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Virtual cards: the perfect fit for digital natives

Demand for virtual cards is growing among a new generation of consumers. Here’s why.

Henrik Brun / February 01, 2023

Virtual cards are a new kind of payment product that uses no plastic or other physical material. They are popular with a younger (18-35) generation of “digital native“ customers who grew up with the internet.

In an earlier blog, we explained how the shift to online shopping plus concerns about the environment are driving consumers away from using plastic and towards virtual cards.

Virtual cards work like physical cards, but exist in a digital wallet on the user’s phone. Using no physical materials, virtual cards dramatically reduce a bank’s use of plastics and rare earth metals. Their environmental benefits extend to zero paper and packaging and a much lower carbon footprint, since they can be issued over the air, eliminating the need for printing, paper, envelopes and posting.

Sustainable, flexible – and safer

As well as being sustainable, virtual cards are more flexible than plastic cards. For instance, they can be combined with other financial products inside a digital wallet, whether that’s a loyalty scheme, a Buy-Now-Pay-Later (BNPL) option or a savings product. Banks can invite clients to flip between virtual and physical versions of their cards according to need, such as when waiting for a new physical card to arrive. Best of all, they can be issued and replaced instantly, meaning there’s no worries about wrong addresses, stolen cards and misplaced shipments.

As we explain in our new white paper, virtual cards are also safer than traditional plastic cards. Virtual cards have their own unique card numbers, expiry dates, and dynamic cardholder verification code, or CVC. Typically, dynamic CVC codes are single-use, meaning a fresh code is generated for each transaction, aiding security. As they are protected by the security on a consumer’s mobile device – such as biometric and PIN factors to open card wallets – as well as strong message encryption, virtual cards are less susceptible to many fraud types.

In tune with youth and the planet

At Tietoevry, our card services division helps clients set up virtual cards as subproducts rather than main products. This reduces time to market for a new virtual card from around three months to as little as a single day. Being 100 percent digital, virtual cards are rapid to set up and a lot cheaper to create and distribute than plastic – sign-up takes just a few clicks, and new virtual cards can be connected to an Apple or Google wallet almost immediately. This ease of set-up and rapid sign up opens up channels for banks to instantly attract new cardholders with products they can use right away, such instantly issued store credit cards issued while the customer is in-store, or cards with “frequent flyer” loyalty functions marketed at airports.

Given young users’ appetite for new technologies, banks can design and roll out new products – such as a virtual Youth Card or affinity product – at low cost and with low user friction. Since youth cards have traditionally been low-margin products, the lower production and distribution costs make virtual cards lower risk and more attractive for banks. Furthermore, virtual cards can be targeted at specific demographics, then expanded to a wider market quickly and easily.

Given these features, it’s hardly surprising that virtual cards are so appealing to young people looking for convenience and security when shopping online – especially using mobile devices. And the fact that virtual cards make this happen without costing the Earth – either financially or environmentally – is a huge attraction. As digital wallet use for online shopping continues to rocket, growing numbers of banks are turning to virtual cards as the solution of choice for generation digital.

Download a free copy of Moving past plastic: why virtual cards make sense for everyone, the new white paper from Tietoevry, now.


Henrik Brun
Product Manager, Card Administration

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