A virtual credit card is a digital payment device that can have strictly limited usage parameters and is created through the random generation of a 16-digit number. This process, known as “tokenization," is a variation of how chip-bearing standard credit cards work. The chip generates a single-use number, or token, each time it is inserted into a reader. Chip cards are more secure than previous generations of cards because transactions can be made without the merchant ever having the user’s card number.
Similarly, virtual cards exist only in relation to actual credit card generator. The random token is also assigned a card verification value (CVV) code and an expiration date (often determined by the user), so that the virtual card can be used to make purchases online or over the phone.
When the card is used, the merchant only has the virtual number, but the charges post to the owner’s actual credit card account. Greater security is one clear advantage to virtual cards. And because most virtual cards also allow for built-in financial controls, improved tracking and accounting can be another advantage.
Edited by Mind, 02 December 2020 - 07:16 PM.
