Wondering how virtual cards work? A virtual credit card can help prevent theft and fraud. Learn the benefits of using virtual cards today.
Your Guide to Virtual Credit Cards in Singapore
Virtual credit cards have been gaining attention lately due to their countless benefits. Read on to know more about virtual credit cards in Singapore
Unfortunately, it doesn’t always go smoothly, especially when you run out of cash or accidentally leave your wallet at home. Sometimes you don’t have smaller bills or coins and can’t proceed to payment. More often than not, you have to fall in line to withdraw some money from an ATM. With that in mind, cashless transactions and online stores are such great blessings for shoppers.
Now that we’re stuck in the comfort of our homes, going to public places is increasingly frightening and inconvenient. Malls and supermarkets saw a drastic decrease in customers. The restrictions in outdoor activities led to the rise in digital transactions. Online stores have become a staple for many people despite increased fraudulent activities. With that in mind, you may be wondering how Virtual Credit Cards work.
What are Virtual Credit Cards?
When you make a purchase or pay bills online, you may have to provide your personal and credit card details. These are the information that scammers need for fraudulent transactions. It is not a big problem for large retailers, though. But it is an entirely different thing for small businesses. Nowadays, it’s hard to determine who is real or not. That’s where the virtual credit card (VCC) enters and works for your safety.
A VCC or a controlled payment number refers to a randomly generated 16-digit number associated with the actual account. It secures credit card payments and makes online transactions more convenient. Although a VCC is a complimentary service by the card provider, it is not physically issued. Even so, it works similarly to a conventional credit card. Keep in mind that generated numbers are typically used for a single transaction and may expire if not used within its validity period. With that, it prevents fraudsters and scammers from stealing your card details.
According to recent statistics, there are already about $3 billion credit cards globally. In 2018, credit card transactions amounted to $300 billion. The impact of the pandemic drastically changed how people do transactions. The transmission of coronavirus has seemed to have made people more hygiene-aware. It increased our preference for credit cards over cash. In the US, for example, 28% of people stopped using money since the pandemic started.
In a recent study, it was projected that there would be a noticeable decrease in cash transactions. For example, cash transactions in Singapore plummeted to 39% in 2020. The figures turned out precise as the actual value was even lower at 37%. The graph below shows how much the pandemic affected cash transactions in Singapore and Malaysia.
Other mature and emerging markets in Asia, such as Korea and China, showed similar results. Scandinavian countries had the same responses. Indeed the current setup made people avoid in-person transactions, particularly cash. With its increasing popularity, many people are wondering how to get a virtual credit card. Hence, some estimate that VCC transactions may increase to $6.8 billion in 2026.
How Do Virtual Credit Cards Work in Singapore?
In a nutshell, the VCC number is linked to your main credit card. It allows you to transact without worrying about fraudsters. Since the generated number differs from your actual credit card number, it will be hard for malicious online merchants or criminals to defraud you. You can also break its link to the main credit card if you see the possibility of someone stealing it and using it for fraudulent payments. Nevertheless, it will still be wiser to try the following techniques to protect your online transactions:
- Set an expiry date for the VCC numbers.
- Set a spending or credit limit to your VCC number.
- Always lock or delete a specific VCC number. For example, you may choose to either use VCC for single or multiple transactions.
Likewise, virtual credit cards in Singapore ensure the availability and security of its banks. Their systems are built with trustworthy technology to suffice their banking needs easily. While it is still far from top cashless countries like Canada and the UK, it has plans for cashless payments at more than 500 hawkers. With four digital bank licenses, there may be rapid growth in VCC in mobile and digital wallets.
Prepaid virtual cards (PVC) are not widely used in the country. Even so, some PVC providers exist and offer services for virtual payments. New entrants in the banking industry have also recently started to offer virtual or prepaid credit and debit cards.
Some banks offer VCC and PVC to their corporate banking clients. It can help a corporation consolidate and manage its employees’ corporate expenses without issuing individual cards. For example, it can oversee its employees’ credit cards through credit limits and transaction caps to ensure appropriate usage. On the other hand, Other banks offer VCCs to carry your issued card via mobile app.
Like in other countries, virtual credit cards in Singapore have some perks for the owners. You don’t have to worry about losing your VCC. All you have to do is load your e-wallet app. You may use it anytime, even if you leave your physical credit card at home. Payments are also swift and secured.
