Key Takeaways
Virtual cards only exist online and are best for safer online payments like shopping and subscriptions.
Physical cards are still essential for in-store payments, travel, and ATM withdrawals. However, they carry risks like loss or fraud.
If you want the most flexibility and control, using both virtual and physical cards is often the better choice.
The way we pay has changed. Today, you can swipe a plastic card at checkout or tap to pay with a virtual one on your phone.
So, what’s the real difference, and how do you know which one is right for you?
This article explains how physical and virtual cards work, their pros and cons, and how to decide which is best for your spending needs.
What Is a Physical Card?
Physical payment cards are regular plastic debit cards or credit cards issued by banks or financial institutions to their customers to manage their personal or business spending.
This traditional purchase card features the cardholder's name, a 16-digit card number, a magnetic strip, a PIN code, an expiration date, the cardholder's name, and a CVV (Card Verification Value) or CVC (Card Verification Code). The information is often written on the cards.
Physical cards are well-suited for point-of-sale transactions and withdrawing cash from ATMs. They can also be used for shopping online, but the process involves entering credit card details manually, potentially posing security risks.
Tip: The CVV or CVC, a security code on credit and debit cards, is essentially the same with different names. Visa uses CVV, and Mastercard® uses CVC.
Pros and Cons of Physical Cards
✅Widely accepted in physical stores and ATMs: Can be used almost anywhere, physical stores, ATMs, and online.
✅Familiar and easy to use: Familiar to most users, no setup is required beyond activation.
❌Risk of loss or theft: Physical cards have a higher chance of being lost or stolen due to their tangible nature.
❌Takes time to issue or replace: Lost or expired cards need to be physically mailed, causing delays and potential inconvenience.
❌Online security risks: Card details can be compromised if entered on insecure websites.
What Is a Virtual Card?
Virtual debit cards and virtual credit cards are payment cards exclusively stored and accessed through mobile phones. They can either serve as a digital version of your physical card or function independently as a standalone virtual card.
They have almost all the properties of a physical card, including the 16-digit number, a CVC or CVV code, an expiration date, and a PIN code.
Virtual cards are ideal for online shopping and managing recurring payments. Some physical stores may accept virtual cards, but it's crucial to note that not all establishments support them.
Pros and Cons of Virtual Cards
✅ Instant issuance: No need to wait for delivery, your card is ready immediately.
✅Enhanced security: Can be locked, deleted, or used for one-time purchases to prevent fraud.
✅Flexible control: Set spending limits, issue multiple cards, and monitor usage easily.
❌Not widely accepted: Not all merchants or ATMs accept virtual cards.
❌May not work at physical terminals without mobile wallets: Only usable offline if added to Google Pay or Apple Pay.
❌No ATM access: Without a physical card, you can't withdraw cash from ATMs.
Tip: Explore more about what is a virtual card and how virtual cards can benefit you in our guides.
What Are the Differences Between Physical and Virtual Cards?
While both cards let you make payments and track spending, they differ in how they’re used, how secure they are, and how much control you have.
The table below breaks down the differences between physical and virtual cards.
| Category | Physical Card | Virtual Card |
|---|---|---|
| Spending Use | Designed for in-person and ATM use Can be used online but with more risk |
Best for online shopping and subscriptions Not always accepted in-store or at ATMs |
| Security | Vulnerable to theft and skimming EMV chip adds some protection Exposes card details when used online |
Not vulnerable to skimming Can use disposable or merchant-specific card numbers Main risks come from phishing or cyberattacks |
| Control & Management | Some controls available via app Changes may require contacting support |
Easily freeze, delete, or set limits via app Customise usage by category, merchant, or time |
| Business & Accounting | More manual to manage across teams May need extra tools for accounting |
Assign to staff or departments Real-time spend tracking Easier to integrate with accounting tools |
| Setup & Features | Requires production and delivery Fewer built-in features |
Created instantly via app Often includes spend analytics No production or delivery cost |
Now, let’s dive into each section for details.
Type of Spending: Online vs In-Person
Physical cards are designed for in-person transactions, including at shops, restaurants, and ATMs. They can also be used online, but doing so exposes your card number and security code, increasing the risk of fraud.
Virtual cards, in contrast, are built for online use, including eCommerce, digital subscriptions, and app purchases. They often generate single-use or disposable numbers, keeping your real card details hidden from merchants.
