Banking Basics
The Best Virtual Card (UK)
A virtual card provides UK consumers with a safe and simple way to make purchases online.
This digital alternative to a standard physical card provides various benefits, including greater security and flexible spending choices. However, what is a virtual card, exactly, and how it works? Let’s find out.
Table of Contents
What is a virtual card?
Virtual cards function similarly to standard cards and are available for free as part of personal and joint current accounts. These cards come with a unique card number, CVV number, and expiry date.
Virtual cards are stored securely in your phone’s digital wallet, eliminating the need for a physical card.
You can obtain a virtual card by signing up with digital banks or linking them to prepaid accounts. Everything related to virtual cards, from card numbers to verification details, is created entirely online.
A virtual prepaid card
A virtual prepaid card is simply an amount of money stored in one location that can be used to make secure online purchases.
Usually, these digital cards are linked to a prepaid account and are active for a limited time. This aspect and restricted usage of certain websites ensure higher security of your money than using a single virtual debit card for online shopping.
A mobile wallet
Virtual cards are often linked to a mobile wallet, a type of digital wallet, for an extra layer of convenience and security to online and in-person transactions.
When users add a virtual card to their mobile wallet, they create a secure connection between the mobile wallet and the underlying financial account associated with the virtual card.
This linkage enables users to make payments or withdrawals using the virtual card details stored in their digital wallet. It offers a seamless and safe way to access their funds and conduct various transactions.
There are many digital wallet options that you can choose from. Also, you can try mobile wallet services like Apple Pay or Google Pay.
Apple Pay is available on iOS devices and is known for its security features and wide acceptance at retailers. On the other hand, Google Pay is designed for Android users and offers a versatile payment solution and integration with various Google services.
Moreover, you can always check if your bank has a mobile app with digital wallet features, allowing customers to link their accounts for contactless payments.
As an alternative, many financial service providers and digital-only banks offer mobile wallets for fiat band crypto assets. However, always check if the wallet provider offers a virtual debit card and supports contactless payments.
Benefits of virtual cards
If you are wondering whether or not to get a virtual card, here are some beneficial aspects that can help you make up your mind.
Security
In terms of security, virtual cards are a formidable choice. In contrast to physical cards, they are immune to theft or cloning and leverage cutting-edge security measures, including two-factor authentication and encrypted storage of card details.
Moreover, when making purchases from unfamiliar websites or conducting phone transactions, these cards offer an added layer of security as their details are exclusively associated with the funds on the card, keeping your balance shielded.
Furthermore, you can delete or lock your virtual card. Moreover, certain virtual cards provide a financial safety net, guaranteeing your money for up to £85,000 by the FSCS.
Convenience
Carrying a wallet or purse is no longer a necessity. A virtual card is always on your phone, and the banking app offers versatile in-app tools for tracking your spending and managing your finances.
Moreover, the convenience extends beyond avoiding card retrieval from your bag – in case you need a new card, the app provides instant issuance without delivery delays or account freezes, ensuring uninterrupted spending.
Control
You can control more than just locking and unlocking your card with your phone. Many virtual cards offer access to various features. Most apps have built-in budgeting tools that may help you set daily or weekly spending limitations.
Virtual cards are convenient for subscription management since you may create a separate card and manage subscriptions.
Virtual card limitations
In the case of online payments, virtual debit cards function almost identically to their physical counterparts.
However, if you try to withdraw cash at an ATM using your virtual debit card, you won’t succeed. Since they are not tangible, there is no magstripe or chip and PIN to utilize at a financial institution’s automated teller machine. The same goes for virtual credit cards.
Moreover, it gets tricky when talking about real-life situations at stores and gas stations, including a virtual card. You can use your virtual card at physical stores only if the store is equipped with near-field communication (NFC) technology and accepts payments from digital wallets.
Nevertheless, you can seamlessly integrate your virtual debit card into services like Apple Pay or Google Pay, just as you would with a physical debit card.
So, which is better: A virtual or physical card?
The choice between a virtual and physical card depends on your preferences and needs. A virtual card offers enhanced security and digital convenience, while a physical card is essential for in-person transactions and may offer added benefits.
However, it can be beneficial to have a virtual and a physical card to cover all payment scenarios.
Top 5 virtual cards in the UK
swissmoney virtual card
swissmoney now provides MasterCard virtual prepaid cards, which you can use for online and in-store purchases. The virtual card is linked to a digital wallet where users can store and access their digital assets.
