According to data from Zion Market Research, the global virtual credit card market was valued at $9.31 billion in 2022 and is expected to reach $42.4 billion by 2030^[1]. As this payment method becomes more common, knowing how and where to use it can help you take full advantage of its security and convenience options. 

In this article, we'll explore virtual credit card acceptance networks to show you how these cards are accepted and why some businesses might opt not to do so. We'll also explain why choosing the right virtual card provider is crucial for getting the most out of your virtual cards.

What Is a Virtual Credit Card?

A virtual credit card is a payment method provided by banks and financial institutions for online and other card-not-present (CNP) transactions. Virtual credit cards are issued under the umbrella of credit card networks, such as Visa^®, Mastercard^®, and American Express^®, which also play a role in facilitating payment card acceptance and processing.

Virtual credit cards work similarly to regular credit cards. The major difference is that instead of having a physical form, a virtual credit card exists only digitally and includes a unique randomly generated card number, expiration date, and CVV code.

When you make transactions with your virtual credit card, the merchant accepting sees only the virtual card's number, not your actual card number. This provides a layer of security that protects your financial information in case of theft, making virtual credit cards a safer option than traditional credit or debit cards.

How Are Virtual Credit Cards Accepted?

Virtual credit cards are accepted in the same way regular credit cards are. Here's how you can use them: 

• Online payments—To make a purchase, enter your virtual credit card number, expiration date, and CVV code at checkout.
• Subscription services—Provide your virtual credit card details when setting up a subscription.
• In-store purchases—Enter your virtual credit card information into a digital wallet such as Apple Pay or Google. Some virtual credit cards don't have this feature.
• Phone orders—Provide your virtual credit card information when purchasing the phone. 

The underlying process of accepting virtual credit cards is similar to how credit cards are generally processed. It involves multiple steps that could be simplified to:

• You initiate a payment by providing your virtual credit card number at checkout. 
• The virtual credit card details are sent to the merchant's payment processor.
• The payment processor then forwards the transaction details to the credit card network.
• The network verifies the transaction and sends it to the issuing bank for authorization.
• The issuing bank checks for available funds and potential security issues and either approves or declines the transaction. 
• If the transaction is approved, the merchant can complete the sale.

Why Some Businesses Don't Accept Virtual Credit Cards?

Just like a regular credit card, your virtual credit card can only be accepted by merchants who use your credit card network to process payments. Even though all three major networks are widely used in the United States, some vendors opt not to accept cards from certain networks. The two primary reasons for this are:

1. High processing fees—A vendor can determine that a certain network's card processing fees are too steep.
2. Partnerships—Some vendors form exclusive partnerships with specific card networks, accepting only their cards. 
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Even though merchants who support online, contactless, and phone payments should accept your virtual credit card if they process cards from your network, that isn't always the case. For example, a common practice in the car rental industry is to ask customers for a physical credit card, even if contactless payment is available. Car rental companies might do this for identity checking and as an anti-fraud measure. 

You might come across the same requirements when checking into a hotel, too. Even if they allow you to reserve your room online, some hotels might still require you to present a physical credit card at check-in. 

How Virtual Card Providers Make Card Usage Safer

Virtual card acceptance leads to safer online transactions, and virtual card providers are integral to the process. Some additional safety features they offer include:

• Separate card for each transaction—You can create a card that's valid for one transaction only. 
• Limits on transactions—You can choose the maximum amount a merchant can bill you, and any attempt at charging over that limit will be declined.
• Data encryption—Virtual card providers might need to store your personal data, but they usually employ advanced encryption to protect it against theft. 

If you're looking for independent providers that offer these features and more, consider Privacy.

Why Privacy Cards Are the Best Option for Virtual Cards

After linking your debit card or bank account to Privacy, you can create virtual cards with two major payment card networks, Mastercard and Visa. You can use Privacy Virtual Cards anywhere in the world where U.S. cards from those two payment networks are accepted. 

Privacy lets you create three types of virtual cards:

Privacy lets you set spending limits and pause, unpause, or close your virtual card anytime without impacting the underlying funding source. 

1. Spending limits—After you set a spending limit, Privacy will decline all charges exceeding that amount. This feature protects you against intentional and accidental charges, such as hidden fees and unannounced price hikes. 
2. Card pausing and closing—Privacy will also block further charge attempts on a closed or paused card. If you want to stop a subscription, for example, you can pause your virtual card to avoid unwelcome charges while undergoing the cancellation process. 

Privacy Makes Online Shopping More Convenient

Privacy offers several features that make your online shopping experience more seamless. The Privacy Browser Extension, available for Chrome, Edge, Firefox, and Safari (including the iOS version), autofills virtual credit card numbers to facilitate a faster checkout process. 

After installing the Privacy App on your Android or iOS device, you can monitor card activity, set spending limits, and pause or permanently close your cards on the go. Privacy will send you real-time push notifications whenever your card is charged or declined, which allows you to quickly react to any unusual activity.

Other Privacy convenience features to enjoy include:

• 1Password integration—The integration allows you to manage your virtual cards and passwords from a single dashboard within the password manager's browser extension.
• Card Notes—You can add notes to your virtual cards, such as the merchant's name, product details, or the next charge date, for easier spending tracking and organization.
• Shared Cards—With Privacy, you can securely share virtual cards with friends and family to share your budget or manage common expenses. 

Get a Privacy Virtual Card in a Few Clicks

You can request Privacy Cards in four easy steps:

1. Visit the signup page
2. Fill out the mandatory Know-Your-Customer (KYC) details 
3. Connect your debit card or checking account  
4. Request and generate your first Privacy Card
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Privacy offers four monthly plans to choose from:

Privacy is available to U.S. residents with a checking account at a U.S. bank or credit union who are 18+ years of age.

References

^[1] Zion Market Research. https://www.zionmarketresearch.com/report/virtual-credit-card-market, sourced November 4, 2024

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