Are virtual credit cards safer than physical cards amid rising fraud?
New Delhi, Mar 7, 2025
They generate temporary card numbers that expire after a single use, enhancing security for e-commerce
In a rapidly digitising financial landscape, Indian consumers are increasingly turning to virtual credit cards as a safer alternative to traditional plastic cards. This shift comes amid growing concerns over credit card fraud and data breaches that have affected thousands of cardholders across the country.
What are Virtual credit cards?
Virtual credit cards are digital versions of physical cards, designed specifically for online transactions. They generate temporary card numbers that expire after a single use, enhancing security for e-commerce. In contrast, physical credit cards provide a consistent and dependable payment method, widely accepted across various platforms. To safeguard users, banks and payment networks have integrated advanced security features into physical cards, such as EMV chip technology, PIN authentication, and real-time transaction alerts, which significantly reduce the risk of fraud and unauthorised access.
Issuance and activation
To obtain a virtual credit card, you must have either a standard credit card or a bank account with a provider that offers virtual card services. Many banks provide this feature, though the availability and benefits may differ. You can generate a virtual credit card via your bank’s online banking portal or mobile application.
Once issued, the virtual credit card is assigned a unique card number, CVV, and expiration date, similar to a physical card. However, this number is temporary and generally valid for a single transaction or a short duration, typically between 24 to 48 hours.
Are virtual credit cards more secure than physical cards?
“While physical cards are susceptible to risks like skimming, cardholders can minimise these threats by opting for contactless payments and using secure ATMs. Virtual cards, being entirely digital, eliminate the risk of skimming altogether since they are not physically swiped. However, physical cards offer greater versatility, enabling transactions at point-of-sale (POS) terminals, ATMs, and online platforms, making them indispensable for everyday use. Virtual cards excel in providing an additional layer of security for online shopping, while physical cards remain crucial for in-store purchases, travel, and emergency cash access,” said Adhil Shetty, CEO of Bankbazaar.com.
Points to keep in mind while using virtual credit cards
“When using virtual credit cards, there are a few things to keep in mind. First, though they have improved security, including spending limits and the option of deactivating them at will, they aren't completely fraud-proof. Consumers need to be careful and keep an eye on their transactions regularly. Second, virtual cards are meant to be used online and are not accepted for in-store use, which could make them less useful for some consumers. Users must remain aware of potential threats, including phishing attacks, and report any suspicious activity immediately,” said Rajesh Katoch, CEO, EZ Capital.
[The Business Standard]
