Spending on virtual payment cards has increased dramatically over the past few years. While virtual cards for businesses have accounted for three-fourths of the market’s revenue growth, virtual cards for consumers have witnessed the fastest annual growth rate. What’s the reason behind the expansion?
The increasing amount of online and electronic transactions worldwide has propelled a surge of virtual cards. Like traditional credit or debit cards, virtual cards offer the ease of being able to pay for almost anything online, from consumer products and subscriptions to utility bills. This shift to virtual card services is due in part to convenience and in part, to the enhanced security protections virtual cards can offer. With many consumers now aware of the risks associated with sharing their private data, more and more consumers are opting for virtual cards for their online shopping needs.
Recognizing the need to protect consumers’ data online, Privacy launched its virtual card solution in 2016, which prioritizes the safety of online payments by protecting users’ credit card and debit card information.
If you're new to Privacy and the world of virtual payments, stick around for a preview of the virtual card landscape, an introduction to Privacy, and a tutorial on how Privacy works.
In this virtual card guide, we answer the following questions:
- What are virtual cards?
- How can you get a virtual card online?
- Why should you use Privacy for your masked cards?
- How can you get started using Privacy?
What are virtual cards?
A virtual card is a randomly generated payment card number that can be used to make purchases online in place of using a traditional credit or debit card. Each virtual card comes with a unique 16-digit card number, CVV, and expiration date.
Connected directly to your bank account or debit card, virtual cards offer the same ease and convenience as debit cards, but may also have built-in security features that keep consumers safe online.
By generating unique card numbers, virtual cards act as a buffer between your personal bank information and the merchant you’re transacting with. In the case of a data breach when sensitive financial information is compromised, virtual cards can alleviate much of the frustration and pain that comes with notifying your bank, waiting for replacement cards, recovering lost funds, and mitigating identity theft.
As the number of online transactions continues to grow, so too does the volume spent on virtual cards. Looking ahead, the global virtual cards market is expected to grow to $603 billion in revenue by 2028!
How can you get a virtual card online?
You may be wondering how to get a virtual card online. To start, it’s important to understand the two main types of virtual card services in the space: virtual cards for consumers and virtual cards for businesses. While the focus of this guide is on virtual cards for consumers, virtual cards can also be leveraged by developers and other business customers to help power their operations.
Virtual Card Services for Consumers
Consumer virtual cards can be instantly created to use for online purchases and are smart alternatives to physical payment cards because of their security and convenience. Today, there are a few versions of virtual card services to choose from.
Many large banks offer their own proprietary virtual card services, frequently attached to their credit cards. These options are easily accessible if you’re already a bank customer or have the associated credit card; however, if you don’t have the specific card product or account, you can’t leverage the virtual card service. Also, depending on the bank’s offering, there may be an additional fee associated with creating and using virtual cards.
Outside of large banks, specialized virtual card companies, like Privacy, offer their own virtual card programs to consumers. A key benefit to choosing a specialized virtual card service over one that’s tied to a bank is convenience. Privacy is bank agnostic, so you can directly link your existing bank information to your Privacy account, which means you don’t need to apply for an entirely new bank program just to issue a virtual card. Additionally, specialized virtual card companies may provide their own technology that makes creating and managing virtual cards easier and more accessible. Privacy’s mobile app allows you to quickly and easily create, pause, close, manage and monitor all of your virtual cards and transactions while you’re on the go. And with Privacy’s browser extension, you can auto-fill card information at checkout, whereas other services may require consumers to copy and paste numbers or toggle between various apps to complete a simple transaction. We’ll go over more features that Privacy virtual cards offer later on in this guide.
At Privacy, we take a layered approach to security. Sensitive data, including your debit card or banking information, is encrypted and stored on single-tenant hardware in private networks. Additionally, Privacy undergoes annual audits for PCI compliance, a set of standards in place to enhance global payment account data security. Ensuring the security of your data is at the core of everything we do here at Privacy, so you can rest assured that we do everything we can to keep your personal information and data private from merchants.
Virtual Card Services for Businesses
Businesses have recognized the benefits of virtual cards, and many are looking to issue virtual cards to help solve business gaps. Virtual cards can help automate and improve cash management within organizations or with outside vendors. Additionally, virtual cards can help businesses minimize overall transaction processing costs and even open new revenue streams through interchange.
Card issuing companies, like our parent company Lithic, help businesses design virtual card programs for a variety of use cases. Lithic has established bank sponsorships and program management capabilities in place to simplify the complicated aspects of virtual card issuance.
For example, businesses that deal with foreign exchange rates or complex payment flows, like online travel agencies (OTA’s), have begun implementing virtual cards to simplify and scale payments. Visit the Lithic blog for a deep dive into OTA’s, the challenges they face, and how virtual cards have helped tackle inefficiencies within the double-loop payment process.
Whether you're a startup or an established business, card issuing can offer a scalable solution for companies to expand their product ideas or modernize their payment infrastructure.
Why should you use Privacy for your masked cards?