Benefits of Using Virtual Credit Cards
As mentioned above, there has been a growing number of virtual credit cards recently. It is no longer surprising since it’s a safe way to pay online. Not only does it protect you from fraud, but it also makes your transactions easier. Moreover, more banks are starting to offer great products and services. Below is the list of a more detailed explanation as to why VCCs is your online shopping buddy.
Secured online purchases
Randomly generated card numbers add an extra layer of protection to your actual credit card. With that, online vendors can’t get your actual credit card number unless you carelessly give more information to them. Generally, a VCC always provides additional security for your online transactions.
Generating VCC numbers for single or multiple transactions is free of charge.
Single- or multi-use
You can choose between VCCs for single and multiple transactions depending on your preference.
Limited to one vendor
Using your real credit card number is prone to fraud and hacking. If the site where you stored it got hacked, you could have fake charges and fraudulent transactions from other vendors and hackers. On the other hand, VCC charges are limited to one vendor.
Suppose you’re walking on the street, and your phone suddenly rings non-stop. Maybe your first impulse is to dig through your bag and answer the call immediately. However, you did not notice that you dropped your wallet with your credit card in it. The next thing you know is you’re going through the hassle and stress of canceling your card and checking if someone made a transaction using it. In VCC, you don’t have to experience it. You can leave your actual credit card in your drawer if you want to. You can always make online purchases and payments using your VCC.
Also, if there’s a data breach, you don’t need to get a new physical card. VCCs for single transactions can’t be reused, especially for fraudulent activities. Meanwhile, VCCs for multiple uses only need another generated number for replacement.
Peace of mind
It gives you peace of mind when you make online or on-the-phone purchases since it guarantees added security.
Types of Credit Cards
|Bank-Issued Credit Cards||These are cards issued by financial institutions, such as banks. The cardholder can borrow funds from the provider for purchases and transactions.|
|Store Cards||These are cards issued by stores. Cardholders can use it to purchase goods at the provider.|
|Travel/Entertainment Cards||Like bank credit cards, cardholders can purchase at many stores and locations. Companies use them to cover the business travel-related expenses of their employees.|
When handing out corporate cards to employees, ensure that you have a set of rules and regulations on its use to prevent them from abusing the card’s power.
Disadvantages of Using Virtual Credit Cards
VCCs are not foolproof alternatives to your actual credit account. Despite the convenience and security that VCCs offer, they also have downsides. For example, VCCs are only applicable to online transactions, so you can’t swipe them when you’re in the mall or supermarket. Also, there are instances where they inconvenience you with online purchases, which may include the following:
- Since VCC numbers may expire after a single or specific number of payments, it may lead to more hassle than convenience when dealing with recurring payments.
- Limited availability
- You may not track some transactions VCC numbers empire after a specific number of transactions.
- Returning purchased items online to a physical store can be challenging. Merchants may still have to match VCC numbers with your physical card to process them. Once the number expires, it can’t be retrieved. Instead of a refund, the best thing you may have is a store gift card.
Things to Consider when Getting a Virtual Credit Card
As mentioned above, virtual credit cards are not entirely secure from fraudulent transactions despite the convenience and security it guarantees. Users must remain watchful of their credit accounts to track any potentially unauthorized transactions. Indeed, it’s one of the latest crazes in the world of online shopping. But one must consider its availability and accessibility since VCCs are designed for online transactions. So if there are items that you need to pick up, you will still have to present your physical card. Once you receive the items, you can’t return them in just a snap. If the VCC number you used for the transaction has already expired, the best thing you can receive is a store credit or gift card. Booking reservations or rentals online is also stressful at times.
Singapore Virtual Credit Cards
As part of the Four Asian Tigers, Singapore is one of those countries that have advanced technology. Its efficient and secure banking system through virtual credit and prepaid cards shows that it keeps up with the changing global economy and technology landscape. The companies below offer a Singapore virtual credit card and prepaid card that may fit your needs and preferences.
GrabPay Card Linked to GrabPay Wallet
GrabPay offers virtual credit cards or GrabPay cards that can be linked to your GrabPay wallet. They serve as virtual cards for online payments and other transactions. They can also be used overseas.
You can have both a digital and a physical card for online payments once you sign up for a GrabPay card. But you need to have a GrabPay account and wallet first before doing so.
Vividcard by Singapura Finance
Singapura Finance is a Singaporean company that has been in operation since the 1950s. It offers a prepaid Mastercard known as Vividcard. This card is linked to an e-wallet that can be created by opening a savings account there.
