29 October 2020

Virtual Cards: Protection, Prevention and Payments

by Rachelle Lee

Do you make regular online payments? Do you manage your company’s insurance and travel and deal with frequent telephone and online orders? It is easy: In less than a few minutes, the transaction is confirmed. You have done it before, several times and nothing has gone awry. But you would feel safer had you used a virtual credit card or a corporate prepaid card.

Online payments and transactions are becoming a norm for businesses of all sizes. The convenience and speed of purchasing anything from anywhere pose spectacular benefits in our modern times. How do you protect your bank account information from data breaches? What security measures can you take to protect your personal information?

The reality is online and telephone orders do carry more risk of a data breach than in-store payments. Despite the stringent security measures that have been put in place, identity theft has been on the rise. Incidents such as data breaches often compromise consumer information. According to the Identity Theft Resource Center (ITRC), three data breaches happen every day. Over 4 million records have already been lost in breaches, as of March 2020.

The number of data breaches and credit card thefts exists at an all-time high. In Singapore alone, nearly 27% of all crimes committed are related to cybercrime such as identity theft. Additionally, police had reports of more than 10,000 cases of data breaches in 2019. And with a greater reliance on the internet in the future, experts expect that cybercrime will continue to rise.

Here is what you will learn in this article

Spoiler: With the latest advances in financial technology, virtual cards may be the all-in-one solution to mitigate the issue of data breaches.

What to do in case of a data breach

Have you been a victim of a data breach? Has a company you have an account with or do business with has been found its data hacked? Here is what you should do:

  1. Contact your bank or card-issuing company and immediately block your card. It is worthwhile to address this promptly as transaction disputes must be made within 30 days of the transaction date.
  2. Contact the merchant directly and inform them of the unauthorized transaction. Request that they withhold the purchase and arrange a refund to your card. Maybe the merchant does not agree to a refund but is agreeable to a dispute claims resolution process. In that case you should obtain a letter or email as evidence of the merchant’s agreement.
  3. Check for other unrecognized transactions and list the details of the transaction dispute. This should include the date, time, location, your card details and the reasons for this transaction dispute. Do not wait to put this together as the transaction dispute needs to be filed within 30 days of the transaction being made.
  4. Change your password used with the company where your records were breached and at any other company where you use the same password. You just never know the extent of the data was released or hacked in the course of a breach.

Credit card safety tips

Making any form of online or telephone payment carries risk of identity theft. The goal then is to minimize the chances of that happening as much as possible. Here are some tips we have to protect your credit card and banking information:

  1. Only make payments with trusted sites/people
  2. Create a strong password and PIN
  3. Guard your CVV/CVC number
  4. Use virtual cards

Only make payments with trusted sites/people

You want to use reliable sites when shopping or performing any form of online payment. Only use websites from established institutions or websites with a good reputation to avoid identity theft. Additionally, trusted sites generally have good security protection in place

If you’re making a payment over the phone, double-check that the number you’re calling is real. No one should ever ask for the PIN or your personal identification information either.

Create a strong password and PIN

Creating a strong password to access your bank account will prevent hackers from logging into your bank account, stealing information or making illicit transactions. Avoid using obvious passwords and PIN such as your birthday.

While it may be tempting, also avoid using the same password for all your accounts. If hackers get their hands on one password, they will have access to all of your accounts as well.

Guard your CVV/CVC number

You should not be expected to provide your CVV/CVC number. All the data required for a telephone order is your credit card number and its expiry date. Never give your 3D Secure password or any other password. Keep your feelers peeled for anyone asking you for such information. Choose a trusted company that explains the steps of the payment procedure for your telephone order. They will only ask for the relevant credit card details.

Use virtual cards

If you’re looking for more ways to avoid identity theft, using virtual cards may add a greater level of security to your personal information. Virtual cards grant better protection to avoid identity theft in cases of fraudulent merchants or data breaches.

Recommended reading: 9 Ways to Protect Your Credit Card Information

What is a virtual credit card

The latest in financial security led to the creation of virtual cards. A virtual credit card is a unique card number linked to your bank account. Think of it as a substitute for your credit card when making payments online.

A virtual credit card works like a physical card, but with more enhanced security features. Virtual cards consist of only the card number, expiration date, and security code. Virtual cards do not have physical characteristics such as a mag stripe or an EMV chip. Therefore, you cannot use these cards in physical stores.

The benefits of using virtual cards

Payment experts project that virtual cards will be responsible for more than $350 billion worth of payments online in 2022. And it is no surprise when you understand the benefits of virtual cards.

