Virtual Cards —what are they and how do they work?

Virtual Cards —what are they and how do they work?

Virtual Card

Virtual cards are like your regular debit cards but without the physical piece of plastic. Instead, they exist in the digital world and help add an extra layer of security when you perform transactions online.

You should forget that virtual cards are only for dealing with dollars or other international currencies. In this article, we’ll show you why having a virtual card in naira is a smart move.

What are Virtual debit cards?

A virtual debit card is a digital representation of a traditional debit card, devoid of a physical presence. It lets you make online purchases, payments, and transactions without the need for a physical card.

Virtual Debit cards vs Normal Debit cards

As mentioned earlier, the difference between a virtual debit card and your normal debit card is that the former has no physical representation, while the latter does. You can take your normal debit card to an ATM to withdraw money, but your virtual debit card can only exist on your phone, most times in the app of the bank it’s created and can only be used for online transactions.

How do Virtual Debit Cards Work?

When applying for a virtual debit card, you typically go through your bank’s online platform or mobile app. Once approved, the bank issues a virtual card directly linked to your existing bank account.

Unlike traditional physical cards, virtual debit cards exist solely in digital format, securely stored within the bank’s mobile app. They are specifically tailored for online transactions. You use the virtual card details— the card number, expiration date, and CVV—to make purchases on e-commerce websites and various online platforms.

Additionally, virtual cards often offer enhanced security features, with some providing one-time-use card details to heighten protection during online transactions.

Benefits of Virtual Debit Cards

1. Additional Security

Firstly, virtual debit cards are not the actual numbers of your real debit card. They are unique, separate digital entities, so even if the virtual card details are compromised, your main card details remain safe.

Secondly, some virtual cards are designed for one-time use. Once you use them for a transaction, they become inactive, making it difficult for anyone to reuse or hack those details. It’s like having a disposable shield for each online purchase, adding an extra layer of protection to your financial information.

2. Instant Access

When we talk about accessing virtual credit and debit cards instantly, it means you can create and start using these digital cards right away.  Unlike traditional physical cards, there’s no need to wait for a physical card to be produced and delivered.

3. Empowerment for Businesses and Employees

Instead of dealing with the hassle of a single physical card, businesses can issue virtual cards to each employee, streamlining the process. This not only makes things more efficient but also cuts down on the paperwork typically associated with obtaining corporate cards.

4. Customizable Spending Limits

With virtual debit cards, you have the power to set specific spending limits for each card. Imagine you’re a boss with multiple team members or a parent with teenagers, this feature can help you keep a firm hold on the overall budget for payments.

Top 5 virtual debit cards in Nigeria

S/NBank/ IssuerCost (N)Maintenance Fee (N)Daily Transaction Limit
1First Bank200N50 quarterlyVaries
2GTBFreeN/AN500,000
3Chipper Cash1000N50 quarterlyN/A
4UfitPay100Zero$10,000
5KudaFreeZeroN1M

1. FirstBank

This FirstBank Virtual Card is a Naira-denominated debit card that is accessible via FirstMobile or FirstMonie Wallet applications.

Maintenance Fee: The monthly maintenance fee for the Virtual Card is N50, charged quarterly.

Cost: The cost of the Virtual Card is N200 (VAT exclusive).

Transaction Limits for First Bank Virtual Card

Firstmonie Daily Transaction Limit (Local):

ATM: N50,000 (10 transactions)

POS: N50,000 (20 transactions)

WEB: N50,000 (20 transactions)

FirstMobile Daily Transaction Limit (Local and International):

ATM: N150,000 (10 transactions)

POS: N2,500,000 (20 transactions)

WEB: N1,000,000 (20 transactions)

International Transactions: $100 daily/monthly

2. Guaranty Trust Bank (GTBank)

Cost: The issuance of the Virtual MasterCard is free; there is no cost for obtaining the card.

Daily Transaction Limit: Daily transaction limit allowable on the card is N500,000.00.

Maximum Balance: The maximum balance that can be stored on the card at any time is N500,000.

3. Chipper Cash

Chipper NGN Card is a pre-funded and reloadable virtual card used for domestic (within Nigeria) online payments.

Maintenance Fee: There is a quarterly NGN 50 maintenance fee for the Chipper NGN card.

Cost: A one-time NGN 1,000 issuance fee is charged for the Chipper NGN Card.

4. UfitPay

UfitPay offers virtual Naira and US Dollar cards for secure local and international payments, fund transfers, and online shopping. The cards are self-issued and said to be ready in seconds, powered by VISA 3D and Verve.

Maintenance Fee: Zero maintenance fee is mentioned for UfitPay virtual cards.

Cost: The cost for UfitPay virtual card services starts from as little as N100 per card.

Daily Transaction Limit: Up to $10,000 monthly spending limit for virtual cards.

5. Kuda

Kuda is a digital bank, often referred to as a neobank or challenger bank. It operates solely online, providing financial services through a mobile app rather than traditional brick-and-mortar branches.

Cost: Free

Maintenance Fee: Zero

Daily Transaction Limit: N1,000,000

In Conclusion

The advantages of virtual cards are more than international transactions, proving to be a smart and secure choice even for local currency dealings. Whether managing budgets for business or enhancing personal financial control, the flexibility and security provided by virtual debit cards make them an asset to any modern user. So, consider making the shift to a virtual card in Naira and enjoy a safer and more convenient way to navigate your digital finance.

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