Innovations in the Consumer Virtual Card Market

It’s not everyday that payments innovations in the consumer sector lag behind those in the B2B arena. Tech trends usually move from the consumer market to the business market, but here’s one that’s B2B-led—and we can thank people’s fear of fraud for the change-up.

The Uptake of VCNs

Virtual card numbers (VCNs) have been adopted most heartily in the B2B marketplace because they offer a scalable solution for supplier payments, particularly for international transactions. But they’re remarkably safe and have therefore become a dependable go-to for making payments of all sizes. Dig into the Five Types of Fraud Cutting into a Merchant’s Bottom Line and

Virtual Card Numbers Fight Payments Fraud in Business Travel for details.

The technology has been somewhat of a tougher sell in the consumer market, where awareness of VCNs is relatively low and credit card companies have struggled to get customers out of the “plastic card” mindset. Even so, financial institutions offer VCNs primarily to customers who want a safer online shopping experience. Because they mask the real credit card numbers, VCNs are of little use to a thief who (potentially) gains access to them. It’s a peace-of-mind that’s incredibly valuable to many consumers—maybe increasingly so.

Fighting the Fears of Fraud

In light of recent consumer data breaches, most notably the 2013 Target hack, credit card companies have been working hard to regain consumer confidence in card purchases. By offering a “disposable” solution in the form of VCNs, issuers help ease shoppers’ minds when they’re concerned about making online purchases with their standard plastic credit card numbers. But what’s around the next corner?

A new VCN solution in the consumer space comes from Final. They’re introducing customers to an iOS app enabling them to generate a new credit card number that can be locked to a specific website and even a specific merchant. The number can be used only one, naturally, but that number can be used to set up recurring payments for subscriptions. Final is taking a fresh approach to the VCN solution, positioning the availability of VCNs as an added value, bringing enhanced security and more transaction control when cardholders need it.

According to Final’s website, Final is a physical card, a mobile app, a better credit experience, a consumer advocate, and a way to protect your account from fraud, breaches, and card cancellation. Final is what we built when we started thinking about the ways in which we wanted to take back control of our own credit cards for how and when we’re charged, instead of leaving it up to merchants.

Find details on Final’s FAQs page and get insights from The Latest Credit Card Innovation: Disposable Numbers on PYMTS.com.

Still A Tough Sell?

Time will tell how Final’s customers respond to the company’s VCN alternative, as the perceived downsides of VCNs remain. First, they’re not entirely convenient—they’re not the plastic cards consumers are used to using at the store or even online. They also tend to make returns more challenging, especially if the VCN is expired. And then it comes to verifying transactions in person, like when checking into a hotel, consumers find it easier to reach into their pockets for the physical form of payment.

That’s not to say VCNs won’t find a sweet spot in the consumer’s payment mix. Companies like Final are exploring new value propositions for the technology and testing new ideas out on the consumer marketplace. They may manage to overcome people’s lack of awareness and tap into a lasting need for disposable credit card numbers. But for now, in the B2B environment, at least, there’s primarily up-sides of using VCNs. Learn all about them in 5 Things You Didn’t Know About Virtual Payments.