Moving past plastic: why virtual cards make sense for everyone
Meanwhile, traditional bricks-and-mortar banks face a struggle to transform their banks for the digital era, moving from branch-based banking to full digital solutions.
In a new white paper, Tietoevry explain why virtual cards are the perfect solution for this context. At present, e-commerce is growing many times faster than overall economic activity – around 17 percent per year globally, versus a world GDP growth estimate of 3.2% in 2022. Within this, mobile devices are used most, with more than half of all e-commerce transactions in 2021 happening over cell phones, tablets and other devices.
Virtual cards are low-cost, high-impact products that are more secure than plastic cards, improve the user experience and enhance a bank’s record on sustainability – all while offering the potential for greater flexibility in a digital future.
Designed to meet the needs of consumers in the digital world, virtual cards work exactly like physical cards, but exist in a digital wallet on the user’s phone. Virtual cards are distinct from digital cards, which copy a user’s physical bank card and store it on their mobile device, and “disposable cards” which are stored-value virtual cards designed for a single use.
Virtual cards have their own unique card numbers secured by encryption, expiry dates, and cardholder verification code, or CVC. These CVC codes are extra-secure as they are dynamic, meaning they have a limited lifespan in terms of the length of time and number of transactions for which they can be used. Typically, dynamic CVC codes are single-use, meaning a fresh code is generated for each transaction to help security.
Security aside, virtual cards are also more flexible than their physical counterpart. They can be paired with other products inside a digital wallet, such as a loyalty scheme, a Buy-Now-Pay-Later (BNPL) option or a savings product. Issuing banks can invite clients to switch between virtual and physical versions of their cards according to need, for instance while waiting for a new physical card to arrive. Virtual cards also allow issuers to change their pricing strategies as required, for instance to promote sales or enter new markets. These features represent a step-change in terms of flexibility and convenience.
Using no physical materials, virtual cards are environmentally-friendly, eliminating the use of plastics and rare earth metals in card production. What’s more, virtual cards use zero paper and packaging and have a much lower carbon footprint, since they are issued instantaneously over the air with no need for printing, paper and posting.
As demand for sustainable banking solutions grows, virtual cards make sense – not just for the planet, but from a business perspective. With virtual cards, banks are offering their customers flexible, digital-first payments that can be adapted to meet the rapidly-developing requirements of the digital world.
 See the International Monetary Fund, July 2022: “Global economic update”: https://www.imf.org/en/Publications/WEO/Issues/2022/07/26/world-economic-outlook-update-july-2022
 See Cell Phone Deal, “20 mind-blowing e-commerce statistics”: https://www.cellphonedeal.com/blog/20-mind-blowing-mobile-ecommerce-statistics