Shop online without credit, debit card

If you are someone who is wary of shopping online given the increasing number of financial frauds on the Internet, there are other alternatives you can use. We explain the three alternatives through a conversation between two friends, Sid and Roy (two fictional characters created by Mint Money).

Sid: Wow, nice shirt. Where did you get it from?

Roy: I bought it online at Thestiffcollar.com. It took me just 5 minutes and the shirt reached me the very next day.

Sid: I seriously don’t understand how you can shop online when you know there are hundreds of Internet financial frauds happening every day.

Roy: I understand your concern. But it is possible to shop online and not get defrauded. Tell me your concern and I may be able to help you get over the fear of fraud.

Sid: I have a credit card with a credit limit of Rs 1 lakh. I am very regular with my repayments. If I go online and buy a shirt for Rs 850, I fear that I would expose the entire limit of Rs 1 lakh. Got it.

Roy: There are two solutions to your problem. One, you could get another card with a smaller credit limit, say, Rs 10,000-15,000. That way you would decrease the risk of exposing a high credit limit online. Two, you could try the alternatives to a credit card for online shopping.

Sid: Like the debit card, that’s equally bad.

Roy: No, I am talking about virtual cards, prepaid cards, e-wallets and the like.

Sid: I have no idea about these.

VIRTUAL CARDS

Roy: Let me first tell you about virtual cards. These cards take care of your security concerns since you don’t need to reveal your credit card details while shopping online.

Sid: Sounds interesting. Please explain how these cards work.

Roy: A virtual card can be generated by doing a one-time registration with your bank. The virtual card number is set up using your existing physical credit card. You get a unique login and password. Just specify the amount you want to spend with your virtual card. The card generated will have a new 16-digit number, CVV2 number and expiry date. You can use it like any credit or debit card for online shopping.

Sid: Tell me another thing, how long are virtual cards valid?

Roy: It is valid for 24-48 hours. And the unused amount is debited back to your card account. Also, it’s a free service. You can generate multiple number of cards in a day, but banks usually allow expenditure of Rs 100-50,000 per customer per day. One more thing: you can use a virtual card for a single transaction only.

Sid: Sounds good. I have an Axis Bank Ltd credit card, can I get this virtual card from them?

Roy: Sure. Axis Bank Ltd’s virtual card is called e-shop. HDFC Bank Ltd also has a card called net-safe. You can either use your credit or debit cards to activate the virtual card. Axis Bank and HDFC Bank are the only two larger banks that offer this service.

SCRATCH CARDS

Sid: What about those scratch cards you were talking about?

Roy: These are prepaid cash cards that can be used to make online payments. The card comes pre-loaded with funds. You will need to scratch the card, which reveals the card number and password. You can use this card number and password for online shopping and bill payments.

Sid: Where would I get these cards. And what’s the cost?

Roy: There are a number of companies like ITZ Cash Cards Ltd and Oxigen Services India Pvt. Ltd that have such cards. You can get the card delivered at your address for a small fee. The cards come in various denominations, usually in the range of Rs 50-10,000. Some of these cards are for one-time use only, others can be recharged.

Sid: What can be the cash card be used for?

Roy: You can use the card for mobile as well as online transactions. You can use to shop at websites that accept such cards as well as buy railway tickets, airline tickets and pay utility bills and the like.

Sid: Anything else I should know?

Roy: Yes, the validity will vary depending on the card provider. It can be anything between six months to a year or so. Also, you can check the card balance online using the company’s website or by calling a toll-free number.

Sid: What happens if I lose the card?

Roy: In that case, you will have to call the company’s call centre and block the card.

E-WALLETS

Sid: Now tell me about e-wallets?

Roy: An e-wallet is pretty similar to a virtual credit card. Here a e-wallet is generated and set up against your savings bank account. It also comes with a 24-48 hours’ validity and the unused amount is debited back to your savings account. It’s one of the best ways to shop online using Internet banking.

Sid: Is an e-wallet also a single transaction card? Is the spending limit up to Rs 50,000, right? And is it for free?

Roy: Yes, that’s right. You are a fast learner.

Things to Remember

Roy: By the way, just one last thing. Even when you use the above mentioned cards, you should be as careful as you would be using your own credit card.

Sid: Okay, looks like I am a convert. I think, I will look into buying things online now.

Roy: By the way, with the latest two-factor authentication, verified by Visa and Mastercard Securecode facility on regular credit and debit cards, they too are secured instruments. So enjoy the ease of online shopping.

bindisha.s@livemint.com