In yet another step forward towards mobile banking, Reliance Communications and HDFC Bank have launched India’s first virtual credit card.
Anyone who has a HDFC Bank credit card and a Reliance mobile can use this service and as per current estimates, around 15 lakh people qualify under this. The card do away with the need for carrying a physical card but instead the mobile phone work as the payment instructor.
Thus the Reliance Mobile becomes the Credit Card while the mobile number becomes the Credit Card number.
Reliance mPay service can be used at various merchant establishments but initially it will be used for payment of Reliance Mobile bills and Reliance Energy electricity bills.
HDFC Bank already has a virtual credit card called NetSafe, which can be used for online shopping.
The advantage of having a Virtual Credit Card is that there are less chances of misuse as a PIN has to be entered at the time of usage. So, even in case of mobile phone loss, the credit card details cannot be used as there is no magnetic reader, signature, or CVV number which is used for authentication.
The concept has been successfully tested in Asian countries and would eventually become a preferred medium of transaction owing to its convenience and safety.