Card Issuer Says Image-Based MasterCards Are As Good As Plastic

At CES 2012, CSI GlobalVCard's Erica Santiago gives a demonstration of how customers of the company can easily generate limited-use virtual credit cards that show up as an image on a smartphone or mobile device.
Perhaps providing a glimpse of the future of micropayments, CSI GlobalVCard is at CES 2012 demonstrating the viability of its virtual credit card technology. The company is an issuer of MasterCard credit cards and debit cards.

What is a virtual credit card?

In the case of CSI GlovalVCard's implementation, a virtual credit card is little more than an image of a legitimate MasterCard (using the PNG file format) that a user displays on the screen of a mobile device like a smartphone or tablet. When making a purchase, the user shows that image to a cashier at a store who would then key the card number into a credit card terminal, finishing the transaction as though a regular plastic credit card was used.

Theoretically, the legitimacy of the virtual card shouldn't be questioned. Merchants accept credit card transactions without the presence of a physical instrument all the time. For example, when someone calls in a credit card order to a pizza place. Or when someone enters a credit card number into a Web site in the course of making an online purchase.

But in the case of a virtual MasterCard generated with CSI GlobalVCard's technology, the account holder can apply all sorts of restrictions to the image-based credit card. For example, as can be seen in the embedded video below, one restriction is the expiration date of the card. Another is the type of merchant it can be used at (eg: a restaurant). The most important one is the amount of money that's available to the card.

In the demonstration given to InformationWeek at CES 2012, CSI GlobalVCard director of marketing Erica Santiago used an iPad to generate a virtual MasterCard with a $5.00 limit over the next month. That virtual MasterCard (an image) was subsequently emailed to the recipient.

According to Santiago, there are several use case scenarios. For example, imagine if a company executive sends an administrative assistant out to buy lunch for the participants in a meeting. In many cases, he or she will just give an actual credit card to the assistant. But in a CSI GlobalVCard scenario, prior to sending that assistant out, the executive can generate a virtual MasterCard that's only good up to a certain amount. This way, the assistant can't run out and make unauthorized purchases with the actual credit card. Or, at least not too many of them.

Though she didn't discuss it, another scenario might be when one family member wants to enable other family members to make credit card purchases, but within certain limits.

There are other potential benefits. For example, if someone is paranoid about his or her credit card data being stolen in the course of making an online transaction, he or she could generate a one-time use card for the exact amount. Since each virtual card has a unique number, it wouldn't matter if the number was stolen or not. Once the virtual card hits its dollar limitation, it's no longer of use to anyone (the cardholder or the thief).

Even though many merchants are used to taking credit card transactions without a physical credit card, the idea of a virtual credit card may require some education of the market before merchants are comfortable with the idea. Santiago said that, currently, the technology's primary use case is for B2B transactions but that CSI GlobalVCard is looking to expand the functionality to cover more consumer usage.

According to Santiago, future versions of the "virtual credit card" will involve the transmission of the virtual credit card number to a credit card terminal using near field communications (NFC) wireless technology.