Virtual Account Number

A virtual account number is a temporary token to replace a permanent account number, ensuring the security of the user’s actual account information during purchases. Banks often offer this technology and digital CVVs or SMS verification to safeguard customer data. To use the service, users usually need to opt in and may have to download an app or browser extension.

When purchasing, the customer must undergo authentication, typically using a username and password. Subsequently, the issuing bank generates a proxy account number, functioning like a real account number, to complete the transaction.

The strength of virtual account numbers lies in their randomized nature, making it nearly impossible to trace them back to the genuine account holder information. Even if a fraudster somehow gains access to a user’s virtual account number, it will likely have expired before they can exploit it.

In practice, a virtual account number acts as a substitute for the actual credit card number, interacting with the merchant while keeping the real account number concealed. On the processing side, these temporary bank account numbers are treated exactly like credit cards, offering a secure and efficient payment method.

In the context of virtual account numbers, they also play a role in mitigating the impact of chargebacks for merchants. Since virtual account numbers act as temporary tokens and are unrelated to the actual account information, they provide an extra layer of security against potential chargeback fraud. By utilizing virtual account numbers, merchants can minimize the risk of chargebacks initiated by fraudulent transactions, enhancing overall payment security and protecting their businesses from financial losses.