Virtual Cards – A safe way to purchase online

Whether it is from Amazon India or Flipkart or Snapdeal or Aliexpress, I buy from all of them a lot and regularly – bordering on making me an online shopaholic.

Credit Card vs Debit Cards

I prefer to use Credit Cards instead of Debit Cards. Let me be clear, credit card interest rates are brutal and horrific. I don’t use the credit offered by Credit Cards beyond the free 30 day period – I ensure I settle 100% (sometimes round it off over and above) of the amount due on receipt of the statement every month.

With Credit Cards, the dispute/deniability of a fraudulent transaction (say done online) is a lot easier than Debit Cards. Basically, in case of a fraudulent or incorrect transaction (money withdrawal or store purchase or online payment) done with a debit card, the money gets immediately debited from your account and you need to hassle with the bank to get it rectified (or returned). In the case of the transaction done with a credit card there are no such immediate debits, assuming you have complained to the bank within the window as advised (RBI/2017-18/15) by Reserve Bank of India, in all likelihood by the time of your next credit card statement, the bank would’ve reversed the transaction with no loss of money in real terms for you.

Refer,  these articles from the Pioneer and India Today for details.

Withdrawing cash: If and when I am forced to withdraw cash with a credit card, I ensure I have deposited money to the Credit Card account in advance (yes, you can pay more than the due amount to your credit card account) and then withdraw it through the ATM – the only sensible use case for doing this is will be when I am travelling and I have lost my Debit Card. In case of cash borrowed through ATM with a Credit Card, the interest starts kicking in immediately on withdrawal and doesn’t have the interest free 30 days window available for purchases done with Credit Card.

Other options to pay online

I try to minimise sharing of my credit card details (I never use my debit card online) and when available I pay for the purchases through a reputed payment gateway (or wallet) like PayPal or PayTM or Amazon Pay and so on. When that’s not available I do UPI transaction using the BHIM app or pay directly from my bank account (Net banking) – this way, the target site can’t replay the transaction or debit additional money from my account without my explicit intervention (by needing me to enter a password and an OTP).

With these small precautions I limit to the extent possible, the sites where my card information gets stored and also I get to see the transactions I do in a few centralised places. Most often, smaller sites or one-off product shops, don’t give you a wallet choice and they only accept credit card information. Also, there are times when my son wants to buy something online and I don’t want to waste my time doing the whole shopping for him – sharing my credit card details to my son will be illegal, as even sharing to your spouse is not allowed. To handle these scenarios, master card and visa card have been offering for a few years now, what is called Virtual Cards and they have been available in India as well.

Virtual Cards – the safest way

The way these virtual cards work is, you login to your bank’s website and purchase one for a predefined value, a prepaid card. You will be presented with an image or an email, with details of a 16 digit number, expiry date and a CVC code. Using these you can buy from any online site where the physical presence of a card (like in a merchant place or a restaurant) is not needed. For the site from which you are buying, the virtual card looks and behaves like a standard credit card. The only difference being, virtual cards are single-use only. After the purchase (successful transaction), any balance amount in the virtual card will be refunded back to your account by your bank in a day or two. With Virtual Cards, even if the site where you made the purchase gets hacked or the owner of the site reuses the card information without your knowledge, it will fail.

Awareness of the existence of this product (virtual cards) is almost NIL with the bank staffs I checked with.

Many of the Banks in India, offer these virtual cards from their official website – for example, I saw it available online from SBI, Kotak Mahindra Bank, HDFC Bank and ICICI Bank. Each of them gives a different name like Net Card or Prepaid Card or Virtual Credit card or Netsafe, but the product is the same.

Virtual Cards or Net Cards

I have been using these virtual cards from my bank for the last few months – I find using them to be easy and feel safe. Give them a try next time you want to buy something online from one of the many small sites.


  • R.Karthok

    Further to this article and the comments exchanged wanted to use the VCC for getting my Netflix account activated which wad inn old storage just because NF does not allow you to create the account without sharing the card details. I found this to be awkward when other players use all forms of payment including the wallets and UPI based authentication.

    With an aim to end the tussel bt me and NF, I created an SBI VCC and tried to pay and start my account in NF. Alas…this payment mode cannot be accepted was the message. Tried different combinations and net-net same result. Queried in Google with the issue and out came a response in Quora that NF recognises VCC and does not accept….Back to square one.

  • R.Karthik

    You may also want to check Phonepe app. I recently moved away from Patym to Phonepe. It is from Yes bank one of the most tech savvy banks and the Phonepe app is also now the Official wallet for Flipkart. It also leverages strong integration with BHIM.

    The main reason for the switch over is the host of cashback offers in all areas be it transport(cabs,flight,train) Offline stores ,online sites. Main use is with Hungerbox in my office cafeteria. I pay for 4 days for my lunch and phone pe pays for the fifth day. :)

  • R.Karthik

    Cool stuff. This was useful.
    Same with me aswell in terms of Purchase practice , now completly with BHIM. May be an article on BHIM will also help as still people are unaware.(don’t recollect if you had done it earlier).

    On a interesting note Bangwood asks for your PAN and Aadhaar no. for Infian users and checks for authentic user. Had this experience very recently followed by a discussion with its customer service

    • venkatarangan

      I had an article on BHIM two years ago:

      Nowadays, I use UPI through PayTM app, which is super easy and better than the standalone BHIM App – internally I suppose it uses BHIM SDK. Through PayTM/UPI I pay for many of monthly expenses – Milk, NewsPaper, Oil and also do ad-hoc bank transfers to new parties, easier here than doing it from the bank website, which requires party registration and steps.

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