Virtual FinTech Cards – the Hidden Gem to Power up your Business & Customers
Everybody talks about FinTech. What is it? Why and how are FinTech cards getting so famous? How do businesses and their customers benefit from them? Let's get some answers. Did you ever lose a credit or debit card? If so, you would know the experience is horrible – going through the reapplying process. The process is different with each card issuer, and it takes several business days to deliver a physical card to customers. Moreover, let's not forget about the replacement fee and shipping charges.
The whole process can take a snail's route – You fill out an application, send it to the card issuer company, wait for them to review it, approve it, and so on. The reissuing process will take several days or weeks, depending on the card issuer company's policies.
Now imagine going through all this ordeal in another country.
That's when virtual cards come into the picture. A virtual card is just like your regular card that only exists in cyberspace. It's not something you need to carry around physically in your wallet. However, its purpose is the same as your regular card. It has an auto-generated 16-digit number, expiry date, and CVV code. These cards help customers use the payment rails like Rupay, Visa, and MasterCard for online payments.
Let's take a closer look at virtual cards and how they will revolutionize the future of finances.
How do Virtual Cards Work?
Virtual cards work by using a technology called tokenization. When a virtual card is issued, a unique digital token is created that is linked to the account holder's card details. This token is then used to process transactions in place of the actual card number.
Users who make payments online using a virtual card provide the token number to the merchant's payment gateway. The payment gateway then sends the token number to the card issuer for verification.
Once the card issuer verifies the token, the transaction is approved, and the payment is processed. Since the token number is a unique identifier and not the actual card number, it helps protect the user's sensitive card information from being exposed in case of a data breach.
With virtual cards, consumers can make online purchases without adding payment information. You can mask your identity and buy anything you want.
The card number generation of a FinTech card is purely based on Random Number Generation (RNG). It's unique, so even if the card details are stolen, the perpetrators will not get access to the user's bank account. This will significantly reduce the chances of credit card fraud, theft, and misuse.
A virtual card is a go-to option if you want complete control over your finances, like reviewing your transactions quickly without waiting for a bank statement. It is also getting famous because, with virtual cards, you make transactions with overseas vendors that might not deal in traditional payment modes because of complications involved with international payments.
Virtual cards hold a plethora of perks for financial institutions as well. It helps reduce costs associated with physical card issuance, plus improves customer experience. You can even get supplementary or add-on cards for each family member.
How do corporates achieve smarter ops with virtual cards?
Businesses increasingly use virtual cards to streamline their operations and achieve greater efficiency. Here are some ways in which corporates can get smarter operations with virtual cards:
Enhanced control and security
Virtual cards offer greater control and security than traditional payment methods such as checks or physical credit cards. They can be issued with specific limits and restrictions and can be deactivated or deleted immediately after use, reducing the risk of fraud and unauthorized transactions.
Simplified payment processes
Virtual cards can simplify the payment process by eliminating the need for physical checks or credit cards. This can help reduce administrative costs and increase operational efficiency, as employees no longer need to spend time on manual payment processes.
Improved tracking and reporting
Virtual cards provide businesses with real-time tracking and reporting capabilities, allowing them to monitor spending and track expenses more accurately. This can help Virtual cards also offer greater control and flexibility to users. Since virtual cards are not physical, users can create and manage them easily from their mobile devices or computers. They can set spending limits, customize the usage rules, and even freeze or cancel the card if necessary.
Benefits for Businesses & Customers
Virtual FinTech cards are safer than traditional physical cards. They do not have a physical presence, which makes them less vulnerable to theft, loss, or damage. Virtual cards often have advanced security features such as two-factor authentication, biometric verification, and transaction alerts.
Easy to use
Virtual FinTech cards are incredibly easy to use. Customers can apply for and activate a virtual card within minutes without needing any physical paperwork or waiting periods. They can then use the card to purchase online, just like a regular credit or debit card.
Virtual FinTech cards offer greater control over spending. Customers can set limits on their virtual cards, restrict transactions to specific merchants, or even cancel their virtual cards if needed. This helps customers manage their finances more effectively.
Virtual FinTech cards are often more cost-effective than physical cards. Businesses can save money on printing, distribution, and maintenance costs, while customers can save on fees and interest rates associated with traditional cards.
Virtual FinTech cards offer greater convenience to both businesses and customers. Companies can easily issue virtual cards to employees, freelancers, or partners without the need for physical cards. On the other hand, customers can use virtual cards to make payments from anywhere, anytime, without needing a physical card reader.
How can LDT Technology help build your FinTech card?
LDT Technology offers a robust platform to issue virtual cards that can be easily integrated into financial institutions, including banks, NBFCs, PPI issuers, and Card Networks.
Our full-fledged APIs for card issuance allow NBFCs, banks, FinTech brands, and businesses to launch their virtual cards. These cards are safe and fully compliant with RBI. The bank is a license holder for the PPI at the backend and for handling audits and reports with the regulator. Our card issuance platform will manage all the auditing and reporting to and from the banks.
Our full-fledged KYC APIs allow extensive background screening of consumers before issuing a virtual card. The KYC API verifies customers' identity via PAN card, Aadhar card, DIN, CIN, income data, negative lists, and more. Moreover, with the help of our CKYC APIs, businesses can prefill new consumers' onboarding data to save time and minimize fraud.
Virtual cards are a game-changer in the world of digital payments. They offer greater security, cost-effectiveness, convenience, and control to users and businesses alike. With the growing popularity of virtual cards, we can expect to see more innovative solutions that will continue improving how we pay and manage our finances.