Data breaches are too common a threat posed by the increased digitization of the economy. Cyberattacks have hit the likes of big companies, small businesses, and even government organizations, resulting in the leak of personal and financial information of millions of people. When a cyber attack results in your credit card number being stolen, you may be stuck with false charges and a hit to your credit, along with weeks of wrangling with replacements. Luckily, virtual cards support an added robust layer of security.z
Understanding the Risk of Data Breaches
When you enter your physical credit or debit card on the web, the merchant keeps the number of the card, its expiry date, and the CVV in its database. In case such a database is hacked:
- You can sell your card information on the dark web.
- Scammers will be able to carry out unapproved purchases.
- You have to cancel your card and wait till the new one arrives.
The larger the breach, the greater the likelihood of compromise to your information.
How Virtual Cards Shield Your Data?
A digital card is a card generated on a computer and has its own number, CVV, and expiry dates-not your real credit card details. This is the way it can help:
1. Unique Card Numbers
Each of your virtual cards will have the number, and thus your actual account information will be concealed. Even if the hackers get the virtual card number, they would have no way of using it to get your main account.
2. Single-Use & Short Expiration Options
You are able to design one-time-use mental cards or cards that become invalid upon a specific date. This is so as to ensure that stolen information becomes worthless in a short time.
3. Merchant Restrictions
With some platforms, you can lock a virtual card down to one merchant. In case any person attempts to use it at some other point, the transaction would fail immediately.
4. Spending Limits
It reduces the damage that can be caused by the card falling into the wrong hands because the spending limit is low.
Real-World Example
Suppose that you reserve a hotel on the Internet with a one-time virtual card:
- A payment system at the hotel is subsequently compromised.
- The hackers then get hold of your card number, but it has expired.
- Your actual credit card information is kept secure, and there is no need for replacement.
Why Businesses Benefit Even More?
Through online payments, many businesses receive dozens, or even hundreds, of payments every month. When a breach is encountered by one of the vendors, all transactions linked to the rest might get exposed. Attributing various virtual cards to various vendors, companies can only risk their payments to one source as opposed to their whole company account.
Combining Virtual Cards with Good Security Practices
Although the high efficiency of virtual cards has many advantages, it is better not to use them in isolation:
- Make the authentication of financial accounts two-level.
- Shop only at websites that are encrypted.
- Keep an eye on statements to be able to detect unusual activity.
Final Thoughts
Data breaches are not slowing down, and virtual cards place the power in your hands to protect your credit information. They conceal your true information, reduce exposure, and render stolen card data ineffective to criminals.
