Identity theft continues to plague credit card holders, and purchasing data increasingly becomes valuable tools for advertisers to target consumers. Virtual card numbers provide extra peace of mind, without compromising ability to make payments and earn rewards. They also provide compelling enhancements to individuals and businesses who need to make payments to merchants.
Virtual card numbers can be issued immediately and revoked or customized after use. Fraud is reduced with transaction-specific controls that prevent misuse attempts with the virtual card number. For commercial card program managers especially, costs are reduced with realized operational efficiencies.
What is a virtual card number?
Virtual card numbers are very similar to physical credit or charge cards. Virtual card numbers have a 16-digit number, which is generated and assigned for use by an individual user. Uniquely, virtual card numbers can be used immediately, providing just-in-time funding that could help to better manage an individual or business’ cash flow. As with other credit or charge card products, virtual card numbers also provide spending controls, reporting tools and fraud protections that all help to manage expenses, track projects and prevent misuse.
For consumers, virtual card numbers provide privacy so purchases are more difficult to be tracked and targeted by advertisers, while protecting sensitive banking information, including the real debit, credit or charge card account number, expiration date and security code.
For businesses, virtual card numbers greatly help with implementation, providing immediate issuance and funds availability, while managing cash flow, enhanced payables and stronger reporting.
How can a consumer get a virtual card number?
For consumers, virtual card numbers can be generated with existing credit card accounts. If you have a credit card, you might have access to a virtual card number, so log into your online account and search for “Virtual Card Number” or “Virtual Account Number”.
Single- or multi-use virtual card numbers can be used to prevent fraud. Citi Virtual Account Numbers, Wells Fargo Digital Wallet, and Click To Pay from Visa, MasterCard and American Express are examples of single- or multi-use virtual card numbers. Single-use cards can be used for a one-time purchase with an online merchant or to withdraw cash at an ATM. Multi-use cards can be used as a dedicated payment method to a frequent vendor or merchant with whom you do business, enabling better experience tracking and enhanced privacy.
With Citi, for example, the VIrtual Account Number portal will launch, enabling you to create your virtual card number. First, choose which Citi account for which you want to create the virtual card number. Second, define any advanced settings, including the expiration date and spending limit of the virtual card number. Third, create the virtual card number and delete it when it is no longer needed.
How do virtual card numbers differ from smartphone payment apps?
Apple, Google and Samsung offer payment apps that most merchants can accept for online purchases or in-store use with NFC (near field communications) or MST (magnetic secure transmission). With these smartphone payment apps, a payment token replaces the primary account number (PAN). The payment token is not the real debit, credit or charge card number, it is another number that can be used for purchases.
Tokenization technology is different from virtual account numbers, but both keep your sensitive card number information private so that it cannot be duplicated and reused by a third party for fraudulent purposes. Reporting and spending controls can be available for both tokenization and virtual card number payments, but their specific features may differ between individual card issuers and smartphone payment app.
Virtual card numbers are generally platform agnostic. They can be used to make purchases with nearly any merchant who accepts online payments, most payment processors or most smartphone payment apps. A consumer could create unique Citi Virtual Account Numbers for each of the smartphone payment apps frequently used to track app payments made from each device in a family, for example.
Just like dedicating specific physical debit, credit or charge cards for a single purpose, virtual card numbers could be dedicated to separate devices or family members. And instead of physically taking the card from a child when he or she is grounded, a parent could disable or lower the spending limit of a virtual card number from the bank or card account portal. This is just one of many examples that demonstrate the usefulness that virtual account numbers present for a consumer’s daily use.
Why should consumers use a virtual card number?
Virtual card numbers are excellent tools for any consumer to securely and easily shop online while protecting their valuable account information. Consumers with debit, credit or charge accounts that feature virtual card numbers do not need to apply for a new credit account or incur any new credit inquiry.
These virtual card numbers are managed by your card issuer, so you can easily create new virtual card numbers with any expiration date or spending limit suitable for its use. While there are a few extra steps to generate a virtual card number, your real account number is protected and gives additional peace of mind, as a bank or card issuer may also provide additional fraud protections to protect consumers from fraudulent purchases.
How can virtual card numbers be issued for businesses and corporations?
Forbes Advisor reviews how corporate credit cards work, and this piece reviews the benefits “P-Card” programs offer to middle-market businesses and large corporations, including optimized spending controls, an enhanced payables process and long-term value. Corporate credit cards serve as a useful tool for building program-level and individual account controls to oversee employee purchases. Online program and account management tools serve as a central hub for enhancing a company’s payables process with a corporate credit card.
Large banking institutions that offer corporate credit card programs can be engaged with to analyze a company’s payables history to identify how a corporate credit card can reduce fraud, control large project expenses and understand the types of merchants a company engages with the most. A company should engage with a commercial banking relationship manager, treasury management specialist or dedicated bank client service professional to learn more about the offerings their institution can make to a company.
As part of a corporate credit card program, virtual card numbers can be an enhanced feature that a commercial banking partner can offer as part of a “P-Card” implementation program. Virtual card numbers can be issued instantly, in multiples, and for single- or multi-use. Instant virtual card numbers are issued for an installment loan to borrowers or for onboarding a gig worker.
Multiple virtual card numbers could be issued to help track fulfillment of a single order shipped to multiple fulfillment partners by e-commerce merchants; as an example, an online seller could create multiple virtual card numbers to fulfill each order that is shipped to different addresses, and if one shipment isn’t fulfilled, a single virtual card number could be refunded or resent without affecting other fulfillments.
Are virtual card numbers secure?
Yes, most virtual card number issuers secure sensitive card data that are encrypted for transmission virtually. Card program administrators and card issuers can activate cards and cardholders can set any PINs (personal identification numbers) that might be required to make purchases. The issuer maintains oversight of encrypted transmission of sensitive card data, including primary account number (PAN), PIN, expiration date, and CVV (card verification value).
Virtual card numbers are compliant with PCI DSS (payment card industry data security standards) which means that transactions can be made with confidence for both the virtual card number owner, the card program manager or card issuer, and the merchant receiving the funds.
Why are virtual card numbers important?
As privacy and security grow more important in society and as business needs become more complex, virtual card numbers present a unique opportunity to minimize fraud while enhancing spending controls and reporting tools. Consumers can minimize the need to make fraud charge claims with their banks and card issuers by using virtual card numbers, while also making it easier for younger family members to transact more securely and privately online and at stores. Businesses can manage cash flow faster and make payments more available with virtual card numbers, reaching employees, business partners and vendors more quickly, compared to physical card products.
As digital payments become more prevalent, traditional payment cards that contain magstripes and chips will become more costly to operate with physical equipment and greater fraud incidence. Virtual card numbers are another tool that banks and card issuers can deploy to make payments faster and more secure.