SBI’s virtual debit card: Should you opt for it?

State Bank of India (SBI) recently introduced a ‘Virtual Card’ for its net-banking users. This card is meant only for your internet shopping. It allows users to pay on e-commerce (Flipkart, Amazon, etc.) and merchant websites without revealing the card details. In simple words, this is not a physical card; it is identified by its number.

The virtual card is in-line with the Reserve Bank of India’s (RBI) new set of guidelines – announced in its December 2019 monetary policy – to improve security for card holders of a bank and to issue new prepaid payment instruments (PPIs).

What’s on offer?

The virtual card from SBI acts as a debit card with a limit. A user can apply for this virtual card only using the bank’s internet banking facility. The minimum transaction amount to create a virtual card is Rs 100 and you can spend a maximum amount of Rs 50,000. The card is valid for a period of 48 hours or till the transaction is completed. This is a single-use card, i.e., once it’s used for a transaction, it cannot be used again. So, in case you have used only a part of the amount of a virtual card for a transaction, the unutilised amount will be available in your bank account. There is no issuance fee and no limit on the number of virtual cards a user can apply for in a day. The virtual card can be used for online payment in Indian Rupees (INR), in India, Nepal and Bhutan only.

The virtual card creation and online transaction are authorised after successful validation of a one-time password (OTP) sent to the registered mobile number of the account holder. After successful validation, the card’s image with name, card number, expiry date, etc. will be displayed on the screen.

What works?

Since this is a virtual card, there is no danger of losing it, as the card is made available on your mobile phone. There is also no danger from phishing, as fraudsters cannot get access to your card details at, say, an ATM machine. Further, you can set the limit on the card. So, this limits your risks. The virtual card will be generated by marking a lien on the underlying account, so there will be no loss of interest for the account holder. In other words, the amount will be debited only when actual transaction using the virtual card is completed, successfully. In case virtual card is cancelled by the user or expires, the lien marked shall be lifted.

What doesn’t work?

Experts feel that the virtual card should be available for physical touch-point transactions as well. Sapna Tiwari, Co-founder and COO, Rupeewiz Investment Advisors says, “The use of the virtual card should be extended to point-of-sale (PoS) machines in retail shops, restaurants, etc. to pay regular utility bills online and for cash withdrawals at ATMs.”

Also, for multiple online transactions, a user needs to create several virtual cards online. A virtual card that allows for multiple transactions may work better for customers.

Only internet banking customers can apply for virtual cards. The bank should consider extending usage to foreign transactions on international e-commerce and merchant websites.

Moneycontrol’s take

A user who regularly transacts online should opt for this virtual card facility to secure his/her primary card details from fraudsters. As the card usage is protected through an OTP, which is only sent to the customer’s registered mobile number, the chances of fraudulent transactions are low. However, the user must take adequate precaution to ensure that the card details and OTP are not disclosed to any person who may misuse it.