Basic Security Logic of Virtual Cards
Although virtual cards are linked to your physical card details, they operate with unique numbers; a different card number can be generated for each transaction. Some virtual cards are single-use, meaning that they are completely disabled after a payment is made and cannot be used again. The CVV codes of virtual cards can also be dynamic; some banks automatically change this code at specific intervals.
Virtual cards are usually created with a spending limit set by the cardholder, which reduces the potential damage to almost zero even if the data is stolen. Some providers allow virtual cards to be used only at specific merchants (such as Amazon or Spotify); transactions cannot be made anywhere else.
Protection Against Fraud and Data Breaches
In most major data breaches in the US, the victims were not those who used virtual cards but those who provided their physical card information. Even if the virtual card number is stolen, the actual credit card number remains undisclosed, making the dispute process easier and eliminating the need to cancel the original card. A hacker forum has revealed that virtual card details are less sought after than physical cards because most only allow a single payment transaction.
Some fintech companies offer a feature that sends notifications to users when suspicious transactions are detected on virtual cards and immediately blocks the card. In a survey conducted in the US, 84% of users who encountered fraud stated that they used their real card details rather than a virtual card for that transaction.
Impact on E-commerce and Subscriptions
Virtual cards are an effective solution against unwanted subscription renewals because payments are automatically declined when the card expires or reaches its limit. Some users make purchases using virtual cards with only 24-hour validity, enabling them to make payments on major platforms like Amazon without leaving a trace. Users who use virtual cards for online shopping are 40% less likely to experience card mismatch issues during the return process.
Apps that automatically charge users after the trial period ends cannot collect payment if the virtual card has expired, giving users control. Some users in the US create separate virtual cards for each subscription, allowing them to identify which companies are sharing their information.
User Experience and Practicality
Modern virtual card apps can create temporary cards within a few seconds after the transaction, allowing payments to be made instantly without the need for a physical card. Some apps work with browser extensions, automatically creating new virtual cards and filling them into the payment field during checkout. In the US, Capital One's Eno virtual card service offers smart features such as automatic number generation and matching past transactions for its users.
Since virtual cards are not physically carried, they completely eliminate physical threats such as loss, theft, or contactless copying. Thanks to virtual cards integrated with mobile payment systems (Apple Pay, Google Pay), the card number is never shared directly with the merchant.
Unknown and Advanced Security Layers
Some virtual cards can restrict transaction geography—for example, allowing purchases only from IP addresses in North America. In next-generation virtual card systems, the card number is stored in encrypted form only in a hardware-based security module (e.g., Secure Enclave). Some fintech companies provide reports that visualize the transaction history of a virtual card after it is created, making user tracking easier.
Transactions made with virtual cards can be triggered more quickly by the payment provider's radar; fraud detection time is on average 30% shorter. Some services have a “merchant-based lock” feature — the card only works at the store where the first purchase was made; if used elsewhere, it automatically closes.
Fintech Companies' Approaches and Strategies
Some fintech companies require users to select the purpose of the transaction before using the virtual card: subscription, one-time purchase, recurring payment, etc. Based on this, the card's lifespan, limit structure, and merchant restrictions are automatically set according to predefined security policies. Large tech companies like Apple Card and Google Virtual Card enhance the virtual card experience with in-app tracking, easy cancellation, and instant password changes.
Some digital banks are trying to attract users entirely to the mobile payment world by offering only virtual cards instead of physical cards. Platforms such as US-based Privacy.com allow users to create different cards for each store and see at a glance which company is accessing what data and when.
Country-Based Usage and Perception Differences
Despite the increasing use of virtual cards in the US and Canada, loyalty to traditional cards remains high; in these countries, “habit” outweighs “security.” According to a study conducted in the UK, 63% of young adults started using virtual card services directly instead of their first credit card. In EU countries such as Germany and France, due to strict data security laws, some banks only allow virtual cards to be accessed via mobile wallets.
In countries such as South Korea and Japan, virtual card systems work in conjunction with QR code-based payments, making the card virtually invisible. In some countries, regulations require virtual card numbers to expire automatically after 24 hours and be regenerated.
Crypto and Virtual Card Integrations
Some crypto platforms (e.g., Crypto.com, Coinbase) offer virtual cards that work with crypto balances, allowing users to make payments with instant fiat conversion. With these systems, users can instantly shop at physical locations such as Starbucks and Amazon using USDT, BTC, or ETH from their wallets. Most crypto-based virtual cards minimize volatility risk by converting at a fixed exchange rate before spending.
Some crypto cards generate a new virtual number for each transaction, providing greater anonymity and protection, especially for DeFi users. Some UK-based banks restrict access to crypto-enabled virtual cards or impose transaction limits until AML and KYC checks are completed.
Interesting Observations Reflected in User Experience
Some users use virtual cards not for daily spending but only for tracking campaigns or making their first purchase; they then manually cancel the card. The use of virtual cards in online dating apps or “trial version” apps directed by ads has increased by 300% in the last two years. Some users report that they are exposed to fewer ads when making purchases with virtual cards — especially when devices are matched.
Users with high privacy concerns combine virtual cards with email alias systems (e.g., Firefox Relay + Privacy.com) to ensure complete identity protection. On some internet forums, users list which subscription companies request excessive data when processing virtual card transactions, thereby promoting digital transparency.
Psychological Impact and Perception Management
Users report feeling less stress and anxiety about their card information being stolen during payments when using virtual cards. The “cancel anytime” feature offered by virtual cards encourages users to try more platforms, especially for digital subscriptions.
Systems with non-fixed card numbers give users the feeling that they are in control of their digital identity, which increases their sense of independence. Some studies show that young users have better budget control and increased spending awareness thanks to virtual cards.
Systems That Cannot Be Used Even If the Card Is Stolen
Even if a screenshot of a virtual card is obtained, most systems require geographic IP, device fingerprinting, or in-app password verification. Some apps require facial recognition or fingerprint authentication before activating the virtual card, creating dependency not only on the card but also on the device.
Even if the user sees the last four digits of the card, most transactions will be rejected by the system if the card's validity has expired. The limit of the main credit card linked to the virtual card is kept separate, so the main card is never directly at risk.