Virtual credit and debit cards offer customers increased security and control over their finances. As a result, many financial institutions, app developers, startups, and even companies not in the financial services space, are interested in offering (or do offer) virtual cards. However, creating a virtual card issuance app requires extensive development time, fees, contracts, and administration. These factors can prevent an app from gaining traction in the competitive landscape.
What is a virtual card and what are the benefits?
A virtual card is a temporary credit or debit card number that can be created through a web or mobile app, and tied to a user’s mobile wallet. Virtual cards are becoming popular for one time purchases and disbursements, but also can be used in your everyday life.
Virtual cards are linked to the user’s main credit or debit card account, however, they minimize the amount of personally identifiable information (PII) the user shares with the place a purchase is made. Virtual cards are tokenized on a user’s phone, encrypting the account numbers, and allowing the user to never worry about losing a physical card.
Virtual cards have several benefits. The biggest benefit is privacy and protection against fraud. With data breaches happening almost on a daily basis, using a virtual card can protect consumers from being a victim of an attack. Since the virtual card limits the amount of PII and isn’t able to be connected back to the main credit or debit card, the virtual card is useless to a hacker or someone trying to use that card number.
With physical cards, the magnetic strip or chip can be mimicked by sophisticated thieves, or the numbers on the card written down by less sophisticated thieves who you hand your card to – e.g. the waitstaff of a restaurant. The virtual card is used at the point of sale, requiring a face scan (or pin) to unlock the phone, and then a face scan (or pin) to make the payment. If a thief steals or mimics a physical credit card, they can swipe the card, with no extra security that proves they own the card. The virtual card is never handed to anyone and there are no magnetic strips or chips that can be cloned by a thief.
Virtual cards can also be used to pay vendors/suppliers. Instead of writing checks, businesses can use virtual cards to make payments, reducing the chance for fraud and human errors, while at the same time, helping the business become more efficient.
Another benefit is the ability to close the virtual card at any time without it impacting your main card. You can also set spending limits and even limit the virtual card to only be used at a specific merchant. All of this can be done through popular wallets native to the iPhone and Android devices.
How to get a virtual card?
Citibank, CapitalOne, AmericanExpress, Masterpass from Mastercard, Chase Pay, among several other larger financial institutions offer virtual cards. Other companies that offer virtual cards are Privacy.com, Abine, Divvy, and Walmart MoneyCard, however, probably the most popular virtual card, right now, is the Apple Card. While you can get a physical titanium card (with a chip), the Apple Card is a digital-first experience that provides a more secure way to make purchases. It is connected to the Apple Wallet.
Virtual cards can even be used to pay vendors/suppliers. Instead of writing checks, businesses can use virtual cards to make payments, reducing the chance for fraud and human errors, while at the same time, helping the business become more efficient. This is becoming more popular with the explosion of the “gig economy.”
Why Use Hydrogen to Build Your Virtual Card Issuing App?
To help organizations build their own virtual credit and debit card issuance, Hydrogen offers an application programming interface (API) or no-code offering for issuing virtual cards. Our API platform makes getting started with development simple and provides the storage space, UI, analytics, and business logic you need to make your virtual card issuing component a success.
Our offerings allow you to do more than issue virtual credit, debit, and prepaid cards. When building your app, you can use Hydrogen’s powerful platform to incorporate useful functionalities like intelligent spending and overdraft alerts, anti-fraud alerts, credit and lending decisions, deposits and withdrawals, and much more. Hydrogen also integrates with banks, issuers, program managers, and BaaS, through popular vendors such as Marqeta, Cross River, Q2 CorePro, EML Payments, Apple Wallet, and Google Wallet. All these integrations work together to improve the user experience and make your product more competitive in the market.
With Hydrogen’s virtual card issuing API and configurable no-code solutions, you can start building your card issuance app quickly, whether you have years of experience in the industry or are just starting out. Start building today!