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What is a Virtual Debit Card?

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  • Written By: Luke Arthur
  • Edited By: Heather Bailey
  • Last Modified Date: 29 November 2016
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    2003-2016
    Conjecture Corporation
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A virtual debit card is a tool that can be used in place of a regular debit card. With this type of system, a new credit card number is going to be generated for users every time they make a purchase. A virtual debit card is a good way to protect financial information, it is convenient, and it helps individuals limit their liability.

Virtual debit cards are being offered by more and more financial companies. When an individual wants to make a purchase with a virtual debit card, the company is going to provide him or her with a unique debit card number that is different from the number on his or her actual debit card. The individual can then use that debit card number to make a purchase and the purchase will be linked to his or her account.

The primary purpose behind this type of debit card is to protect financial information. When using this type of virtual debit card, an individual is not going to have to expose any personal information to a business. He or she can simply enter in this new credit card number and the transaction will be processed. This significantly lowers the chances of someone being able to steal the numbers from a debit card.

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Even though this process might sound complicated, it is very simple. The process typically involves the user remembering a personal identification number (PIN) to identify himself. When a merchant that accepts this type of debit card is available, the user will enter a PIN into a form and a debit card number will be generated. The individual can then use the new debit card to make a purchase just as he or she would with a regular debit card.

One of the big benefits of using a virtual debit card is that it significantly limits the liability of the individual who uses it. With a traditional debit card, an individual may be liable for $50 US Dollars (USD) if he or she reports an incident within the first two days of losing his or her card. If the individual does not report the incident within 60 days, he or she could have unlimited liability on any fraudulent purchases made with the card. With a virtual debit card, this is not going to be the case. When people use virtual debit cards, they are not going to have to worry about any amount of money being paid back.

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