Should You Get a Virtual Prepaid Card? Here’s What To Expect
Virtual cards are becoming one of the most popular digital payment methods for both consumers and businesses. According to the latest study released by Juniper Research, the global value of the virtual card market is expected to jump from $28 billion to $121 billion between 2022–2027.
While virtual cards are typically linked to a bank account or an existing debit or credit card, a virtual prepaid card is loaded with funds beforehand.
In this guide, we will explain how virtual prepaid cards work and review top solutions in the market. We cover aspects like pricing and available features to help you make an informed decision.
Virtual or Online Prepaid Cards—An Overview
Virtual (prepaid) cards are online cards with temporary credentials—a 16-digit card number, security code (CVV value), and expiration date. They offer the convenience of regular payment cards while masking your actual banking and card data during transactions. This added layer of protection is crucial for preventing e-commerce fraud, which has been growing at the rate of 18% globally.
Source: iMin Technology
Virtual prepaid cards carry a fixed balance and can be funded via a bank transfer or with an existing credit or debit card. Customers typically have the option to reload cards after exhausting the balance.
Features of Virtual Prepaid Cards
Features of virtual prepaid cards include:
- No credit checks—Getting a virtual credit card sometimes requires an additional credit check, especially if you’re requesting the service from a bank or a financial institution. Virtual prepaid cards are typically offered by independent providers and require no minimum credit score or banking history data.
- Pre-fixed balance—Virtual prepaid cards usually have a preset balance, which limits the damage if a fraudster steals the credentials from a merchant's website. The limited balance also makes the card suitable for sharing with a family member or an employee and preventing overspending.
- Availability to unbanked customers—Virtual prepaid cards can be obtained by individuals or businesses without a bank account. In most cases, the customer only has to fill out an online form, pay the required fees to get the card, and load funds onto the card to start making payments.
- Option to reload or top up—Most prepaid cards can be topped up with funds for further purchases, although the prepaid cardholder may need a bank account or payment card to transfer the money. Certain virtual card providers allow reloading with alternative sources like digital wallet cash or cryptocurrency.
Keep in mind that the features of a prepaid card vary depending on the virtual card provider. It’s best to read the user agreement and confirm which services you can expect.
Where To Get a Virtual Prepaid Card Online—3 Options To Consider
Here are three of the top prepaid virtual card providers evaluated based on setup, features, and pricing:
The information in this article is current as of June 13, 2023.
Skrill
Skrill offers digital wallet and international money transfer services in 40 currencies[1] and is often recommended as an alternative to PayPal.
Skrill virtual prepaid cards are available to users who have a Skrill wallet account. They can apply for a new card by following these steps:
- Logging in to their Skrill account
- Going to the Skrill Card tab
- Following the prompts to enter the required details
- Ordering the card
Skrill virtual cards can be funded with the existing Skrill wallet cash or any local/non-local payment method[2]. The vendor currently offers instant virtual Visa® prepaid cards to U.S. customers, and there is no extra service charge for ordering the first card[3]. However, there are costs associated with maintaining a Skrill account, including a service fee and account levels fee[4].
Source: Karolina Grabowska
Once the virtual card has been generated, users may be asked to activate it before they can start spending. They can customize how long they want to keep the card active[3]. The benefits of Skrill virtual cards include:
- Apple Pay® integration—Skrill cards (virtual or physical) can be integrated with Apple Pay and used across all Apple® devices[5] .
- Skrill’s “Lock” feature—Skrill offers a “Lock” feature to freeze the entire account[5]. This option can be useful if a user suspects their virtual card has been compromised.
US Unlocked
US Unlocked offers a virtual prepaid card service for people from abroad who want to shop with U.S. retailers. The platform creates instant virtual cards with U.S.-based shipping and billing addresses, which is required by many local sellers. The cards can also help acquire country-specific subscription services, such as HBO Max or Netflix.