Many consumers think of virtual cards as burner cards that can be used for quick, one-time purchases. However, Privacy Cards offer more enhanced security features and unlock more use cases than a simple burner card. Our virtual cards are not only advantageous for secure payments, but also for individual card management, budgeting, and convenience. Here are some unique benefits that Privacy offers:
Cards that can only be used at designated merchants
With Privacy, you have the option to create a Merchant-Locked card, which “locks” to the first merchant where it’s used. These types of cards can be used for recurring purchases or with merchants at which you commonly shop. In the case of a data breach, if a bad actor gets a hold of your card information, that card information cannot be used at any other merchant. If the fraudster attempts to make transactions at other merchants or vendors, those transactions will automatically be declined and you’ll be notified immediately.
Cards that automatically close after a single transaction
Privacy’s Single-Use Cards can be used with online merchants that you’re only shopping with once or with new vendors whose safety and credibility you may be unsure of. After the first transaction is authorized, the Single-Use Card closes automatically, so you don’t need to worry about any fraudulent purchases. If a malicious actor gets ahold of and tries to use a Single-Use card number, the transaction will automatically be declined because the virtual card has already been closed.
Cards with spending limits that prevent overcharging and unwarranted fees
If you’re looking to track or limit your own spending with certain merchants, you can do so easily with Privacy Virtual Cards. Set transaction limits for monthly or reoccurring subscriptions. For example, if your streaming service is $10/month, you can set a monthly spend limit of $10 on the Privacy Card associated with this merchant. Any overcharges or unexpected fees over the spending limit will automatically be declined and you’ll be notified immediately.
Cards that can be paused or closed any time you want
Privacy Virtual Cards can also be paused temporarily or closed at the user's discretion. This feature can be helpful if you want to immediately cancel a subscription, but don’t want to spend hours on the phone with customer service before the next billing cycle. To prevent future charges on the Privacy Virtual Card used for a subscription, simply close the card. Merchants may separately ask you to go through a cancellation process.
Cards that don’t impact credit scores or accrue fees
Privacy does not pull credit reports as part of the application process or report any account activity to credit bureaus. Thus, creating, closing, and using Privacy Cards will not have any impact on your credit score.
Finally, Privacy’s core product is free to use because, like other card companies, Privacy makes money by collecting transaction fees from merchants.
How can you get started using Privacy? Create virtual cards.
Interested in getting started? Use this step-by-step guide that explains how to create and use your first Privacy Virtual Card.
1. Create your Account
Go to the Privacy homepage and click ‘Sign Up’ on the top right. To sign up, you will first need to enter an account email address and create a password. Privacy Virtual Cards are currently available to US residents ages 18 and older.
2. Create your first Privacy Virtual Card
Once you verify your email address you’ll be redirected to your dashboard to create your very first Privacy Card! Give your card a nickname, such as a merchant name, to help keep your cards organized.
You have the option to set a spending limit on this card if you have an anticipated budget in mind, but you can revisit these settings and customize the card later.
3. Complete your Profile
Click ‘Finish Signing Up’ to activate the card. In this step, you will specify whether your Privacy Account will be for personal or business use. Next, you will be prompted to fill in additional information that Privacy uses to verify your profile.
It may seem strange to sign up for a service called "Privacy" and have to share personal information. Because we offer a financial service - virtual cards - we have to follow certain guidelines and ensure we meet compliance standards before we can allow anyone to make purchases using these cards. These regulations require us to gather details such as address, social security number, and phone number to successfully authenticate your account. The personal information required, known as KYC (Know Your Customer), is a mandatory risk-based bank procedure conducted before our customers open an account in order to protect against fraud and money laundering. We do this to ensure our service can remain the safest way to pay online for everyone, and we will never share or sell these details to any other source.
Once we have verified your information, you can proceed to connect a funding source to your account.
4. Funding your Account
To start using Privacy Cards, you must securely connect your Privacy Account to a funding source (e.g., your bank account). Each time you make a transaction, funds are debited from that connected funding source.
To connect your bank account: click the blue ‘Connect & Enroll’. Then you will be prompted to locate your bank. Follow the directions on the modal to complete enrollment.
5. Make your first purchase with Privacy
Once your funding source has been connected, terms have been accepted, and your account has been verified, your first card is ready for immediate use! To make your first purchase with Privacy, fill in the virtual card’s number, expiration, and CVV into the checkout fields when you’re ready to make your purchase.
The funds will then be debited from your connected funding source, which you can track through your Privacy dashboard.
Pro tip: Save time at checkout by downloading Privacy’s browser extension that will autofill card numbers into the checkout fields with just a click.
That’s it! You’re ready to start paying with Privacy.
Keep your payments secure with Privacy Virtual Cards
Privacy’s Virtual Cards offer the same functionality as traditional credit and debit cards while delivering innovative features that improve convenience and security for our customers. Now that we reviewed why Privacy Cards are the best choice for your masked cards, sign up today and make Privacy the default option for secure online payments.
Have questions on how to get started with Privacy? Drop us a note at email@example.com and we’d be happy to help.