Financial institutions are all trying to win the battle for customer attention. Users expect seamless digital experiences across all aspects of their lives. This includes how they manage their finances.
An institution must be ready to provide unique ways to solve daily problems or requirements. Nowhere better is this exemplified than in the use of virtual cards.
The days when customers waited ten days for cards to arrive in the post are gone. Instant issuance is a feature embraced by leading banks, enabling the on-demand creation of virtual cards.
Consumers are leaping at the opportunity to use them, too. Global virtual card transaction value is predicted to hit US$ 6.8 trillion by 2026. While developed for prepaid cards, virtual issuance is becoming the norm for traditional account-tied cards.
What are virtual cards?
Virtual payment cards issue with a unique number. This number links to an existing debit account, line of credit, or credit card account. Created for recurring payments or one-off purchases, they are compatible with all the leading digital wallets.
Account holders create virtual cards issued instantly through the bank or credit union. This is done either through a web browser or mobile app. The card is usable immediately, while powerful security tools mean the touch of a button can deactivate it. If the user requires specificity, then controls for specific merchants, categories, geographies, or times of day can be enabled.
Not just for retail customers
Virtual prepaid cards have broken into the retail payments sphere in recent years. Yet they have already seen use for businesses and commercial companies for some time. The ease of payment reconciliation – the tracking and ownership of specific cards and accounts – makes virtual cards a compelling option for large companies.
Market-leading virtual card systems also come loaded with expense management features. These change the tiresome process of checking between records and payees, making it a one-touch experience. Businesses can add custom rules and spending limits and review transactions in real time.
Virtual cards bolster security
The customisability of virtual cards results in greater defence against fraud. Enforceable limits ensure a virtual card is usable only in certain circumstances. This contrasts with a physical card, which is almost universally usable. This is especially true with the proliferation of contactless payments.
Controls enable a card to detach from the associated account. Should a fraudster compromise a virtual card, they are then unable to compromise the whole account. Hidden account numbers and unique card numbers ensure only the specific card is under threat. This card is quickly cancelled or frozen from within mobile applications or online.
For merchants, this enhanced security also means fewer chargebacks due to fraud. With these charges reaching as high as US$ 50 per instance, the cost savings are robust.
Virtual cards increase revenue
Businesses and financial institutions both must pay fees to the card issuing companies. Cardholder fees per employee compound this. Using a virtual card eliminates these costs from a company’s budget.
For banks, a virtual card can deliver increased interchange revenue. They can replace lost physical cards instantly without a decrease in spending habits. The self-issuance of cards means an increased level of usage. Customers can create cards for each major expense in their lives.
Key features of a market-leading virtual card platform
Taking advantage of virtual cards’ benefits means selecting the right platform. Finding a system with solid integrations with card-issuing banks and payment networks is essential. This enables the rapid processing of transactions and provision of new cards. As virtual card usage on mobile devices increases, digital wallet integration is paramount.
Pismo’s card issuing platform features native integrations with major card networks, as well as full certification with Apple Pay, Google Pay, and Samsung Pay.
Virtual cards are applicable in a range of everyday uses. This means your provider must be able to operate a flexible platform, adaptable to a variety of applications. Traditional tech platforms are closed-loop systems, often defined by set functionality. These cannot adapt to the evolving needs of both customers and institutions.
Pismo’s platform is built on APIs, ensuring flexibility in creating new capabilities. Combined in different ways, they address any specific need for payments and banking. Our auto-scaling cloud infrastructure also ensures support for you as your business grows.
Robust security as standard
Virtual cards improve security for the end user, but it is crucial that the platform you select ensures protection for supporting infrastructure. All the benefits of virtual cards are for nothing if data is unprotected and vulnerable to bad actors.
Market-leading platforms should come with AES 256-bit encryption for data in transit and at rest. Key storage should occur in different zones from the data. Your provider should regularly conduct external and internal penetration tests. The Pismo platform provides all this and more, including tokenisation support for all PCI zones, WAF and edge firewalls, and 24×7 monitoring for threats.