A Vivid card’s savings account has good returns on deposits. It earns an interest of 1.05% per annum on deposits up to 10,000 SGD, 1.30% on deposits of 10,000 to 20,000 SGD, and 0.25% on deposits 20,000 SGD.
YouTrip started the idea of exchanging foreign currencies online, especially during your trip overseas. YouTrip cards can be partnered with esLink. It has an excellent mobile app that can deactivate your YouTrip Mastercard if you lose it.
YouTrip signup is easy. You just have to download the app and sign up with your NRIC details. It will mail the card to you as soon as your account and details are verified.
Fevo Prepaid Cards
MasterCard powers Fevo cards. It provides a prepaid card that can be used worldwide with all MasterCard merchants. You can use these prepaid cards for Samsung pay and public transport.
To get one, you just have to create and activate MasterCard account-based ticketing (ABT). To know more details on how to activate it, you may visit the transitlink website. Keep in mind that you can only get Fevo cards if you have a valid NRIC, FIN or passport, and proof of residence.
Matchmove cards is also a good provider of cards that can help businesses manage payments. These cards allow you to send and receive an amount from anywhere globally.
Revolut Premium Cards
Revolut provides online banking and a premium account. Its premium account has an anti-fraud system that will alert you if your account has suspicious activities. It also gives you access to prepaid or single-use credit cards. You can shop online without worrying about these single-use cards, even if the details get hacked.
Moreover, it offers 0% currency conversion fees and 0$ ATM fees for Singapore dollars withdrawals. However, it charges the users S$9.99 a month.
Wise Multi-Currency Card
TransferWise offers a multi-currency account that allows the owners to use the card and spend in 200 countries via Apple or Google Play. It only costs 10 SGD or 7 USD. With that, its service is cheaper than the local banks.
BigPay is a money app that provides a card that can be used anywhere. It helps you track your expenses and budgets. You just have to sign up using MyInfo if you are in Singapore.
FlexM allows you to pay for local and worldwide purchases and digital services FlexM. It is also registered in fintech org and partnered with MAS’ SGQR.
DBS Virtual Credit Cards (Corporate Clients Only)
DBS Singapore provides virtual credit cards to corporate banking customers. The issuance of these credit or debit cards for employees can be tracked well by their corporate clients. It helps them manage the expenses and usage of employees by setting a credit limit.
It also provides complimentary Travel Accident Insurance coverage for employee misuse by holding two or more virtual credit cards.
Spenmo Corporate Card
Spenmo provides efficient and secure corporate Mastercards. Its software can detect fraudulent activities and suspicious behaviors. It can estimate future spending.
Initially, it operates like a typical debit card. You can transfer money to your Spenmo account and allocate it to teams and employees. It tracks purchases to help you reduce the need for lengthy reimbursements, manual reconciliation of amounts from different transactions, and paper receipts. It also has real-time analytics that can give you an overview or summary of spending habits in your company and identify high expense areas to help you avoid overspending again.
With regards to pricing, companies that use Spenmo have unlimited access to corporate cards alongside local and international payments for a packaged subscription rate of $39 per month. Other features include the following:
- Approval or denial of top-up request through your phone
- Activation/deactivation of cards and modification of limits in seconds
- Automatic notifications of transactions
- Complimentary physical cards for every employee
- Up to 1% cashback on all transactions
You have to determine first whom you should provide cards to before the issuance. If they are in charge of major payments and monthly purchases, they are the ones who need it most. Employees who travel for business purposes should also be provided corporate cards.
Hopefully, this guide may help you choose the best virtual credit cards that fit your needs and preferences. If you want to learn more about various cashless payment methods or if you are into money management, there are various tips to save money in Singapore.
You may also book a demo on corporate cards. For more information, get in touch and seek assistance from Spenmo today.
Frequently Asked Questions
What is a common credit limit for a virtual credit card?
The usual credit limit is $300. But you can change it within the overall limit of your physical card.
What should I do if I think my virtual credit card has been compromised?
Generally, thieves, fraudsters, and malicious online sellers cannot trace virtual credit card numbers, adding more protection to your account. But if you still think that it has been compromised, report it to the provider immediately to avoid fraudulent activities.
Will the CVV for virtual credit cards change every time?
The CVV will not change as long as the physical card is active and not reported as lost or stolen.