While the contactless credit or debit card was once seen as a modern marvel, we now take it for granted. Such is the ubiquity of cashless spending, in fact, that many of us don’t even bother to travel with paper cash on us anymore. Virtual payment cards are gaining more traction these days, even more so in a post-coronavirus environment where cash payments are few and far between for health reasons.
But one trend that appears to have been making inroads in recent years is not just contactless cards but virtual cards. These virtual prepaid cards are created online and given a random 16-digit number in the same manner as a credit or debit card. The difference here, however, is that the bank has no control over your funds. It’s completely up to you. But besides the sheer convenience, why else are virtual cards becoming more popular in this current climate?
No credit check
You can sign up for a virtual card and be up and away in minutes, thanks to the complete lack of credit check. Also, even if your credit rating is not what it used to be, you should still be able to apply for one with little effort.
Business or personal
While virtual cards are undeniably useful for individuals, they offer even more benefits for business users. For example, they can be issued to multiple team members, and bespoke spending limits can be set on each individual prepaid card. This means each team member will know exactly how much they can spend when purchasing new equipment and making other business expenses.
Infographic created by Clover Network, a contactless payments provider
Perhaps the primary reason why virtual payment cards first found favor amongst millennials is the fact that they are, in essence, a currency-free system. This means there are no transaction or exchange fees associated with it when you spend money abroad. So, whether you’re using it at home or 3000 miles away, it works the same and doesn’t charge you a penny!
Budgeting and accountability
For personal users, there is an obvious benefit in having a finite amount to spend. It’s easy to get carried away with a credit card, and even with a debit card, you have an overdraft to cushion the blow. However, with a virtual card, once the well runs dry, it’s up to you to manually top it up again. This is also why it’s such a wonderful idea for a business, as you’ll know exactly where your money is going and where it’s going, making the job of the accounting department that much easier!
Safety and security
Finally (and perhaps most importantly), as there is no physical card, it’s impossible to physically steal or clone. However, remember this is still real money you’re playing with here. Just because the card is virtual, it doesn’t mean the money is.
Featured Image by mohamed Hassan from Pixabay