More people than ever are shopping online for a number of reasons, not the least of which is the recent need to shelter at home as a result of the pandemic. However, with cyberfraud incidences on the rise, many online shoppers have become reluctant to share their credit card details to e-tailers.
This has lead more and more online merchants to explore virtual debit cards as an option. These are virtual payments that allow shoppers to make purchases without revealing their card numbers. New authorization numbers are issued for each different merchant—either one-time-use cards or numbers the merchant can keep on file and charge for recurring purchases.
Experts believe that the ultimate widespread adoption of virtual debit cards will depend on how quickly ATM networks are equipped for PIN and NFC transactions without a physical card being required for the verification process.
Addressing security issues
The adoption of virtual debit cards will also depend on the ease of the onboarding process and the degree to which consumers feel it’s secure. This will require card providers to ensure that fraudsters and identity thieves can’t take over cardholders’ accounts or open new accounts under stolen names. Applicants will have to be vetted carefully without it presenting undue burden or inconvenience on consumers.
To accomplish this, card providers will have to conduct verification and data gathering behind the scenes—perhaps by examining the mobile devices that individuals use when applying for the cards and confirming they are actually associated with the identities presented during onboarding. They could also enlist third parties that have transacted with the customers before. For returning customers, the card providers could draw on historical transaction data to confirm identities.
What solution providers will need to know
While virtual debit cards are still in their infancy, they’re certainly an attractive opportunity for e-tailers and the service providers who support them. Those looking into implementation will need to examine the specific technology involved to determine whether or not the current mobile payment terminals in use will accommodate virtual payments—or if new ones will need to be configured.
To learn more about virtual payments, talk to your Ingram Micro sales rep, who’ll put you in touch with one of our DC/POS experts.