Thanks in large part to the worldwide pandemic, there has been a significant increase in the desire of payment card holders to have a digital experience with them. Because of quarantine restrictions, this was initially a necessity. But as cardholders began to understand and appreciate the benefits of using payment facilities online, their desire to the bank in virtual reality increased significantly.
Digital account opening and payment for goods and services by contactless mobile wallet turned out to be the most popular services among users of payment means. These services are actively used by more than 60% of the surveyed bank cardholders.
Despite the growing popularity of virtual cards, half of all retail transactions are made with physical cards. Today, the ratio of using both payment methods is 1 to 1, but the popularity of virtual cards is gaining momentum. To understand which type of card you prefer, let’s take a closer look at the features and advantages of both types.
Physical card: features, advantages and disadvantages
A physical card is a piece of plastic with a chip that gives holders access to their funds in the account. It has a wide range of features, but it has challenges. Here are just some of the main drawbacks:
- it can be lost, forgotten or stolen, in which case you have to spend time replacing or blocking the card;
- swindlers have known all the peculiarities and weaknesses of physical cards for a long time, so they have developed many methods to get hold of them;
- limited number of ATMs do not allow to use of physical cards in full;
- additional commissions are stipulated in case of withdrawal of funds from ATMs of other banks;
- fees for keeping own funds on the account, which banks of the issuers can charge for maintenance of the card on a monthly or annual basis.
Using plastic cards is straightforward. You attach it to the terminal or pass it through a particular slot. But every holder of a physical card at least once in his life had an awkward moment when the airport refused to accept the card. The reason may be the problems with the card itself or the lack of connection, but until the cause is not found, any card user will feel extremely uncomfortable in this situation.
Peculiarities of a virtual card
A virtual card is a convenient means of payment that provides quick and safe access to money. It is a full-fledged method of payment that has no physical medium but has all the attributes of a physical plastic card:
- number;
- validity period; – three-digit security code (CVV);
- three-digit security code (CVV).
The cardholder has at his disposal the data he needs to pay for goods and services. An E-card can be attached to the electronic wallet. It can be used for contactless payment via cell phone in retail outlets, so a smartphone can be considered a carrier for a virtual card.
A virtual card is needed to pay for goods and services on the Internet. It can be used to make payments in the digital space as safely as possible. You can connect this card to e-wallets. It can be used to pay for purchases in a regular store if the cardholder has a smartphone that supports contactless payment technology.
In addition to the virtual card, you can order its physical plastic copy. The plastic document can be used to pay at the points of sale and withdraw cash even if the contactless method is unavailable.
Let’s list the main advantages of virtual cards:
- it is issued almost instantly. There’s no need to go to a bank branch and spend time talking to clerks to get it. A particular platform will issue an electronic card in a couple of minutes after receiving the application;
- can be used all over the world. It is a universal means of payment that is accepted by outlets all over the world. You can withdraw funds from them at an ATM of almost any bank;
- minimal maintenance costs. The issuing company saves on purchasing materials for the physical carrier, and the cardholder does not pay for maintenance. Often, other transactions on the virtual card are made without additional commissions and fees;
- functionality. The card is issued instantly and is immediately active. It can be used within the set limit immediately upon receipt;
- security. Virtual cards use 3D Secure double authentication technology designed to ensure the safe use of the card and complete confidentiality of online payments.
Using a virtual card will never embarrass its owner. Its reading has no problems, which is typical for plastic carriers. In addition, a virtual card, unlike a physical card, can’t be forgotten or lost, and criminals can’t steal it.
We should note that there are problems with virtual cards. But the issues, in this case, do not concern the payment tool itself but access to it. The digital cardholder will not be able to use it if the point of sale has weak Internet. The virtual card is not available to owners of older models of phones. To fully utilize its functionality, you need to get a more or less new smartphone model.
If you plan to use a contactless payment function abroad, ensure that you have enabled data transfer in roaming and have enough money on your balance. In several foreign sales outlets, paying with a virtual card may require its number and CVV to confirm the transaction. You should be prepared for this and respond appropriately to the merchant’s requests.
What are the prospects?
To stay competitive, issuing companies need to consider the desires of their customers. And that means offering virtual cards in addition to physical cards. Complementing the range with digital cards will also have a positive impact on the company itself:
- increase customer traffic by 10-15%;
- it will reduce the level of fraud with the cards;
- reduce the cost of customer service;
- increase the volume of transactions;
- increase customer satisfaction.
Despite the growing popularity of virtual cards, experts predict that physical cards will retain their competitive position and will remain the leaders in use in retail outlets. The most in-demand will be the services of companies that can offer customers the ability to issue cards instantly.
Wallester already provides a platform for the instant issuance of physical and virtual cards for all types of businesses. You can learn more about the venue and the company’s services at wallester.com. Wallester provides the end user with a unique opportunity to combine the best virtual and real worlds in one simplified solution. The platform allows you to issue debit, credit and prepaid cards in physical and digital representations.
With the Whitelabel solution, you can create branded cards and popularize your company. The Wallester platform easily integrates with your existing system, allowing you to market any card program quickly.
A comprehensive solution from Wallester can satisfy any desire of payment cardholders and offer them both traditional plastic cards and modern virtual cards. The future leaders of the financial market will be those who can offer an integrated card program. Only such solutions will be able to meet the growing needs of modern payment card users fully.