How virtual cards reduce risk and fraud for payers and payees?
According to Consumer Sentinel Network, U.S. Department of Justice, lost, stolen & counterfeit credit cards account for 60% of credit card fraud. With virtual card payments, the payees are protected from such risks. Why?
- Virtual cards are for one time use and are made out for the exact monetary value of the payment amount for which it was issued. Once that amount has been reached, the card is no longer valid. This ensures that the purchaser cannot be overcharged or the card reused.
- Because each payment is assigned its own unique card number and sent directly to the designated merchant, a thief is unable to use that v-card for other purchases as he would a credit card. In addition, a card number is activated and an expiration date assigned only when a payment is ready to be sent.
- Each virtual card payment is tied to a merchant classification code (MCC), which is used to classify the business by the type of services or products it supplies. These can be used to help identify which transactions need to be reported to the IRS, thus assisting with proper transaction identification and tracking. Merchant ID’s are also captured and used to trace subsequent authorizations.
- Each card is tracked in real time from delivery to redemption to settlement. Any fraudulent attempts to use the card are tracked and immediately reported. Issues are then resolved through the v-card processor and the issuing bank.
- Specialized fraud-screening solutions constantly scan for suspicious activity and will alert you and your financial institution to questionable transactions. This allows suspicious transactions to be placed on hold to verify them and correct any issues it may resolve.
- Virtual cards protect you in the same way as physical credit cards. This means that they include a zero liability process. This means users are guaranteed they won’t be held responsible for fraudulent charges made with a virtual card or account information. RISK nothing and PAY nothing for unauthorized use.