The swissmoney digital wallet is compatible with two networks, five cryptocurrencies (Tron, Bitcoin, Ethereum, USD Coin, and USDT), and four fiat currencies (Euro, Dollar, Pound, and Swiss Franc). In addition, swissmoney always adds new ones to the lineup.
Also, users can instantly exchange their cryptocurrency for other currencies and use the app’s virtual card to make purchases. However, you can use a virtual debit card to make purchases in Euros.
Monese virtual card
Like many other virtual cards, Monese can be obtained and used with a mobile app. However, you can activate a virtual card in their preferred currency only after receiving a physical card in the mail.
You can open a Monese account in pounds sterling, euros, Romanian lei, or any combination of those three currencies.
Also, the Monese app offers useful services for budgeting and managing your money, such as international payments in 19 currencies. However, you’ll be charged a 2% conversion fee when using your card abroad in a currency you don’t have.
Skrill virtual card
Skrill offers digital wallet services, including a virtual prepaid Mastercard that can be loaded with funds online. You can use Skrill’s virtual debit card online like any other card.
You can pay for purchases at any brick-and-mortar and online shop that accepts Mastercard or a tap-to-pay method. Nevertheless, you can’t make cash withdrawals at ATMs.
However, the funds must be loaded into it before usage and reloaded after use. In any case, the Skrill balance is an option for payment.
Revolut virtual card
Besides a physical debit card, which you can order, Revolut gives you a permanent digital card when you open an account. You can instantly add it to Apple Pay or Google Pay and manage using the app.
However, if one card is not enough for you, Revolut offers multiple single-use virtual cards for different needs. You can use these disposable cards only for shopping online or other specific transactions. This way, you increase security when you spend with new merchants.
With a Revolut account, you can convert 30 currencies at the mid-market rate up to your plan’s restrictions. Because of this, you may find that overseas transactions cost far less than they would with your regular bank.
Monzo virtual card
Monzo offers virtual cards exclusively to Plus, Premium, and Business Plus account holders. Each virtual card has unique details separate from your regular debit card and can be linked to specific ‘Pots’ within the account.
The Plus and Premium account holder can generate up to 5 virtual cards at a time and use them for various purposes. However, Monzo does not charge foreign transaction fees when using its cards internationally, providing the network exchange rate and no extra charges.
These virtual cards can be created and managed through the Monzo app.
FAQ
How do I get a virtual card in the UK?
To get a virtual card in the UK:
- Choose a provider offering virtual cards, like a bank or a fintech company.
- If you’re not already a customer of the chosen provider, open an account.
- Log in to your online or mobile banking app. If you’re using a fintech app, download it from the app store and follow the setup instructions.
- Request a virtual card and follow further instructions.
- Once you’ve completed the setup and have all card details, such as the card number and expiration date, the virtual card is activated immediately or within a short period. However, some providers may require additional verification steps.
- Transfer funds from your linked bank account to the virtual card account and start using your virtual card when spending online, in-app, or making other digital transactions.
Remember that the card details are usually available in your app for easy reference.
Which banks allow virtual cards?
American Express, along with other major banks such as Citibank and Capital One, offers virtual card services to its customers. Amex provides card automation as well as checkout convenience. Users can also receive prizes and rebates based on the status of their accounts.
Can I use a virtual card in shops?
You can use virtual debit cards in the same way as any traditional physical card. You can use a virtual card for contactless payments in stores by adding it to Apple Pay or Google Pay, just like you can use it for online purchases.
Are virtual cards free in the UK?
It depends. Some virtual card services charge a monthly cost, while others charge per-card or transaction fees.
What are the differences between a virtual credit and a virtual debit card?
These virtual cards are distinct digital payment tools, primarily differentiated by their funding source and how they handle transactions. Differently than virtual credit cards, virtual debit cards have:
A direct funding source: A virtual debit card is directly linked to your bank account, typically a checking or savings account. Virtual debit cards are used to make instant purchases and withdrawals from bank accounts. It’s like spending your money, but you can’t go over your limit.
Immediate access to the funds: With a virtual debit card, you have immediate access to your money in your bank account. There is no credit involved, and you can only spend what you have available in your account. Consequently, you won’t incur interest charges on your transactions while using a debit card.
No impact on credit score: Virtual debit card usage typically does not affect your credit score because you’re not engaging in credit transactions or borrowing money.
