A virtual account number (VAN) is a temporary number connected to your bank account. It allows you to make online or phone payments without revealing your real bank account details. Your bank creates these numbers, and they are active for a specific duration, like one month, functioning like regular account numbers for payments.
Virtual account numbers and disposable virtual card numbers are getting more popular around the world because of numerous data breaches. Using one-time only, disposable account numbers help you against online fraud.
How Virtual Account Number Works
A virtual account number (VAN) is a temporary, single-use bank account number that is assigned to a customer for the purpose of making a specific payment. The VAN is linked to your real bank account, but the merchant does not have access to this information.
To get a virtual account number (VAN), you can request it from your bank or a financial institution that offers this service. Once requested, the bank will generate a unique VAN for the specific transaction or set of transactions you plan to make. Each VAN is typically valid for a limited time. The VAN is linked to your primary bank account, so when you make an online payment, you provide the VAN instead of your actual bank account number.
How to Get a Virtual Account Number
To begin, you should check whether your bank offers virtual account numbers. Once you’ve confirmed that your bank offers this service, you can proceed with the request. Some banks enable you to request a VAN conveniently through their online platforms or mobile apps, while others may require you to contact their customer service.
When initiating a VAN request, you’ll typically be asked to furnish specific information, including your name, account number, and the intended purpose of the VAN. These VANs typically come with an expiration date. After the designated period lapses, you’ll need to request a fresh VAN if required. To use your virtual number, simply provide it to the merchant when making a payment. The merchant will then use the VAN to process the debit from your bank account
Banks With Virtual Account Numbers
There are a few banks that offer virtual account numbers, but they are not as common as banks that offer virtual card numbers. Here are a few banks that offer virtual account numbers:
- Ally Bank
- CitiBank
- Capital One
- USAA
- Discover Bank
- Charles Schwab
- Deutsche Bank
- HSBC
- Standard Chartered Bank
- BNP Paribas
- Royal Bank of Canada
- Scotiabank
- Société Générale
- Bank BCA (Indonesia)
- DBS Bank (Singapore)
- Westpac
- ICICI Bank
- Kotak Mahindra Bank
- First Bank of Nigeria
Bank of America stopped offering their virtual account number service, called ShopSafe, in September 2019.
Advantages of Virtual Account Numbers
Virtual account numbers are essential for safe and secure transactions. They reduced the chances for fraud for credit card payments. Providing a merchant with your credit card details like credit card number and security code increases the chances of him using it to make his personal purchases or their system can get hacked.
It is safer to buy from large and established stores like Walmart compared to small and new stores. However, there are still some risks associated with it. This necessitates the use of virtual account numbers for transactions.
Most global merchants’ store their data in a single database. This is not safe, and it is always a target for hackers. This leaves credit cardholder information at the risk of hackers. As such, it is crucial to have a virtual account number for transactions while the banks retain your real account numbers. It is not 100 percent safe, but it provides increased security for your banking data.
Downsides of Virtual Account Numbers
While it is safer to use virtual account numbers for transactions, it also comes with a few downsides. They include:
- VANs only work online, and they may not be of use to customers who do not shop online. It is because it does not affect transactions where credit cards are present.
- Getting a refund after using virtual account numbers can take a lot of time and effort. It is because a credit card number is not present to get a refund. Merchants have a hard time when they have to make refunds for payments made using virtual account numbers. Such refunds attract a chargeback.
- There may be issues with verification. Sometimes, online payments may require one to have a physical credit card. Some stores may want to verify the same details appearing on their end to be the ones on the credit card. This may cause issues since virtual account numbers are randomly generated and are not present on credit cards.
Virtual Account Number: A Secure Way to Make Online Payments
Virtual account numbers (VANs) are a secure way to make online payments. They help protect your financial information by not revealing your actual bank account number. VANs are available from many banks around the world, and they can be used for a variety of purposes, including recurring payments and single-use payments.
If you are looking for a way to protect your financial information when making online payments, VANs are a good option. However, virtual account numbers are not available from all banks.
Virtual Account Number FAQs
What is a virtual account number example?
Here is an example of a virtual account number: 1234-5678-9012-3456. It is a 16-digit number that is randomly generated and linked to a bank account.
How do I create a virtual account number?
Creating a Virtual Account Number (VAN) involves contacting your bank, supplying your bank details, and receiving the generated VAN information, including the VAN number and expiration date. The specific steps can vary depending on the bank you use.
How do I use a virtual account number?
To use a virtual account number (VAN), you will need to provide the VAN number and expiration date to the merchant or person you are making the payment to.