Credit Card News: Technology

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Tech Companies Are Hoping Customers Will Embrace Virtual Credit Cards
19 Jun
Although more people are using mobile wallets and moving away from using cash or credit cards as their go-to payment method, consumers have still shied away from using virtual credit cards for the majority of their purchases. But companies like Switch, Inc. are hoping to change that.

“Until now, activating merchant-specific virtual cards required cardholders to laboriously create and update every merchant one-by-one,” says Chris Hopen, CEO of Switch. His company has created the CardSavr API, which automates the process of uploading and securing credit cards with merchants in one user-friendly step. “We make it all invisible to cardholders. They can reap all of the benefits of virtual cards without being bothered with the set-up or updating details.”

Hopen says Cardsavr will make virtual credit cards more accessible to the average customer and will enhance security and convenience for online shoppers, as well as benefiting rewards programs, private label cards, and person-to-person payment programs.

Virtual card use has stalled

Although the use of mobile wallets and virtual credit cards gives customers the benefit of better protection against fraud and greater convenience, adoption has been slow and has stalled. The increased usage of the technology, however, will be good for merchants as well as consumers, says Hopen.

“Making it effortless and immediate for customers to tap into the advantages of virtual cards will also make it easier for issuers to manage and grow their businesses. It builds a healthy virtual payment ecosystem for everyone.”

One of the advantages of virtual credit cards over physical ones is that they can be replaced and reissued instantly in case of fraud, without having to wait for a new card in the mail. However, virtual cards are also less vulnerable to fraudulent use, since they are merchant-specific and can only be used for transactions at certain places and can include spending limits.

Mobile wallets, such as Apple Pay and Google Pay, are digital wallet platforms and online payment systems that allow users to make in-app and tap-to-pay purchases using their Apple or Android phones, tablets, or watches. As consumers’ comfort levels with the technology increase, adoption is sure to speed up.

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