Virtual Credit Cards: A Practical Guide

View your card information on your phone instead of reading it off a plastic card? This guide by moneyland.ch answers the most important questions about virtual credit cards.

What is a virtual credit card?

A virtual credit card is a credit card account which is not linked to a physical credit card. Instead, the card information is only available digitally, usually through a mobile app. In addition to credit cards, there are also virtual prepaid cards and debit cards (Debit Mastercard, Visa Debit).

How does a virtual credit card work?

Using a virtual credit card is similar to using a real credit card. Payments at POS terminals in physical stores can be made using virtual credit cards in combination with an eligible phone and a mobile payment service like Apple Pay or Google Pay.

For card-not-present transactions (online shopping, for example), you simply use the card number, expiry date, and verification number shown, as you would with a conventional credit card.

But unlike physical credit cards, making cash withdrawals with virtual cards is difficult or impossible, because most ATMs require physical cards.

Some service providers let you use multiple virtual cards. In that case you can use different cards for different kinds of purchases. For example, you can use different card information for your Uber, Amazon, and Netflix accounts.

What are the requirements for getting virtual credit cards?

In some cases, you need to have a physical credit or debit card first in order to get virtual cards from the same issuer. But other issuers do not have that requirement. Swiss Bankers, for example, offers a virtual card as a stand-alone product. You do not need to have an account or physical card from Swiss Bankers to get the virtual card. Yuh gives you the option of adding a virtual credit card to your account. The Light bank package from Swissquote only includes a virtual card, and not a physical one. N26 only offers virtual cards in combination with its private account, but does not require you to get a physical card.

Where can I get virtual credit cards in Switzerland?

Currently, options for virtual credit cards for private individuals in Switzerland are still limited.

UBS is the only conventional bank which offers its customers a virtual Visa or Mastercard credit card as a supplementary card. Users of the Swiss neobanks Yapeal and Yuh get a virtual debit card. Swissquote includes a virtual card with its Light account. The Life Digital service from Swiss Bankers gives you a virtual card and does not require a bank account or physical card. At this time, no other Swiss financial services providers offer virtual cards.

Foreign service providers Revolut and Wise – both of which offer their services in Switzerland – give users access to multiple virtual cards. Revolut lets you add up to five standard virtual cards, plus unlimited disposable cards which can only be used for one transaction. Wise lets you add up to three digital cards to your account.

¹ An optional physical card is available for an additional fee
² Cost of the physical credit card which is required to get a virtual card. UBS does not charge an additional fee for the virtual card.

Because online purchases and mobile payments are becoming increasingly popular, the need for physical cards is diminishing somewhat. Because of this, it is likely that many more service providers will begin offering virtual cards in the future.

Are Apple Pay, Google Pay and other mobile wallets also virtual payment cards?

When you make a purchase using Apple Pay, Google Pay, Samsung Pay, Fitbit Pay, Garmin Pay and Swatch Pay, the mobile wallet automatically generates a virtual card for the transaction. These are not the virtual credit cards explained in this guide, but simply token cards used to settle transactions. You do not see or interact with these token cards at all.

What is a disposable card?

The concept of disposable virtual cards is simple: the card information is only valid for a single purchase. After a purchase has been made, the card number becomes invalid and can no longer be used for transactions. A new disposable virtual card with a new expiry data and verification code is automatically generated and you can use for your next purchase.

Good to know: Using disposable cards for online shopping can be problematic. Some online stores break up your purchase into multiple transactions when the merchandise is delivered in multiple packages. But when you use a disposable card, the merchant can no longer charge the card once the first transaction has been made, and may be unable to complete the sale.

Where can I get disposable cards as an individual in Switzerland?

Currently, Revolut is the only service available to Swiss consumers which offers disposable virtual cards. But with service providers that offer multiple virtual cards, you can add a new virtual card to use for a transaction and then remove that card after making the purchase, assuming you no longer need it.

It is important to note, though, that there are financial services providers that offer virtual cards, but do not give you the option of generating a new one at the push of a button.

Are there also virtual debit cards?

Yes, there are also virtual debit cards. Currently Yapeal and Wise offer virtual Visa Debit cards to individuals in Switzerland. Swissquote and Yuh offer virtual Debit Mastercard cards.

What do virtual cards cost?

When virtual cards are offered as a supplement to a physical card or in combination with a bank account, you do not normally have to pay any additional one-time, monthly, or annual fees for the virtual card. You only pay possible fees for your main physical credit card or account.

The incidental fees associated with using a virtual credit card are identical to those which apply to the equivalent physical card. These include foreign transaction fees and currency exchange markups, for example.

Virtual credit cards which are offered as stand-alone products normally have a monthly or annual fee. For example, the virtual prepaid card from Swiss Bankers has a basic monthly fee of 2.90 Swiss francs.

Where can I use virtual payment cards to pay?

Virtual credit cards, prepaid cards and debit cards work in all online shops which accept the corresponding payment network (Mastercard or Visa, for example). It makes no difference whether the card information comes from a physical or a virtual card. So acceptance in online stores is very high.

Adding the information from a virtual card to mobile payment services like Apple Pay or Google Pay, lets you charge payments at many shops, restaurants, hotels and other merchants to your virtual card using an NFC-enabled phone.

So acceptance at brick-and-mortar merchants is also relatively high, although it varies between regions and countries. In many countries, NFC-enabled points of sale terminals are not as widely available as they are in Switzerland.

Can I use a virtual card to make cash withdrawals?

You normally will not be able to use virtual cards to get cash at ATMs.

N26 says that its virtual cards can be used to withdraw money at ATMs which accept contactless NFC transactions. This means that in theory, you can use the virtual card to make cash withdrawals at NFC-enabled ATMs using a mobile payment service like Apple Pay or Google Pay if the service supports cash withdrawals.

Can I use virtual cards when traveling outside of Switzerland?

Yes. As a general rule, virtual cards can be used internationally.

Just note that you can only make purchases via Apple Pay or Google Pay if the merchant accepts contactless NFC payments. Businesses and vending machines with older POS terminals may not offer this service.

Are there virtual cards for businesses?

Some service providers offer virtual payment cards for businesses, and these can normally be managed by bookkeepers. A business can, for example, use virtual cards for individual employees, and can set different spending limits for each. This can provide a solution for keeping tabs on company spending.

Some businesses also use virtual credit cards to directly allocate payments to specific projects.

In Switzerland, virtual business credit cards are issued by Cornèrcard and Swisscard (Amex).

What are the advantages of virtual payment cards?

The most notable advantage of virtual credit and debit cards is that you can create a new card at any time. From a security perspective, it can make sense to use your physical card for brick-and-mortar payments, and use a virtual card for Internet transactions. In the event that your card information is compromised, you can simply block the virtual card and create a new one with different card information.

Another important advantage is that virtual cards are available to you almost immediately after you open your account. You do not have to wait until you get a physical card to begin making payments.

What are the disadvantages of virtual cards?

Virtual credit cards are not a good choice if you do not want to store and manage your financial information on your phone.

Another disadvantage is that at this point in time, it is hardly possible to make cash withdrawals using a virtual card. You also generally need a third-party mobile payment service and an NFC-enable smartphone to pay with virtual cards at physical merchants. Even then, you can generally only pay at NFC-enabled card terminals, which are not widely-available in many regions.

More on this topic:
Compare Swiss credit cards now
Compare Swiss prepaid cards now
Neobanks in Switzerland compared