A virtual debit card is a an account that can be used like a debit card to make purchases online or by phone, but which has no physical card and so cannot be used for swiped transactions. The primary reason for the development of this payment solution has been to control fraudulent activities on the Internet. The virtual debit card is also useful for vendors who are willing to accept low payments for online transactions. These cards are also designed for college students and people who are self-employed or have a poor credit history.
Virtual Debit Card: Features
Although a virtual debit card is similar to a debit card in the fundamental aspects, there are several unique features of the former:
Most virtual debit cards do not have any kind of physical presence. Some virtual debit card providers issue physical cards to people but do not associate them with any PIN number. This ensures that they cannot be used to make physical point-of-sale purchases.
Charges on payments made by virtual debit cards are low. This is in contrast to the high transaction charges levied by online payment services, making it futile to use debit cards for small payments.
- A virtual debit card can be used to make purchases over the phone.
- They are a faster, convenient and efficient way of making payments.
Virtual Debit Card: Benefits
Virtual debit cards are popular because they are a better money management option and reduce the need to use credit cards or spend money from one’s checking account. Moreover, since it is not a physical card, one does not have to worry about losing it. Virtual debit card can be used to:
- Deposit money in accounts.
- Make offline purchases.
- Conduct transactions on the Internet.
- Transfer money from one account to another
- Withdraw money from accounts.
- Control fraudulent activities on the Internet.
- Limit bad credit, since a card owner can withdraw only that much cash as there is present in his/her account.
Problems Associated with the Virtual Debit Card
Virtual debit cards work in the same way as debit cards for online or phone-based purchases. They can’t be used for face-to-face purchases where a physical card needs to be swiped.
How to Apply for the Virtual Debit Card
Virtual debit cards are issued by financial institutions. A person wanting to acquire a virtual debit card can:
- Submit the requisition form to a financial institution, such as a bank.
- Upon approval of the application, banks send the information about the card via email. A cardholder is provided only a unique set of numbers and PIN code, which are to be used while making payments.