Everything has gone temporary nowadays. You get one-time paper cups, single-use latex gloves and even car floor mats made out of paper. Chances are that you are eating out of Styrofoam plates. Like all things, credit cards are also going the limited usage way. Temporary numbers used in credit card transactions are now specially generated to protect the real or permanent credit card number.
Such temporary numbers which are used in credit card transactions are known as single-use cards or virtual account numbers. These cards have a shorter life span and restricted spending powers. It is apparent that even if a corrupt online merchant or a hacker tries to illegally do a transaction, they cannot do anything after a certain amount or a certain time of the day. The money limit and time duration is dependent on how that specific number is created.
Benefits of such numbers
The benefits of such temporary numbers have been corroborated by Edgar Dworsky of consumerworld. org, a resource guide for internet consumers. He said that the user gets the advantage of a feeling of security. This happens as the real, or genuine credit card number is not typed in. The merchant thus does not get any window to a customer’s complete credit line.
Such virtual credit cards must not be confused with the prepaid cards. The latter is filled and replenished with money to make them functional. Virtual credit cards, on the other hand, act like masks, blocking hackers or any online vendor from viewing the real account number.
Not all fixed
A number of credit card issuers like Citi (NYSE: C) and Bank of America (NYSE: BAC) are already offering virtual credit cards. The latter has brought out ShopSafe, its virtual card program. This gives an extra security layer when you make purchases with a Bank of America credit card over the internet.
This increase in security is unsurprising considering the fact that credit card frauds are now being carried out to the tune of $5.47 billion (Nilson Report). Frauds are heavily bleeding the industry. However, these temporary financial fixes are not a permanent cure for all. To give an example, if you want to return your purchase, it can be very hard to do. There are other problems too. Many consumers have been reportedly charged above their credit limit. Dworsky concurs, saying that users are given a false aura of support.