How Virtual Cards Improve Mobile Wallet Security and the Customer Experience

As contactless payments become more common in the wake of COVID-19, virtual credit cards offer a desirable layer of security against fraud.

Contactless payments are on the rise in the U.S. as consumers seek safe ways to complete transactions during a pandemic. Amidst this shift, card issuers and banks have an opportunity to embrace one particularly powerful way to make these new contactless payments even more secure and customer friendly: virtual credit cards.

Today, chip credit cards and tap payments secure transactions using a transactional “token” that takes the place of the actual card’s information, providing an extra layer of protection over simply swiping. After a transaction is complete, the 16-digit token expires.

This token is a virtual credit card.

Virtual credit cards are convenient and available to consumers at no extra cost. They can be generated instantly on a mobile app and used to shop immediately, even if the user forgets their wallet at home. Once easily accessed, there’s little reason for consumers not to leverage the additional layer of security.

To attract smartphone users and digital-native millennials in an age where fraud is commonplace, financial service providers need to assure customers that their information and transactions are safe. With virtual credit cards, they can do just that.

Security Matters More Than Ever

Last year was a banner year for credit card fraud. One-hundred and sixty-five million personal data records were exposed through data breaches in 2019. The year before, card fraud losses cost the U.S. $9.4 billion. Consumers know that sharing card information is risky, and even if they are protected from fraudulent charges, the process of reporting fraud and waiting for a new card to be issued and arrive by mail is enough of a hassle to make more secure payment options attractive.

A virtual credit card offers that security in a few ways. Obviously, it hides the customer’s actual credit card information, preventing it from falling into the wrong hands. If the virtual credit card number is somehow obtained by a fraudster, it won’t matter since most expire after use (though some can be set up with an extended expiration date, like while traveling for instance).

Virtual credit cards also protect the personal information associated with users’ actual cards. In the case of debit cards, virtual credit cards may be the strongest buffer against a hacked bank account.

Fraud is expensive for everyone—card issuers, banks, merchants, and consumers. Virtual cards save everyone time, money, and headaches all while providing an efficient and seamless transaction experience.

Virtual Cards Can Help Banks Reach Valuable Audiences and Grow

Commercial virtual card payments are expected to exceed $1T by 2022, and consumer virtual cards will generate more than $14B in revenue, according to Juniper Research. Business use of the cards is expected to grow by 90% through the next few years, with the biggest adopters being financial services.

When it comes to consumers, millennials in particular seek frictionless technology and elegant user interfaces that make their lives easier—but they’re also suspicious of credit card companies and more risk-averse in regards to financial transactions and sharing personal data. Virtual credit cards meet those concerns head-on.

Big banks already know this. Citi, JPMorgan, and Capital One already offer virtual credit cards seamlessly through chip cards. They also give their customers the option of generating a virtual credit card for use while shopping online.

In an age where frictionless experiences reign, however, requiring extra steps isn’t a winning strategy. Digital wallets like Apple Pay and Google Pay that can be used online and in-store have set high standards. These services use virtual cards in a way that’s automatic and in the background. If banks want to keep up with fintechs revolutionizing contactless payments and virtual credit cards, they’ll need to streamline payment experiences with solutions as good or better than existing options.

An ideal solution is an app that automatically generates a virtual credit card at the point of purchase for just that transaction. Virtual credit cards can and should be generated, used, and then expire completely in the background. That’s the kind of elegant user experience tech-savvy consumers crave.

Virtual Cards Improve Security and Experience

COVID-19 accelerated the adoption of digital in many ways, and contactless payments through mobile apps are no exception.More than ever, virtual wallets need to deliver simple, secure payment solutions. As different card providers experiment with apps, extensions, and programs, the ones who stand out will, perhaps counterintuitively, be those whose work is invisible.

For banks looking to increase security without creating any extra steps for customers, leveraging virtual cards in the age of contactless payments simply makes sense. 

