Are virtual credit cards in India more secure than physical cards? Find out

As India goes digital in payments, virtual credit cards are being touted as a secure and convenient substitute for the trustworthy much used older cards. These credit cards make the process of payment more seamless and easier for users and ensure that the entire transaction remains secure, digital and swift. Still, are they actually safer? Let's find out:

What are virtual credit cards?

Virtual credit cards are electronic copies of real credit cards, providing one-time, temporary 16-digit card numbers that are associated with your base card account. Virtual cards exist only virtually and are embedded with a CVV and expiration date.

Virtual cards can't be stolen or lost like actual cards, so they're more secure to use on the internet. These cards also keep sensitive account data private, placing your identity in fewer risks of theft or misuse when shopping online.

How do they enhance security?

Virtual cards also have several layers of security to render them even more superior to physical-form cards:

• Masked account information: Your true card number is never revealed in a transaction, reducing exposure opportunities. It protects immensely against data loss and breach of crucial information.
• Personalizable features: Consumers can restrict what can be spent, put fund limits, restrict to spend on specific traders, or virtual single use cards. All the above features provide consumers with control of their funds and prevent unauthorised spends.
• Ease of deactivation: In the event of compromise, a virtual card can be easily turned off without affecting the underlying card account, unlike physical cards that need a little lengthy process of deactivation in comparison to virtual cards.

Still, it is important to remember that virtual cards are not entirely fraud-proof even after all these advantages. Active virtual card numbers can be abused by hackers if they gain access. Real-time transaction monitoring, following your credit utilisation ratio and reporting of fraudulent transactions still are needed.

Restrictions and use in India

Though the virtual cards are generally considered safe, the facility can only be used to make online payments and cannot be used to buy anything offline. Many of the Indian banks still don't have this facility, which is a challenge currently as it is an ever evolving field.

Further, some of the larger banking groups like: HDFC Bank, Kotak Bank, Axis Bank, Standard Chartered and several others are now offering seamless applications for the virtual cards with instant approval.

Now it is a given that virtual credit cards provide greater security for online purchasing and selling, still consumers are not fully safeguarded as rules and regulations are currently in development phase. Phishing and hacking remain a serious possible threat. This can even impact the credit score of an individual if not followed diligently. Therefore, you should carefully monitor your statements closely and report suspected fraud at once. Timely reporting in such cases is of immense importance.

Finally, as India grows through the ongoing digital revolution, virtual credit cards could well prove to be the answer to ensuring completely secure online transactions. Whether or not they are successful will depend on: advancement in technology, user education, awareness and consistent vigilance on managing security of these lending assets.

(Note: Using a credit card carries its own set of risks.)