For instance, Revolut’s single-use virtual card creates a new number after every transaction, adding a layer of protection.
However, virtual cards may not work in-store or at ATMs, unless added to a digital wallet that supports contactless payments.
Tip: If you need cash and your card is virtual-only, check if your provider allows transfers to a linked account that supports ATM withdrawals or debit access.
Security Risks & Protection
Physical cards face risks such as theft, loss, or skimming (where fraudsters copy your card details from ATMs or terminals). Security features like EMV chips help protect in-store transactions by generating unique codes, and most cards come with fraud alerts for suspicious activity.
Virtual cards are not vulnerable to skimming because they don’t exist in physical form. Instead, they may be exposed to phishing, hacking, or malware. But they come with strong digital protection features such as:
- One-time-use card numbers
- Merchant-specific locks
- Optional expiry dates
Both card types benefit from issuer-level security monitoring and fraud resolution.
Tip: Add either type of card to a digital wallet like Apple Pay or Google Pay. These use tokenisation, hiding your real card number and improving safety.
Expense Control & Card Management
Physical cards now offer some online management features via banking apps, such as spend alerts or basic limits. However, changes like freezing the card or adjusting settings may still require manual contact with the provider.
Virtual cards typically offer more control. Through your provider’s app, you can:
- Set daily or monthly spend limits
- Restrict use by merchant type or category
- Manage subscriptions
- Freeze or cancel a card instantly
This makes them ideal for users who want hands-on control over card activity.
Business Use & Accounting Integration
Physical cards are commonly used for employee expenses, but are less flexible. Assigning cards to multiple users, tracking usage by department, or enforcing controls can be more manual and time-consuming. Integration with accounting tools may require extra effort or third-party apps.
For businesses, virtual cards are a flexible way to manage team spending. You can:
- Assign specific cards to employees or departments
- Set rules per vendor or spending limit
- Monitor activity in real-time
- Sync transactions with accounting tools like Xero or QuickBooks
If your company is looking for a more scalable solution, corporate cards, especially those available in both physical and virtual formats, can streamline spending across teams. These are designed to offer custom controls, track budgets in real time, and integrate seamlessly with your accounting system.
For teams managing recurring payments or decentralised spending, virtual cards save both time and admin effort.
Setup Time & Delivery
Physical cards require manufacturing and shipping, which can take days. There’s also the cost of printing and delivery, especially for businesses issuing multiple cards. Virtual cards are issued instantly. You can generate one in minutes through a mobile or web app.
Features & Insights
Virtual cards often include built-in spending analytics, helping users and finance teams:
- Identify overspending
- Track budgets
- Allocate funds more efficiently
Physical cards don’t usually offer this level of insight on their own. You’ll need to rely on external apps or integrations to get similar data.
Which Is Better, Physical or Virtual Cards?
The right choice depends on how you plan to use the card, your spending habits, and the level of control or convenience you need. To help you decide, consider the questions below:
1. Will you be travelling or need cash access?
A physical card is essential for withdrawing money or paying at shops, hotels, and restaurants that don’t accept digital wallets or virtual cards.
2. Are you mostly buying online or managing digital subscriptions?
Virtual cards are ideal for online purchases. They offer more control and reduce the risk of your card details being exposed or reused.
3. Do you need a card immediately or just for short-term use?
Virtual cards can be created and used within minutes without waiting for delivery.
4. Are you managing team or business expenses?
Virtual cards let you assign spending per team member or category. But for general-purpose access (e.g. travel expenses), a physical card may still be required.
Tip: If you want flexibility, consider using both card types. Use a virtual card for safer online payments, and keep a physical one for travel, cash withdrawals, or places that don’t accept digital wallets.
Final Note
In the end, the choice between physical and virtual cards comes down to how and where you spend. Each offers distinct advantages depending on your needs, whether it's online control, in-person access, or a bit of both.
If you are looking into getting physical and virtual payment cards for your business and employees, consider opening a business account with Statrys. You’ll get access to both physical and virtual cards, tailored for business use and designed to help you manage expenses with ease.
FAQs
What are virtual payment cards?
Virtual debit or credit payment cards are accessed only through mobile phones. They have all the properties of a physical card, including the 16-digit number, a CVC, expiry date, and a PIN code.
