In today's world, one can buy anything online. Considering the convenience that comes with online purchases, I don’t expect myself to go to the store to make most of my purchases anymore. evolution has made things quite easy for us.
Unfortunately, online shopping comes with the drawback of security issues. Cybersecurity threats and data breaches have increased in recent years. While most banks offer top-notch security, identity theft is becoming rampant. CPA Canada’s 2020 Fraud Survey found that 18% of its respondents suffered credit card fraud. It’s understandable to be a bit anxious about using your regular credit card for online shopping.
Fortunately, virtual credit cards have become a popular method to enjoy the convenience of online shopping while minimizing the amount of personal information you share online.
In this article, we will talk more about the Virtual Credit cards and the Best virtual Credit Cards in Canada.
What Is A Virtual Credit Card?
A virtual credit card is a digital credit card that only exists online. It is a unique credit card that lets you make online transactions on your credit card without sharing your primary credit card information.
Virtual credit cards ensure your information’s safety. While limited to online use, virtual credit cards are an excellent safety measure that helps to reduce the risk of fraud.
Virtual credit cards are attached to your main account, but protect your account information from data breaches, fraudulent uses, and other compromises.
How Do Virtual Credit Cards Work?
Most online retail stores and merchants store their customers’ payment information. Merchants and retailers store the information to make the shopping experience more convenient for their customers. By storing the payment information, online merchants can eliminate the process of reentering information for each transaction.
As convenient as that can be, it leaves the data vulnerable to hackers who are always looking to gain access to this data. In the event of a data breach, hackers can steal information pertaining to your identity and credit card and use it to commit fraud.
Virtual credit cards provide an ideal solution to this problem. As an online shopper, each time you make an online purchase, the virtual credit card provides you with unique and dynamic credit card information for each online transaction you make.
Since each transaction has its own generated set of numbers, the storage and theft of this information are completely useless to hackers.
The Best Virtual Credit Cards In Canada
- KOHO Prepaid Visa
- KOHO Premium Prepaid Visa
- Stack Prepaid Mastercard
- RBC Virtual Visa Debit Card
Virtual cards have been available in Canada for several years now. You might be able to get a virtual credit card through the bank or financial institution that issued your regular credit card, provided that they offer virtual credit cards. Several major e-commerce sites also issue and accept virtual credit cards.
KOHO Prepaid Visa: The KOHO Prepaid Visa card is a free virtual card that lets you earn cashback on all your spending and it awards you bonus rewards when shopping from selected merchants. The KOHO Prepaid Visa card comes with a flat 0.5% cashback on all your purchases made using the virtual card.
The card also lets you save some money on foreign transaction fees because the card only charges 1.5% instead of the typical 2.5%. You can create a virtual Visa card using your KOHO account to facilitate online purchases without exposing your personal identity and primary credit card information.
- Offers 0.5% cashback on all purchases
- Rewards bonuses for shopping with select merchants
- Offers savings on foreign transaction fees
- Free of charge
KOHO Premium Prepaid Visa: The KOHO Premium Prepaid Visa card is one of the best prepaid credit cards in Canada that comes with a variety of useful features. You get 2% cashback on all grocery, gas, restaurant, and transit purchases. The card also offers you 0.5% cashback on all other purchases. The KOHO Premium Prepaid Visa card comes with 0% foreign transaction fees.
You can also opt into KOHO Earn Interest that turns your KOHO account into a high-interest savings account that pays you at a 1.2% interest rate. The card also lets you create a virtual credit card that you can use for online purchases instead of entering your primary credit card information on merchant websites.
- Offers 2% cashback on select purchases
- Offers 0.5% cashback on all other purchases
- Offers 0% foreign transaction fees
- Offers the opportunity to create a high-interest savings account
Stack Prepaid Mastercard: The Stack Mastercard is a no-fee prepaid card that also gives you access to a virtual prepaid credit card. This is a simpler prepaid card that does not earn base rewards for all your purchases. However, you can earn bonus rewards with over 140 select Stack Mastercard retail partners.
You can also use the STACK Finance app on your smartphone to see your weekly spending habits and get a better face of your finances, allowing you to manage your spending much better. The card comes with zero liability protection and you get the ability to freeze your account at any time.
- No-fee prepaid card
- Offers instant cashback with over 140 retailers
- Comes with zero foreign transaction fees
- Offers zero liability protection
RBC Virtual Visa Debit Card: The RBC Virtual Visa Debit card is a smart and safe way for you to pay for online, telephone, and mail order purchases by debiting funds directly from your RBC bank account. It requires the prerequisite of being a customer with RBC bank. Issued by one of the most significant financial institutions in Canada, it is an ideal way to shop online with the added peace of mind that your information is safe and secure.
The RBC Virtual Visa Debit card does not come with the benefits of credit card transactions like cashback or discounts with select retailers. However, you can use the virtual card for all online retailers that accept Visa payments.
- Made by a reputable financial institution
- A safe and secure method for online payments
- Funds are debited directly from your RBC bank account.
How To Use Your Virtual Credit Cards
One thing We must remember about virtual cards is that they are designed to be used online or over-the-phone transactions. It means that whenever you are checking out of a merchant’s website for your online purchases, you will need to open your virtual credit card issuer’s website. Some virtual credit card providers offer provisions for browser extensions that support virtual credit cards.
You are expected to log into the website and generate a one-time password. This contains a unique credit card number and security code. You can set an expiration date for your virtual card and set a spending limit on the card.
Here is a quick look at what you effectively have to do to use your virtual credit card:
- Sign up with a virtual credit card issuer of your choice to obtain your virtual card details. The details include your card number, validity date, and CVV.
- Make your online purchases and use the information provided by the virtual credit card issuer when you check out instead of the normal credit card details.
- Submit the payment and complete your transactions.
- The funds will automatically be deducted from the account linked to your virtual credit card.
What Are The Benefits Of Using Virtual Credit Cards?
Below, I will discuss the benefits of Virtual Credit Cards.
Avoid Issues With Data Breaches: Virtual credit cards add another layer of security to protect your identity and payment information on the merchant’s website. Virtual credit cards come with the same security features as physical credit cards, so they offer adequate protection. In case hackers manage to breach the data for online merchants you shop from, any information that they steal will be effectively useless.
Easy In-Store Shopping: When you add a credit card to your digital wallet on your smartphone or smartwatch, it is typically in the form of a virtual card. Using digital wallets for in-store purchases is convenient because it can be as simple as tapping your device on a terminal. The transactions are secure, straightforward, and easy, and they don’t require you to carry a physical credit card with you.
Free Of Charges: Most virtual credit cards come free of charge because they are linked to your existing bank accounts.
Instant Delivery And Use: Regular credit cards take a long time before they are made and delivered to you. Virtual credit cards offer the advantage of instant registration and you don’t have to wait for the delivery of a physical card before you can start using it. You can receive the virtual card number almost instantly after completing the process to sign up for it and use it to make payments.
So many individuals pose questions like 'What Information Does My Virtual Credit Card Contain?'
Let me give the information because many do not know.
- A 16-digit virtual credit card number
- Expiry or validity date
- 3-digit CVV2 code
- Name of the account holder
Read Also: The 10 Best Prepaid Credit Cards in Canada
Virtual credit cards provide you the benefits of stress-free online shopping, particularly when you’re shopping with a merchant that you are not sure you can entirely trust. An underrated advantage of virtual credit cards is the ability to set spending limits. This feature is available with most virtual credit cards in Canada and it lets you get better control over your spending habits.