Disposable’ virtual cards – What are they and how to activate them?

Single-use virtual cards are a secure alternative for paying online. Learn how disposable credit cards work.

More and more people prefer to shop online either for the variety offered by ecommerce, or the convenience of doing it from any device without going to an establishment, a habit that is increasing between, according to figures from the Online Sales Association, 7 out of 10 buyers prefer to buy online.

With this new shopping practice, credit and debit cards are one of the most common ways to make online payments, however, with the increase of online shopping also cybercrime is growing being one of the main problems faced by users.

That is why conventional financial institutions or banks have had to transform their financial products into disposable or single-use credit cards.

What is a ‘disposable’ virtual card?

A single-use or disposable virtual card is a financial instrument that has a number, expiration date and a verification code or CVV, data requested when making an online purchase, valid for a certain period of time for that transaction, i.e., they have an expiration date.

That way, every time you buy online you will have to generate a new virtual card. This way your account data is kept safe since they are not directly linked to the physical card.

This type of cards are ideal for online payments, purchases on sites like Amazon, Apple Pay, Google Pay or other payment platforms so that you only need to recharge the amount required for a certain transaction.

How do ‘disposable’ virtual cards work?

With the mobile application or online banking of each banking institution, users can create their own disposable virtual card, they only need to log in to their account to create the plastic and the necessary data for an online transaction will be generated.

In some cases banks add as an additional security measure a PIN code to confirm the transaction through the same app, or in an SMS.

Also, single-use virtual cards, since they are valid for a certain period of time, do not have the cardholder’s reference data, so if someone tries to steal this digital plastic, the only thing that could be stolen are the funds deposited on the card.

Benefits of ‘disposable’ virtual cards

    • The cardholder has the facility to create the disposable virtual card on any day, 24 hours a day.
    • This plastic has a time limit of use, so it is only valid for one transaction, thus reducing the risk of possible theft or fraud.
    • Some banking institutions allow recharging the virtual card with the exact balance to be used, a way to control expenses unlike a conventional credit card.
    • The cardholder is the only one who knows the numbering and CVV to make the purchase from the mobile app.
    • The cards can activate the one-time use verification code for added security when shopping on websites.
    • The virtual card can also be turned off or on from the bank’s mobile app.
    • Since it is in a digital rather than physical format, there is no risk of it being lost.

What is the difference between a virtual card and a digital account?

Digital accounts are part of the new financial products offered by banking institutions through online platforms. These accounts are contracted and operated online either from a website or through an application.

This type of account works as a conventional bank account, that is, you can receive deposits, buy or pay for any service without a physical card, while a disposable virtual card is valid for a limited time and is only used for online purchases.

How to create your ‘disposable’ virtual card?

The process to obtain a disposable virtual card from a bank account is through its mobile application. When you log in to your account from the app, simply select a virtual copy of the physical card.

Once you select that option, a virtual version of the physical card will be created with a card number, a temporary CVV to be used for a certain period of time.

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