Eighty-two percent of U.S. consumers use digital forms of payment for their transactions (The Business Research Company). This shift in the payments landscape makes virtual cards an important part of any prepaid program. Their enhanced security, flexible convenience, and management ease for both issuers and cardholders contribute to their rising popularity. Understanding how to effectively incorporate virtual cards into your credit union’s prepaid strategy is key to competing within the financial services market.

What Are Virtual Cards?

Virtual cards are generated electronically without any physical or tangible element to them. They subsist only within the digital space. They do, however, have a unique card number, expiration date, and security code like physical cards. Virtual cards are ideal for online and over-the-phone purchases, peer-to-peer transfers, and other digital transactions.

Benefits for Credit Unions

Virtual prepaid cards offer many distinct advantages to physical cards including:

Enhanced Security: While prepaid cards in general have a reputation for being a more secure form of payment because they aren’t tied to a cardholder’s bank account, loaded funds can be drained if a card is lost or stolen. Virtual cards are not only tokenized for added protection, but their digital-only format means losing them isn’t a worry.

Increased Efficiency: Virtual cards are faster and more cost-effective to issue than traditional cards. Physical cards need to either be kept in stock and stored or there is a wait time to produce and deliver the cards. With virtual cards, the issuer can send the card instantly as they’re ordered to the email address provided. This can save credit unions time and money while being more convenient for members.

Enhanced Member Experience: In addition to quick issuance, virtual cards enhance the member experience in many ways. By adding them to digital wallets, cardholders can enjoy a seamless shopping experience from digital platforms to physical stores as well as easily manage their funds and card permissions online. Virtual cards are also convenient for travelers since they don’t have to worry about bringing along a physical card or keeping track of it on their trip.

These added conveniences make virtual cards an important part of improving member satisfaction and loyalty.

What to Consider When Implementing Virtual Prepaid Cards

A successful virtual card strategy involves several key considerations. When it comes to choosing a platform, look for one with a good reputation that seamlessly supports virtual card issuance and management along with the latest fraud prevention technology. Other aspects to consider include:

Marketing: Members need to clearly understand the key features and benefits of virtual cards compared to physical cards as well as how to purchase, activate and use their virtual cards.

Mobile App: Providing a mobile app is a good way to make these cards even more convenient for cardholders to manage.

Cardholder Service: Customer support is a vital aspect of a successful strategy. If looking to work with a prepaid partner, take time to investigate the quality of their customer service including their available hours, service channels, and resolution promptness.

A well-planned virtual card strategy is an effective way to bring added value to a prepaid card program. Virtual cards harness the latest emerging digital technologies to help your credit union keep up with changing member lifestyles and expectations. By offering virtual cards, credit unions can help build their reputations as innovative financial institutions while also enhancing member relationships.

Originally Published on CSS Knowledge Center.