The Rise of Virtual Credit Cards: Transforming Online Payments

Virtual credit cards were not created solely to bypass limitations. In fact, as online shopping has grown and the risk of credit and debit card data theft has increased, people have turned to virtual cards for small online purchases. Imagine you want to give your child a card for online shopping: a virtual card is ideal. Without handing over your main, high-balance card, you give them a personal card with a defined, rechargeable balance.

What Is a Virtual Credit Card?

A virtual credit card is a non-physical card that makes it easy to pay on various international websites for subscriptions as well as digital and physical products. It can be used on most reputable global sites. Depending on the funds you load onto it, it has a defined balance and spending limit.

How Does It Work?

At LOIS Pay, after completing identity verification (KYC) and submitting documents such as a passport, residence card, or ID card, you can request your virtual credit card. Before paying any fees, you must wait until your verification is approved by LOIS Pay specialists.

You can set the spending limit, number of uses, expiration date, and sometimes even restrict the card to specific merchants.
You then pay with the virtual card details; the amount is deducted from your main card/account, but the merchant never sees your real card number.
Once the limit is reached or the validity period ends, the virtual card automatically becomes unusable.

Benefits for Users

Security & privacy: Your primary card details aren’t exposed, reducing the risk of data theft and misuse.

Cost control: Limits on amount, time, and allowed merchants help keep spending in check.

Subscription management: Issue a separate card for each service; cancel easily by disabling that card.

Easier international purchases: Some providers let you choose the currency and set currency-specific caps.

Fewer refund hassles: With constrained amounts or merchant locks, unintended charges are less likely.

Benefits for Businesses

Lower fraud and chargebacks: Merchant-locked or single-use cards reduce risk.

Better checkout experience: Security-conscious customers are more likely to complete payment.

Simpler reconciliation & internal control (for companies): Employee virtual cards with category/limit rules make financial reporting clearer.

Limitations & Challenges

Limited acceptance with a few merchants: Some stores or gateways may not accept virtual cards. However, these cases are quite rare, and in most situations you won’t face issues.

Recurring payments: For long-term subscriptions, set expiration and limits carefully.

KYC & regulations: Requirements and legal restrictions vary by country.

Fees & FX rates: Some providers charge issuance or currency-conversion fees.

Comparison with Adjacent Technologies

Network tokenization: Card data is converted to secure tokens by the networks (Visa/Mastercard, etc.). A VCC is independent and issues a fresh card number.

Dynamic CVV: Only the security code changes; with VCCs, the entire card is new.

Mobile wallets (Apple Pay/Google Pay): Mostly used for in-person/in-app payments; VCCs focus on the web and offer finer-grained controls.

Popular Use Cases

Free trials: Low limits plus short expiry to avoid unintended renewals.

Unfamiliar merchants: Restrict amount/merchant to reduce risk.

Travel & cross-border online purchases: Manage FX rates and unexpected fees.

Organizational expenses: Issue project-based or per-employee cards with limits and reporting.

Choosing the Right Provider

Consider these criteria:

Card types: Single-use, multi-use, merchant-locked.

Controls: Amount cap, currency, expiry, allowed merchants, number of transactions.

Fees & FX: Transparent pricing and daily/monthly caps.

Currency & country support: International issuance and diverse BINs.

App UX & support: Easy issuance/cancellation, alerts, reporting.

Integrations: APIs for businesses; connections to accounting or spend-management tools.

Practical Tips to Get Started

Define your needs: Occasional purchases, subscriptions, or organizational use?

Set smart limits: Slightly above the expected amount to avoid declines.

Use a separate card per service: Easier to cancel/track spending.

Enable notifications: Monitor transactions in real time.

Check 3-D Secure/OTP compatibility: Required by some gateways.

Read refund policies: Avoid headaches with returns or subscription cancellations.

The Future of Virtual Cards

AI-driven fraud detection: Dynamic limits and automatic locking of suspicious merchants.

Deeper wallet/browser integration: Secure autofill and seamless checkout.

Expanded network tokens & passwordless ID: Combining VCCs with network tokens and biometric/WebAuthn for the safest payment flows.

Advanced enterprise solutions: Project-based cards with supply-chain rules and real-time accounting.