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What is a Virtual Card | Fintech explained by SimpliFi

Dubai, UAE - December 09, 2022

A Virtual Card is a payment card that exists solely in electronic form. It consists of a unique, randomly- generated 16-digit number and contains the exact card details as their physical counterparts: expiration date and CVV code. A virtual card mimics the function of a physical card to be used anywhere credit/debit cards are accepted.

How Do Virtual Cards Work?

Although commonly associated with online payments, virtual cards can be used to pay for any purchase – online or offline. When using a virtual card to pay your suppliers, customers, or workers, cards can be used the same way physical cards are used at a point-of-sale terminal or entered online.

Virtual cards can be either disposable (one-time use) or multiple-use.

Virtual credit or debit cards can be restricted to a single-use – which is referred to as disposable virtual cards. In some cases, virtual card numbers are generated for specific purchases with predefined amounts and frequency of use. Once generated, cards can be revoked as soon as a transaction is complete.

For B2B payments, you can set up a virtual card for every vendor or supplier. A virtual card number can be assigned exclusively to one supplier and turned off once a purchase is complete.

On the other hand, multiple-use cards are assigned with an expiration date and can be reused until the date is reached. Multiple-use cards can be used for subscription services or any other type of recurring payment.

Combating Fraud With Virtual Cards – Using Modern Card Issuing

With more companies, like yours, moving their services into the digital realm, fraudsters are figuring out new ways to take advantage of the world of digital payments. No matter what business or industry you’re in, it’s time to give payment security some serious thought with cyber fraud on the rise.

Virtual cards offer an ideal way to keep your business accounts secure and cybercriminals out of your wallet. These cards are becoming increasingly common among consumers, and businesses are now catching up.

In 2025, the volume of virtual card transactions will rise to $5 trillion from $1.6 trillion in 2020 – Juniper Research

Virtual cards enable secure online transactions by allowing you to take preemptive measures to combat fraud. Card programs created through modern card issuing providers like SimpliFi provide fine-grained controls on when, where, and how payments can be made.

Just like any card program created on a modern card issuing platform, spend controls can restrict the use of virtual cards. Cards can be created for a one-time payment for a specific amount, time, place, or merchant category where the card is accepted. These controls are verified as transactions take place to prevent attempts of card misuse.

SimpliFi's modern card issuing APIs can help you design virtual card programs in ways that meet your specific business needs.

Explore how SimpliFi can enable virtual card programs for your different business use cases.

Want to find out more? Get in touch with our team today!