Major financial players turn to Kunai to modernize their tech stack and create a seamless user experience. Whatever’s happening behind the scenes, we can make frictionless, modern and secure payments a reality for your customers. If you need help getting it all to work together, let’s talk.



Sandeep: Tell me a bit about the early part of your career.

Tom: I spent a decade helping to build start-ups focused on application and database software. This was where I learned how to sell and do business development. I was fortunate to be part of one company going public and another being sold to IBM.

Sandeep: What is something you learned during this time that helped you with consulting?

Tom: I began to appreciate how different customers achieved varying levels of success with the same foundational technology. This made me understand just how critical getting your team and process right can be.

Sandeep: This is something I only came to appreciate years into consulting, especially after the sale of my first consultancy to Capital One.I saw teams in different parts of the company trying to solve challenges like real-time messaging. Same corporate culture, same technology, same internal support mechanisms. Night and day outcomes.

Tom: We saw a lot of the same thing after selling our practice to EMC (sold to Dell in 2015). This is probably the thing I'm most proud of when it comes to the teams I've helped to build: the ability to perform well in a variety of contexts, sometimes in ways that inspires the client team to up their game as well.

Sandeep: Yes. It's particularly cool to see your team succeed in individual ways after an skills definitely translate into the corporate environment.

Tom: Totally. We have people who've stayed on at Dell and risen up the ranks, while others took the opportunity to become successful executives at other Fortune 100 companies....or to start their own agencies and startups.

Sandeep: We've both been around a while. My first consulting project was a Y2K thing for Cisco back in 1998. You've been around a little longer than that :). How do you think consulting has changed most during the past five years?

Tom: I think because there is so much infrastructure available now, consulting has become more delivery and outcome-oriented. A better blend of strategic and tactical. Public Cloud has also enabled velocity to increase at a pace unfathomable 5 years ago.

Sandeep: What has stayed the same?

Tom: It's still mostly about people. People who thrive on change and are focused on their personal and professional development. I love that this has not and will not's what I love about consulting.

Sandeep: I know you're adjusting your work style to COVID. You're still a dude who clearly prefers to drive an hour for a socially-distanced hike or outdoor meeting over Zoom any day of the week :) But personal styles aside, what is specifically compelling about a remote agency during the era of COVID?

Tom: Kunai has been remote for years, which gives them an inherent advantage. There is something about the communication and management styles that just works in a way that other organizations are still figuring out.

Sandeep: Yeah, I think what a lot of people fail to realize is that remote work isn't just office work over Zoom. it's an entirely new paradigm. There needs to be an understanding for asynchronous efficiency...and this just takes time and effort to develop. How do you approach remote work and family? What are you learning about separating work and personal time?

Tom: No matter what the form of interaction, Focus. Be present. Quality over quantity. The best weeks are the weeks where I proactively schedule work and personal time. Neil (Kunai's Head of Delivery) shared a great quote with me "With discipline comes freedom." When I am proactively addressing the majority of my professional and personal commitments, I find I earn a little flexibility. A little freedom.

Sandeep: Tell us about a business hero of yours that I may not have heard of before.

Tom: Paul O'Neill is someone you may not know. His work in both the public and the private sector created a profound impact

Sandeep: We are both over forty years old :). How have you learned how to work smarter during the past decade or so? What do you wish you knew about consulting when you were 25 that you know now?

Tom: Consultants want to make lasting change. Lasting change is often not the act of a single person. Today I work much harder bringing others along on the journey.

Sandeep: Last question. What are you doing here? :) Why join a small consulting company this late in your career when you could have a cushy job somewhere else?

Tom: I love a good challenge personally and professionally. When I turned 40, I decided I would run a 10K every Thanksgiving weekend and try to have my finishing time be less than my age. With the exception of one year where I did not run due to a health issue, I have met the goal. I also recently completed the Leadville 100 Mountain Bike race. So, I guess I'm here because I'm a glutton for punishment :) Jokes aside, our customers have a job to do and I intend to put Kunai in a position to execute flawlessly on their behalf. I love committing jointly to audacious goals for our customers and our business.

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