A lot of people are at a loss when it comes to understanding the term “virtual debit card”. The fact of the matter is that this is just what the card is “virtual”. There is no touching, feeling or seeing the card in its physical form. What some of the financial companies have done is to ‘demat’ the debit card. This is the process of dematerializing the card into ‘nothingness’. Thus the term virtual, however, little has changed when it comes to using the card.
A virtual debit card can be used just like any other card for online transactions. When you apply for a virtual debit card from an online payment processor you get a card umber and a PIN number. Then you use your credit card to charge the virtual debit card and you can use it online for any transaction.
Now this would bring one to the question as to why use a virtual debit card when you already have a credit card that you are using to charge the virtual debit card? The question is wise no doubt, but there are sites and transactions where you will want to be absolutely sure of the security of your card information. They may also be sites where you would like to keep your identity secret. This is where you would use a virtual debit card.
Another place you would use a virtual debit card is where you get your payments online. It is sometimes necessary to sign up for an online payment processor account where your payments are credited as and when you earn them. Then you either withdraw the cash through your bank or you get a check in the mail. Here a virtual debit card will be very helpful. This is especially so if the payments you are getting are very small and you can use them for online purchases without having to pay the withdrawal transaction fee. Many virtual debit card companies issue these cards free. Their only purpose is to get people to deposit cash with them by charging the cards from time to time.
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