An electronic credit card is a digital version of a traditional credit card that exists only in electronic form and is typically used for online transactions. The cardholder is given a virtual card number, expiration date, and card verification value (CVV) or security code to complete purchases. Electronic credit cards are often temporary or single-use, designed to protect your real credit card details from being exposed during online transactions.

The use of electronic cards is on the rise, and the global virtual card market is projected to grow at a compound annual growth rate of 21.2% from 2025–2030. Below, we’ll explain how electronic credit cards work, how businesses can issue them, and what security features keep them safe.

What’s in this article?

• How does an electronic credit card work?
  
• How do electronic credit cards differ from physical cards?
  
• What are the benefits of electronic credit cards?
  
• How can businesses issue electronic credit cards?
  
• What are common use cases for electronic credit cards?
  
• What security features make electronic credit cards safer?
  

How does an electronic credit card work?

When you request an electronic credit card, you receive a unique virtual card number, expiration date, and CVV. You can use the virtual card details just as you would a physical card to shop online, pay for subscriptions, or make other digital purchases. Charges made with the electronic credit card are billed the same way as those made with a physical card, and they show up on your monthly statement.

Many electronic credit cards have features such as single-use numbers and the ability to set spending limits and expiration dates. These features limit the damage if the virtual card details are compromised.

How do electronic credit cards differ from physical cards?

Electronic credit cards are entirely digital. The cardholder receives only a virtual card number, expiration date, and CVV. You can usually add these cards to a digital wallet and deactivate or adjust settings (such as spending limits) from an app. Physical cards are the traditional plastic or metal cards you carry in your wallet. They’re what you swipe, dip, or tap at checkout in stores.

Electronic credit cards are well suited to online shopping or any situation where you don’t physically hand over a card. Physical cards are useful for everyday in-person purchases and work in situations where electronic credit cards wouldn’t, such as paying via a physical point-of-sale system that doesn’t accept digital wallets.

Electronic cards add an extra layer of security. Most of these cards create unique or temporary card numbers for each transaction or store. So even if someone else gains access to these details, they can’t use them to make other purchases. Physical cards come with security measures such as EMV (Europay, Mastercard, and Visa) chip technology and encryption, but if someone steals your card or copies it, they could potentially use it until you cancel it.

What are the benefits of electronic credit cards?

Electronic credit cards can make a difference for businesses, especially regarding security, efficiency, and managing spending. Here’s why they’re worth considering.

They’re more secure

Since electronic credit cards generate unique virtual card numbers, your account details stay hidden. This lowers the risk of fraud, which is important for businesses that want to protect their sensitive payment data.

They give you more control

You can set spending limits and expiration dates and restrict where a card can be used. This makes electronic credit cards a good choice for managing employee expenses, vendor payments, and subscriptions.

They’re easy to use

If you need a new card, you can generate one in seconds through your bank’s app or platform—no need to wait for a physical card to arrive. It’s a faster, more flexible way to handle purchases, especially for recurring payments or one-off transactions.

They’re perfect for remote teams

If you have employees who work remotely or across multiple locations, electronic credit cards can make it easier to give them cards. You can issue your employee a card virtually and they can use it right away—without waiting for a physical card to arrive in the mail.

They make expense tracking easier

Electronic credit cards integrate with most expense management tools. You can monitor spending in real time, match payments to invoices, and eliminate some of the administrative effort of reconciling accounts.

How can businesses issue electronic credit cards?

Businesses can issue electronic credit cards by using platforms such as Stripe Issuing, which provides tools to create and manage virtual cards. Here’s how the process generally works.

Set up a platform account

Businesses start by signing up for a payments platform that offers virtual card services, such as Issuing. This integrates with your existing financial systems or payment workflows so you can manage cards alongside your other payment activities.

Generate virtual cards

Once your account is set up, you can instantly create virtual credit cards through the platform’s dashboard or application programming interface (API). You can customize each card by setting spending limits and expiration dates and restricting its use to specific vendors or categories.

Distribute cards to teams or vendors

You can share virtual cards with employees, contractors, or vendors via email or other digital methods. This removes the need for businesses with remote or distributed teams to issue and ship physical cards.

Track and manage usage

Platforms such as Issuing give you real-time visibility into how each card is being used. You can monitor transactions as they happen, make adjustments immediately (e.g., updating limits, canceling a card), and program automated controls to prevent unauthorized spending.

What are common use cases for electronic credit cards?

Electronic credit cards are flexible, secure, and a good choice for both everyday spending and one-off payments. They give you more control and visibility into how you’re spending your money while minimizing the risks that come with traditional cards. Here are some of the most common ways businesses use electronic credit cards:

• Employee spending: These cards are perfect for managing employee purchases, especially for remote workers or contractors. Instead of handing out physical cards, you can issue a virtual card with a set spending limit for travel, supplies, or project-related costs.

• Subscriptions: Virtual cards work well for recurring payments, such as software subscriptions and cloud services. You can control how much is charged, and if a subscription auto-renews unexpectedly, you can shut the card down to avoid unwanted charges.

• Vendor payments: These cards are great for paying vendors, especially for one-off purchases. You can create a card specifically for a vendor, use it for the transaction, and deactivate it afterward to eliminate any risk of unauthorized use.

• Ad campaigns: Many businesses use virtual cards for online advertising. You can assign separate cards to campaigns or platforms such as Google Ads and Facebook to make it easier to track spending and stick to your budgets.

• Riskier transactions: If you’re paying a new or unfamiliar vendor, virtual cards offer another layer of security. Since they’re not tied to your main account and can be limited to specific uses, they lower the risk of fraud.

• Free trials: Virtual cards are a good choice when you sign up for software trials or demos. You can set them up with a low spending limit or short expiration date so you don’t get billed after the trial ends.

• Team or department budgets: You can use virtual cards to give teams control over parts of their budgets. For example, marketing might get a card for design tools or ad spend, while IT has one for hardware purchases. These cards separate different types of spending and make them easier to track.

• International payments: When you handle global transactions, virtual cards are a simple, secure option. You don’t need to worry about carrying physical cards, and many platforms make handling foreign currencies straightforward.

What security features make electronic credit cards safer?

Electronic credit cards come with several built-in security features that make them safer than traditional cards, especially for online transactions, vendor payments, and any situation where you want to protect your primary account details. They’re designed to minimize risk while giving you full control over how you use them. Here’s what sets them apart:

• Unique virtual card numbers: Each virtual card has its own number that’s separate from your main account. Your actual details are never shared during transactions.

• Spending limits: You can set strict spending caps on virtual cards to ensure they can’t be used for unauthorized charges. This is especially helpful for employee purchases or vendor payments.

• Custom expiration dates: Virtual cards can have short expiration dates, such as within a few days or even hours. If someone tries to use the card details after it’s expired, the transaction will be declined.

• Transaction restrictions: You can restrict virtual cards to specific types of purchases, certain vendors, or defined categories. For example, a card might work for only travel expenses or a particular subscription.

• Real-time monitoring: Most platforms that offer electronic credit cards allow you to monitor transactions in real time. This makes it easier to spot any unusual activity and act quickly to shut down a card, if needed.

• Instant deactivation: If a virtual card is compromised, you can cancel it immediately through an app or dashboard without affecting your main account. Since the card is virtual, there’s no need to wait for a physical replacement.

• Encryption and tokenization: Virtual card details are encrypted during transactions, which adds another layer of protection. Many platforms also use tokenization, where sensitive data is replaced with a randomly generated equivalent called a token.

• No physical card risk: Since there’s no physical card to lose or steal, electronic credit cards eliminate risks such as skimming and theft.