Bank Smart. Buy online, pay virtually

Looking to shop online but wary of sharing your card details in cyberspace? You are not alone.

With online fraud on the rise, many shoppers hesitate to use plastic money for payments over the web. This is despite the RBI making such transactions more secure by insisting on two-factor authentication for most card payments.

Thankfully, for the wary, there’s a neat alternative — virtual cards. These cards let you make online payments without disclosing any of your physical card details and, in some cases, without even possessing a physical card.

A virtual card has only electronic attributes, no physical presence. So, it is essentially an electronic card. But like a physical card, it too has a 16-digit number, expiry date and a three-digit CVV number — details essential to make an online payment. These details, different from those on the physical card that you own, are visible online on the bank’s portal, once you have generated the virtual card.

It’s quite simple to generate a virtual card — you can do it online in quick time from your bank or card account, after a one-time registration and authentication using a security code sent by the bank. Some banks such as SBI and Kotak Mahindra Bank let you generate a virtual card by debiting your bank account or blocking an amount to be debited after card usage. So, here, you don’t even need a physical card to create a virtual one.

Others such as Axis Bank and HDFC Bank let you generate a virtual card using your physical credit card (up to the credit limit available) or debit card (subject to your bank account having sufficient balance).

You can generate more than one virtual card at a time if you have the required balance in your bank account or physical credit card.

You can block your virtual card too if you smell something fishy. And you have the flexibility to pay as per the billing cycle of the physical credit card.

A virtual card provides enhanced safety and flexibility in online payments. It is a single transaction card, that is, it can be used for making only one payment. So, even if a fraudster gets hold of your virtual card details after that, it will be of little use.

Besides, a virtual card has a short life — it’s valid for just 24-48 hours or till the transaction is complete, whichever is earlier.

Any unused amount on the card is credited back to the bank account or the physical card which was used to create the virtual card. Ergo: the risk of misuse is minimal.

The card can be created for an amount of your choice, ranging from ₹100 to ₹50,000, depending on the bank and on how much you need to pay.

It’s a good idea to create the virtual card just prior to the online payment, once you know how much you have to pay.

This way, you don’t have to wait for the unused amount to be returned. A virtual card can be used for all online transactions, similar to a regular physical card. The best part is all this comes for free. Banks do not charge anything for the transaction. What’s not to like?

Well, some pinpricks do exist. One, not too many banks offer virtual cards. Only a few such as the ones mentioned above do. So, to obtain a virtual card, you need to have a banking or card relationship with the banks that provide it.

Next, virtual cards can be used only for online payments and not for transactions at physical stores.

Besides, even for online payments, using a virtual card is not a good idea if you may have to show the physical card later.

For instance, if you book an air or movie ticket online using your card, you may be asked to show the card at the airport or cinema hall as proof of your identity.

You will have nothing to show if you use a virtual card. The single transaction feature may be a strong security feature, but could be cumbersome for those who make multiple online payments.

ICICI Bank’s virtual credit cards did allow multiple transactions, but the bank stopped issuing them a couple of years ago.

Also, most virtual cards can be used only on websites that accept Visa cards. So, if the portal accepts only a non-Visa card, say Mastercard, your virtual card may not come in handy. Finally, virtual cards may not fetch you the reward points that their physical counterparts do.