When it comes to mobile banking, virtual cards have to be one of the most crucial advances in FinTech mainly due to their versatility. Virtual cards offer consumers greater security as well as convenience and efficiency. In this week’s blog post, we look into the importance of the role virtual cards play within digital banking as well as the benefits and issues surrounding it.
One of the main advantages of virtual cards is the enhanced security measures it comes with. Due to them being entirely online it means that these virtual cards are never tied down to a physical location such as an ATM machine (Automated Teller Machine). Additionally, the majority of virtual cards have good fraud prevention which ensures that consumers’ card details won’t be stolen as there is a third-party source protecting it. Nevertheless, ways in which people can keep their card details safe online is by making sure they use secure passwords as well as trying to avoid using public WiFi connections for any bank transactions. Overall, the enhanced security systems incorporated into virtual card systems seem to provide a safe space for consumers to feel comfortable using and managing their finances.
Since in use, virtual cards have given consumers more flexibility, especially in how and when they choose to manage their finances. This can particularly be seen through the fact that consumers have the option to make payments, check statements as well as handle international payments (for some) all in their own time. Ultimately, this proves to be much more efficient as consumers no longer have to fully rely on physical cards, ATM machines or physical branches to fulfil their financial needs.
Despite the many advantages of virtual cards there are some possible disadvantages when it comes to it. One big factor is the issue of technical problems occurring; whether that’s network issues or a risk of the app shutting down/ being under maintenance, this could cause great inconvenience for consumers and put them at risk of hackers when there isn’t any steady network. However, with the constant improvements within the FinTech industry, the chances of this happening could become less frequent.
Effect on businesses
Businesses tend to positively benefit from the use of virtual cards and this is largely because of the rise of online shopping which puts them to good use. Virtual Cards offer businesses slightly reduced costs in the sense that they are able to set spending limits through them and closely manage their budgets. In addition to this, they are able to respond quickly to any queries as with everything digitalised, it gets flagged up a lot quicker than looking into issues surrounding traditional physical bank cards.
By looking at all that virtual cards have to offer the FinTech industry, it is clear that they hold great importance in today’s society. Although there are minor issues and concerns surrounding it such as technical difficulties and security issues whenever these occur, it is evident that security systems and technological advances are being reviewed upon a regular basis and the future of virtual cards seem very promising.