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All You Need to Know About Virtual Debit Cards: Southeast Asia's Rising Payment Method
April 28, 2023
Visa's Consumer Payment Attitudes Study 2022 has revealed that the utilization of contactless payment methods has proliferated in Southeast Asia, with 93% of consumers in the region embracing digital payments. Virtual debit cards are one of the payment methods that have gained popularity as a viable alternative to their physical counterparts.
But what precisely is a virtual debit card and how can business owners outside and within the financial services industry benefit from offering this payment option to their customers?
Definition of a Virtual Debit Card ?
A virtual debit card is the digital representation of a physical debit card, which can usually be accessed through a website or mobile app. It can be used for online purchases (e.g. shopping in online ecommerce platforms, purchasing concert tickets, etc.), as the cards also have unique card details like the 16-digit card number, expiry dates, and CVV. Customers usually will need to have an account with a bank or other financial institutions first before being able to issue a virtual debit card.
What's Benefits of Virtual Debit Cards ?
Security
Virtual debit cards provide enhanced security features compared to traditional debit cards. Since they are not physical cards, there is no risk of losing or misplacing them. Furthermore, many card providers offer one-time-use card numbers or the ability to set transaction limits, which reduces the risk of fraud or unauthorized transactions.
Convenience
They can be easily accessed through the bank's website or mobile app, making these cards easy to use as a contactless payment method. Plus, as long as customers have an account with said bank or financial institution, there is no need to wait for the physical debit card to arrive, they can just activate it and start using the virtual debit card immediately.
Cost-effective
These cards often have lower issuance fees and maintenance charges compared to traditional debit cards, as they do not require physical production or mailing.
Flexibility
Virtual debit cards offer users greater flexibility in terms of managing their accounts, such as the ability to easily upgrade their card, modify the card numbers, and adjust the limits with just a few clicks online.
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How Can You Get a Virtual Debit Card?
You can get a virtual debit card by opening an account with a bank or financial institution that offers virtual debit card services. Some banks may offer virtual debit cards as an additional feature for existing customers, while others may require you to apply for a new account specifically for the virtual card. Virtual debit card providers may also be independent fintech companies that offer virtual card services, often linked to your existing bank account or credit card.
How Do They Work?
A virtual debit card works similarly to a traditional debit card but without a physical representation. When you make an online purchase or transaction, you use the virtual card's unique card number, expiration date, and security code, just like a physical card. The purchase amount is deducted from your linked bank account or credit card balance. Virtual debit cards are often generated instantly and can be used for one-time purchases or recurring payments.
Can You Use a Virtual Debit Card in an ATM?
No, this will not be possible as they do not have a physical counterpart that allows you to insert it into the ATM machine. In order to withdraw cash and perform transactions via an ATM, you will have to use your physical debit card or use your online mobile banking app to do so.
Does Ayoconnect Offer Virtual Debit Cards?
Although we do not currently offer this particular product, you will be pleased to know that Ayoconnect's White Label Virtual Cards solution functions similarly to a virtual debit card and offers comparable benefits, along with a host of additional features that can cater to an even wider range of your business needs!
Advantages of Ayoconnect's White Label Virtual Cards vs. Normal Virtual Debit Cards
More Flexible Usage
Not only it can be used to make online transactions like booking flights or subscribing to office-related subscriptions (e.g. Slack, Zoom, Adobe, etc.), Ayoconnect’s White Label Virtual Cards can also help your business to:
- Create incentive and rewards cards for customer loyalty programs
- Disburse loans for small business lending without requiring borrowers to have bank accounts
- Track and manage company expenses easily
- Streamline media buying and online ads across various platforms (Google Ads, Facebook Ads, etc.) and manage reconciliation with ease
- Provide Buy-Now-Pay-Later (BNPL) schemes to borrowers instantly after approval
- Allow customers to receive insurance claims faster without having to own a bank account
Cardholder Doesn’t Need to Have a Bank Account
Our White Label Virtual Cards have been specifically designed with the Indonesian and Southeast Asian markets in mind, where over 70% of adults are unbanked or underbanked. With this in mind, we have created a solution that does not require the cardholder to have a bank account to be able to receive funds and utilize the cards for the intended purposes.
Hence, whether it's for insurance payouts, disbursements for company expenses, or even loans, you can simply deposit the required funds into our virtual cards first. Then, the card can be used right away, just like a prepaid card. What's more is that our card can be topped up with multiple currencies across the globe, making it easy for the cardholder to process both domestic and international transactions with absolute ease.
Fully Customizable and Re-brandable to Suit Your Business Needs
Partnering with one of the world’s best global payment technology companies, Mastercard, we are committed to making sure that our White Label Virtual Cards will be fully customizable and re-brandable to any of your needs.
Not only our cards can be freely used as single-use cards or multi-use cards where the card can be easily transferred from one user to another, but other aspects of the cards can be fully customizable as well. The card limit, expiration date, numbers, and even the design can be fully designed to match your business’ aesthetics, making it fully re-brandable as your company’s own virtual cards in the market.
It's Your Turn Now!
If you're considering launching your own White Label Virtual Cards, let Ayoconnect take care of it for you. With digital payment methods gaining popularity and becoming more accessible to a wider audience than ever before, now is your chance to enhance the services your business offers to customers. Our cards can go live in 7 days and are fully regulatory compliant, enabling you to launch your own virtual cards in no time.
We also have the trust of over 200 renowned institutions across Southeast Asia, such as Bank BRI, Gopay, Traveloka, and AXA Insurance, providing them with the best Open Finance API solutions in Southeast Asia. Our team will ensure that we can customize virtual cards to meet your business needs perfectly.
Ready to #MoveForward with us? Contact us for more information here!
