Security Demands Spur Virtual Debit Card Adoption
More consumers than ever are turning to online shopping channels to meet their needs during the pandemic, but many are also aware that cybercriminals are looking to capitalize on this stepped-up online activity to steal their card data. These kinds of concerns could encourage shoppers to change up how they make payments. Some are turning to virtual cards to keep their debit account numbers safe, providing shoppers with newly generated codes that can be restricted to work only when paying specific merchants or used just once before expiring. These virtual cards can offer valuable protection, as hackers who manage to steal these codes are usually unable to use them for spending sprees.
Businesses are also examining virtual card options that can allow employees to make company payments securely and conveniently during the pandemic. Paper checks are more difficult to use as many professionals work from home, prompting a need for new payment tools. Firms are also prioritizing security as they transact online more heavily as well.
The November Next-Gen Debit Tracker(R) details the latest virtual card trends and developments as consumers and businesses seek payment tools better suited to their new transaction environments.
Around The Next-Gen Debit World
Some parents are aiming to educate their children about finances by giving them spending money without worrying about providing payment methods that could boost their risk of COVID-19 infection. This is leading some families to put their children’s funds on virtual cards instead, according to U.S.-based FinTech Jassby. The company launched a virtual card aimed at minors that is intended to support contactless transactions.
Consumers are also thinking “virtual” when it comes to gift cards. Recent studies have found significant rises in digital gift card sales during the pandemic as shoppers seek to support local businesses with gift card purchases and give recipients financial presents that do not need to be redeemed in stores.
Virtual debit cards are drawing interest internationally as well, with Pakistani Bank Alfalah recently debuting such a product. The launch is intended to allow customers to receive digitally issued cards that allow them to skip bank branch visits during the pandemic. The virtual nature of these payment tools allows them to be issued and activated immediately once the bank approves applicants.
Find more on these stories and other headlines from the space, read the Tracker.
Virtual Cards To Bring Greater Security To Transactions
Major data breaches typically stick in consumers’ minds, and many are worried about keeping their debit card and account information safe. A mistake on just one merchant’s part can compromise consumers’ accounts, meaning shoppers must consider whether each business with which they transact will raise their risks. These kinds of concerns could drive demand for virtual cards that allow shoppers to transact without handing out sensitive details, said Kelley Knutson, president of prepaid debit card provider Netspend. In this month’s Feature Story, Knutson explained how virtual cards are leading to safer eCommerce, as well as what card providers must do to offer digital onboarding experiences that securely vet new card applicants without being overly burdensome.
Read that story in the Tracker.
Deep Dive: How Virtual Cards Can Reduce eCommerce Frictions
Virtual cards are expected to be used for $1.6 trillion in spending this year and to reach $5 trillion by 2025. Consumers and businesses are seeking ways to make online payments more easily and securely during the pandemic, and this is leading some to examine virtual cards with renewed interest. This month’s Deep Dive explores the factors driving virtual card adoption as well as the obstacles that must be overcome to allow the space to grow even more.
Find the Deep Dive in the Tracker.
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