options available.
FidyPay is a team of professionals keen on helping Bharat adopt digitalization from the core. Therefore, we are implementing our services to help the business sector evolve first. As a result, the end consumers will gradually be inclined towards using the perks of digitalization. With Prepaid Cards, we are just one step ahead in fulfilling that quest. Get in touch with us at 6232082424 to know more about our Prepaid Cards services.