What Is The Difference Between a VCC and a VBA?

The evolution of technology has paved the way for banks to provide online services and also go completely virtual. This has created a heated debate among customers and treasurers across the world. While you might have heard about VCC and VBA before, there is a rapid progression in their usage and benefits to consider. This brings us to the question:

What is the difference between a VCC and a VBA? VCC stands for Virtual Credit Card; It is an electronic copy of your credit card authorized for online use only. VBA, on the other hand, stands for Virtual Bank Account. It is a temporary bank account that does not physically exist but transact on behalf of a physical account.

The global marketplace has witnessed tremendous growth in technology and commerce. Online commerce and digital currencies have led to the development of international virtual banks and an increase in virtual credit card usage. In this article, we look at the difference between virtual credit cards, VCCs and virtual bank accounts, VBAs.

What is a Virtual Credit Card?

A virtual credit card, VCC, is an electronic version of your regular bank card, Visa or Mastercard. A VCC is designed to give you a more secure, personalized, and accountable online payment method. With the increased identity theft and hacking cases, virtual cards are here to counter that.

These cards only exist electronically but hold the exact details like a physical card. VCCs have grown in popularity since they provide a faster, safer, and easier use than a traditional physical credit card. You can use your VCC to facilitate online payments, either one time or recurring payments.

Benefits of a Virtual Credit Cards

The digital migration of bank cards has positively led to increased use of virtual credit cards. Here are some benefits of using virtual credit cards as opposed to physical cards:

● High-level security

While technology makes our lives easy, some drawbacks come with it, e.g., Fraud and identity theft. Online payment has always been a potential risk; you cannot trust all these websites with your credit card details. However, with VCCs, it is safe and secure. If someone hacks your card information, you only cancel that particular VCC without closing your account.

● Convenience

Have you ever been to a store, wanted to pay for something you purchased, and realized you forgot your credit card in your wallet at home? It is so embracing, right? With a virtual credit card, You don’t have to worry about losing or forgetting it somewhere in a drawer. Since it’s electronic, you carry it with you everywhere you go.

● Visible accountability

Using virtual credit cards makes it easy to track how you’re spending your money. You do not have to go to the bank to get a financial statement. All you need to do is check on the VCC manager app on your phone. Expense management has been optimized. You can seamlessly track your ongoing payments and, more so, get a summary of weekly, monthly or annual expenditure.

What is a Virtual Bank Account?

A virtual bank account, VBA, is an online bank account that you create and access without going to a bank premise physically. With the upsurge of international trade, virtual bank accounts have become popular; hence banks have also moved from physical to virtual banks. There is no paperwork involved; everything is done electronically. Often you will get a video call request from a bank representative to prove your identity.

There are federations that regulate virtual bank accounts to ensure you are not exploited, and your funds are secure. These federations include the United States, European Union, and other state authorities. Most virtual bank account providers offer free account opening, cheap or free Mastercard debit or visa cards, some offer virtual credit cards upon account opening.

How to Open a Virtual Bank Account

There are numerous virtual bank account providers globally. Some work within local jurisdictions, while others are international, borderless. Creating a VBA is simple; however, it depends on geographical location and the provider. Here is a step-by-step guide on how to open a virtual bank account:

• Step 1: Visit the website of your preferred VBA provider. (We’ll give you a list of providers and their geographical location later in this section).

• Step 2: Navigate to account opening or create an account and select a virtual account. Like any other regular bank account, you need to provide all your valid information on the application form.
• Step 3: After correctly filling the application form, select your preferred online transaction or payment method, e.g., PayPal VBA, Payoneer, etc.

• Step 4: On the card section, apply for your preferred transaction card, Visa or Mastercard. You can also request a VCC if available.
• Step 5: Verify the information you provided, accept the terms and conditions and click send to complete the application process.

That’s it. Wait for feedback from your provider, often through the email address you provided.

Virtual Bank Accounts in Different Geographical Location

As aforementioned, there are several local and international VBA providers. Picking one out of the many options available can be a challenging task. As much as there are international laws in which VBA providers conform, Different jurisdictions have their way of regulating VBAs within their location. The table below shows some of the well-known global virtual bank account providers and their geographical coverage:

Advantages of Virtual Bank Accounts

Virtual bank accounts are a relief to bank customers who do many online transactions, international trade and cryptocurrency. VBAs have made business transactions seamless. Here are some of the advantages of having a virtual bank account:

● Easy to open and access

Opening a virtual bank account is a straightforward process since it does not involve going to the band and filling some paperwork. The process takes a few minutes to complete. Once you have your VBA ready, accessing it is instant. All you need is an internet connection and your login details. Again, you don’t need to visit the bank physically.

● Supports Cryptocurrency

Cryptocurrency has become a thing in the modern world. They have become an integral part of today’s global financial system. Today, most organizations accept this form of digital currency. If you are interested in cryptocurrency, a VBA would be your perfect companion.

● Cheaper and easy international transfers

Virtual bank accounts have rapidly become common due to the low transfer fees they offer—most VBAs charge minimal fees for international money transfers to lure more customers.

● No opening and closing times

Unlike the traditional banking model, where banks have a time window in which they operate, virtual banking beats these odds. You can access and manage your VBA any day, any time. You can process transactions during the night or over the weekends—no time restriction.

Disadvantages of Virtual Bank Account

Despite having several benefits, VBAs have a few drawbacks too. Here are some disadvantages of having a virtual bank account:

● No human interaction

Undoubtedly, human interaction makes solving a problem a lot easier. Since VBAs have no physical location, human interaction has been cut off. This makes the inquiries process complicated, unlike in the physical banking system.

● Technical Difficulties

Anywhere technology is involved, technical hitches are inevitable. Internet connection might fail, applications and websites can go down due to planned maintenance or malfunctions. Making a transaction during such a time is impossible, thus an inconvenience to you.

Conclusion

Most banks have embraced technology and are making the most out of it through virtual bank accounts and virtual credit cards. Customers have also demonstrated their loyalty by accepting this shift from traditional to modern digital banking. Virtual credit cards and virtual bank accounts have similar concepts; generally, they have made online business transactions easier, secure and efficient.

Even though VCCs and VBAs have become popular and every financial institution wants to have a piece of this cake, be cautious. Not all providers have appropriate bank accounts. In such cases, your funds could be at risk if the institution goes bankrupt. We recommend that you always do a proper background check before trusting anyone with your funds and personal details.