Here is why virtual credit cards are the preferred payment mode for recurring online payments, such as ongoing subscriptions and digital ads payments:

  1. Better security features
  2. Easy controls
  3. Convenience

Better security features

Expense Management Software - Easy Approval on Smartphone

As mentioned before, virtual cards are linked to the same account as your main credit or debit card. However, they do not require you to share your personal banking information to make a purchase. The technology behind it encrypts your real account number when you use the virtual card.

This limits the risk of having your information compromised when a data breach happens. Additionally, no one can ever steal your virtual credit card since you don’t have a physical copy of it.

Virtual cards provide the same benefits as any credit card. As long as you have internet or mobile access, you can use virtual cards for any online payment.

Easy controls

Virtual cards allow you to set a limit on how much you can spend with it. This makes it more difficult for someone to abuse the card if someone had access to your virtual card. Additionally, you can also set an expiry date or make the card valid for a single payment to take your security one step further.

Convenience

In the chance that someone does steal your virtual credit card information, you can simply freeze or close the card at any time. This doesn’t require changing your entire banking information, such as card numbers, security information and pins. Some providers, such as Volve, even provide the benefit of owning and utilizing several virtual cards at the same time.

Other benefits of a virtual card include:

  • No waiting time for a virtual card to be issued;
  • It offers anonymity and is perfect for those who do not want to provide information about their main physical card;
  • It is a convenient payment option for online purchases, without having to get your wallet out to retrieve your credit card details;
  • You can use a virtual credit card to pay on any merchant websites, globally as long as you have internet access.

The limitations of virtual cards

While virtual cards have many advantages to offer, they come with two setbacks:

  1. You can only use virtual cards for online payments whereas for in-store purchases, you still need to use a physical banking card to purchase.
  2. Data breaches and identity thefts still happen and that is out of your control. As such, someone can still steal the card number on your virtual card. However, you can simply cancel your virtual card without compromising all of your personal information. We recommend tracking your credit card/virtual card purchases to see if someone is abusing your card.

How businesses can reap the benefits of virtual corporate prepaid cards

Overall, virtual corporate debit cards offer a highly secure and simple online payment solution to corporations. From the benefits listed above, you can see why virtual cards minimize the security concerns over your banking information. Once in use, you can make online payments knowing you have the added reassurance from your virtual card.

An increasing number of financial institutions now offer corporate virtual cards. Many businesses across a variety of industries can benefit from virtual cards. Not only do you protect your assets from data breaches, but you also issue a streamlined and controlled spending system across your company.

As you are reviewing operational efficiencies, it might be useful to explore a virtual card that comes with a cloud-based expense management solution. This streamlines payment through to finance reconciliation while eliminating any need for manual entry.

Recommended reading: How To Choose Your Expense Management Software

Expense Management iOS Mobile App

Integration with expense management solutions

Volve offers an improved expense management solution experience, with the same safety standards that is available on all Visa products. Volve integrates into back-office systems and supports reconciliation and cash flow forecasting processes with real-time data.

The Volve virtual card is a Visa corporate prepaid card. It allows you to adjust the spending limits and make free top-ups as often as you like. Employees can have access to several Volve virtual cards that are assigned to different categories of use. Each virtual card features its own unique card details and can be terminated or removed at any time from within the platform. You empower employees, but remain in full control of the company spend: This has been well-received by managers of remote teams.

For Volve virtual cards that are assigned for shared usage: Users can view available balances and activity at any time. Budget owners are able to immediately address activities that are not in line with guidelines and take the corrective action required.

Regardless of the size of your business, virtual cards can help simplify and automate operations, reducing the time employees spend on manual data processes. Instead of spending hours reconciling receipts and employee expenses, employees have more time to focus on value-added areas of the business. This can bring in additional revenue and provide a competitive advantage.

Take advantage of the benefits of automating your expense management solution with an all-in-one spend solution from Volve. Your employees and your bottom-line will feel the difference within a short period after implementation.

Recommended reading: How Better Expense Management Drives Better Decisions

About Volve

Volve’s corporate card comes with an automated expense management solution and reporting tool. This enables all functions of business to capture productivity growth potential from time-cost reductions, greater accuracy, increased visibility and control.

From sales to human resources to finance operations, management can look forward to shifting resources away from repetitive manual practices. Instead, they can realize strategic goals that create more value and deliver higher returns.

Experience how one single solution can improve accountability, accuracy and efficiency!

Rachelle Lee
Growth Hacker
Prior to scaling next-generation financial services, Rachelle lived out of a suitcase across Asia working on a 3-year research plan gathering customer insights and synthesising consumer decision journeys for global creative agencies, engaging with businesses on growth marketing, brand storytelling and customer engagement models for future business growth. She still drinks too much coffee, doing meaningful work with trailblazers and innovators to bring greater literacy to spend management solutions.

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