NEW YORK (MainStreet) — A Johannesburg financial tech company has developed an app that enables users to create a credit card number from their mobile phone, generating a virtual credit card for every online purchase. During a time when credit card fraud is rising, the app is likely to be welcomed, but will it really be fraud-proof?
Zazoo, a subsidiary of Net1, a leading electronic payment system provider, has generated an app known as VCpay. Users download the app and then upload money onto it by depositing funds into an account via a bank or credit card, or by using EasyPay cashpoints. Users then generate a credit card number, creating a VCpay Virtual Prepaid MasterCard on their phone and can use it to make purchases that do not require a physical card.
As the VCpay website says, by creating virtual credit card numbers, users never expose their true account number, thus helping to secure their identity and account from fraud. Furthermore, with no bill to pay at the end of the month, VCpay users don’t run the risk of acquiring late fees. To sign-up for the prepaid system, no bank details are required, and the company does not perform credit checks.
As well as paying for goods online, the new banking app provides a full mobile banking solution, enabling users to check their balance, view transactions and locate their nearest loading provider.
VCpay speaks of how the virtual credit card eliminates the discomfort many online consumers feel about exposing their credit card number online. Another advantage of virtual credit cards, the company claims, is that they “can only be charged up to the amount that you specify, and cannot be reused once that limit is reached.”
It’s no secret that online credit card fraud is on the rise. In August, the Nielsen Report estimated that in 2014 payment card fraud reached $14 billion globally. According to the report, card fraud had risen by 19% in 2014 and card sales had only increased by 15%.