Here’s how to buy a virtual prepaid card online with US Unlocked:
- Sign up for a US Unlocked account
- Enter contact and home address details
- Verify your email address
- Pay the one-time enrollment fee of $15[7]
- Complete the profile
- Go to the card purchase page
- Enter the country, load amount, and payment method
- Pay the load amount and requested fee (3%–5%) to generate the card
Users can create multiple virtual prepaid cards, but they can only load an amount of $3,500 per account[6] and must provide valid ID proof for transactions above $500[7].
US Unlocked also enables users to create merchant-locked cards[7], which reduce the risk of misuse in case of a data breach. The benefits of US Unlocked cards are:
- Customizable spending limits[7]
- Easily accessible transaction history (with date and time stamps)[7]
While US Unlocked is a convenient option for non-U.S. citizens, the service comes with several fees. Users have to pay a fee for every load, transaction, and unload, as well as a monthly maintenance fee of $3.50[8].
Netspend
Netspend is a popular financial service provider, mainly offering debit card and prepaid card accounts to underbanked customers. These cards can be funded directly through government benefits or paychecks[9].
Netspend offers reloadable Visa and Mastercard® virtual prepaid cards to customers with an existing physical prepaid card from the company[9]. The virtual card is not an identical visual representation of its physical counterpart—Netspend allots up to six temporary virtual card numbers[9] to a single account to ensure the actual card credentials remain private.
Users can open a Netspend account by visiting its Online Account Center or a physical store and filling out the signup form. While they don’t have to go through credit checks, in-store enrollments can cost up to $9.95[10].
Upon receiving the physical prepaid card (typically within 10 days[12]), users can activate their virtual card by signing in to their account online and requesting a temporary Netspend card. Along with virtual cards, Netspend offers several bank-like features, including:
- Transaction alerts[11]
- Cashback with select merchants (under the Payback Rewards plan)[11]
- Mobile (app-based) access[11]
In case a Netspend virtual card is compromised, users can immediately cancel their card without losing funds from the account[9]. The physical prepaid card remains unaffected.
Source: Frugal Flyer
There are monthly fees, inactivity fees, and transaction fees[10] associated with having a Netspend account with virtual prepaid cards.
Virtual Prepaid Cards May Not Be the Best Payment Solution Online
Physical prepaid cards are usually preferred by users who want to spend within preset limits, but when it comes to virtual prepaid cards, there are a few disadvantages, including:
- Multiple fees
- Limited card acceptance
- Cancellation issues
Multiple Fees
Virtual prepaid card services can be expensive because of multiple fees. Some of the common charges include:
- Activation fees
- Load, reload, and unload fees
- Transaction fees
- Account maintenance fees
- Inactivity fees
Because many vendors charge a percentage of the amount loaded or spent, the cost of the prepaid virtual card service can add up quickly. In comparison, bank-linked or credit-card-linked virtual cards usually have more straightforward costs and fewer or no fees.
Limited Card Acceptance
Virtual prepaid cards are often rejected when being used to pay for:
- Subscription and free trial services—If you’re trying to sign up for a new subscription or a free trial service, you may need a virtual credit or debit card. Prepaid cards are usually rejected by subscription-based merchants as they’re incompatible with recurring payments.
- Large transactions—Most prepaid card providers dictate a maximum load value for the card, making it impossible to complete transactions beyond that capacity. Similarly, the payment gateway may also reject purchases equal to the card balance on prepaid cards, as a specific amount has to be reserved for transaction charges.
Cancellation Issues
Bank-linked virtual cards are easier to close than prepaid ones. For example, if a hacker gets hold of your virtual prepaid card, you can lose the entire balance on the card if there’s no way to cancel it. Some service providers offer card cancellation options, but requesting a credit for the unused balance can be challenging or require additional fees.
In the case of bank-linked virtual cards, closing a card is easy and usually does not come with extra charges. Since these cards draw funds from your checking account/credit line in real time, you do not lose money upon cancellation.
If you need an alternative to a virtual prepaid card that has fewer fees, greater acceptance, and broader card protections, consider virtual card providers like Privacy.
