2 min read
As technology progresses, both businesses and customers find themselves with a wider range of payment methods available to them. This is, on the whole, a good thing since it allows people to choose the most convenient method for them and make payments in an easy, secure way. On the other hand, the amount of options can be overwhelming and difficult to understand.
One popular new system is the virtual card payment system, which is a modern payment method that aims to save time and reduce the possibility of errors. But how do virtual card payments work, exactly? Keep reading to find out more about virtual card payment processing and how you can make the most of it.
What are virtual card payments?
Virtual card payments use temporary credit card numbers to make an online payment. They are designed to protect your real card details from fraudsters.
How do virtual credit card payments work?
Well, you’ll have to check whether your credit card issuer has a virtual card payment system available if you want to pay in this way. If they do, then you will be able to request the number through your online account, and you’ll then be provided with a randomly generated card number, expiration date and security code.
Once you’ve been given these details, you can go ahead and shop online and simply enter them when you get to the checkout. Any transactions will appear on your credit card statement, just like when you use your actual card.
Virtual credit cards put you in charge. You can choose the currency that you’d like to pay in, as well as set spending limits. In addition, you can also specify the merchant types where the card can be used.
Virtual payment cards and security
One of the main reasons that people choose to use virtual credit cards is to protect their identity when sharing sensitive financial data online. They’re a great way to ensure secure online payments, since virtual payment cards can be easily cancelled without affecting the rest of your account.
In some cases, virtual payment cards are only designed for one use, so if a fraudster is able to access these details, then they will be unable to use them.
However, despite being a secure option, they should still be used with care. Make sure that any payment platform you use is offering the right encryption technology to protect your details, since it is still possible to fall victim to fraud with a virtual credit card.
Other benefits of virtual payment cards
As well as an increased level of security, there are a number of other benefits that lead people to use virtual payment cards. These include:
They are easy to create and use, meaning that you can get set up in next to no time.
They’re really useful for businesses with several staff members that have to make payments. Rather than everyone having to fight over the company credit card, several different virtual payment cards can be issued to staff members to allow them to pay independently.
Related to the previous point, if each staff member has their own virtual credit card, then you can easily keep track of who is making payments for what, leading to better accountability within the business.
Reduced transaction processing. Since many virtual payment cards are only used once and for a specified amount, the payment processing is much faster. This also means lower transaction fees, saving you money.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.