Manage Online Payments Seamlessly With Privacy Virtual Cards
Payment security and convenience go hand in hand with Privacy, a BBB®-accredited virtual card provider. The platform offers virtual cards to individuals over 18 years old with a U.S.-based bank account or a debit card. Signing up for Privacy doesn’t involve a credit check.
Privacy Virtual Cards have unique credentials that conceal your card details and other identifiable data during transactions.
While Privacy Cards are bank-linked virtual cards, you can enjoy more features than with an average virtual prepaid card, such as:
- Creating customized Single-Use and Merchant-Locked Cards
- Closing and pausing cards instantly
- Checking out faster by using the Privacy browser extension
Source: Christiann Koepke
Enhance Security With Single-Use and Merchant-Locked Cards
Privacy’s Single-Use Cards close within two minutes of completing the first transaction, preventing the card number from being misused in the future. Merchant-Locked Cards can be used multiple times but only at one designated merchant.
These two options make Privacy Cards suitable for transacting with unknown stores and making recurring payments with trusted merchants. Each card can be set with a spending limit to control overspending. Sign up for a Privacy account and customize your first virtual card!
Check Out Faster by Using the Privacy Browser Extension
You can checkout even faster with Privacy’s Chrome and Firefox browser extension. With the extension, you can:
- Create a new virtual card in two clicks during checkout
- Auto-fill the virtual card number, expiration date, and CVV, enabling you to complete the purchase quickly without looking for your wallet or typing in card numbers
Close and Pause Privacy Cards Instantly
You can close or pause Privacy Cards with a single click without affecting your real bank account or card. The option is ideal for:
- Limiting card misuse in case of a security breach—If a hacker gets hold of your virtual card data, you can close the card instantly and prevent future card abuse.
- Stopping a subscription service from making unwanted charges—If a card is paused or closed, Privacy blocks the unwarranted charges. Still, you must cancel the subscription service working directly with the service provider.
Privacy Cards—Setup Process and Control Features
You can request Privacy Cards instantly once you sign up for a Personal account. Here are the steps involved:
- Navigate to the signup page
- Enter standard KYC information
- Link a bank account or debit card of your choice
- Request and create a virtual card
Privacy’s Personal plan currently allows you to create 12 new virtual cards every month and is free for domestic transactions. You can also opt for a paid Pro or Premium plan to set up more cards and enjoy additional benefits, including cashback.
You can review and manage your cards and transactions on your personal Privacy dashboard.
Privacy’s services can also be accessed on iOS/Android apps. App users can create virtual cards on the go and get real-time notifications for every account activity.
Source: Christina
Privacy is held to the same strict security standards as a bank. The platform also offers a free 1Password integration for users who desire an efficient way to manage their financial data and account passwords.
References
[1] Skrill, https://www.skrill.com/en/transfer-money/, May 2023
[2] Skrill, https://www.skrill.com/en/skrill-news/inside-skrill/virtual-prepaid-card/, July 8, 2020
[3] Skrill, https://www.skrill.com/en-us/skrill-visa-card/skrill-virtual-visa-prepaid-card/, May 2023
[4] Skrill, https://www.skrill.com/en-us/siteinformation/fees/, Mayb 2023
[5] Skrill, https://www.skrill.com/en/skrill-news/inside-skrill/five-benefits-of-a-virtual-prepaid-card/, July 7, 2022
[6] Tracxn, https://tracxn.com/d/companies/us-unlocked/__TBSksOWpfhqCkCnA2wCvsFverp4_7tTEDX39hgucokQ, April 20, 2023
[7] Quratulain, https://tech-vise.com/us-unlocked-usa-shopping-from-abroad/, November 6, 2022
[8] US Unlocked, https://www.usunlocked.com/pricing/, May 2023
[9] Netspend, https://www.netspend.com/prepaid-debit/features/virtual-cards, May 2023
[10] Netspend, https://www.netspend.com/agreements/730462421_web, May 2023
[11] Netspend, https://www.netspend.com/prepaid-debit/features, May 2023
[12] Netspend, https://www.netspend.com/help/faqs, May 2023
