Virtual cards make life easy but beware of fraudsters

Technology is both a blessing and a curse

- By Mzwandile kaBizokwakhe

Since the Covid-19 outbreak, online trade has skyrocketed, with many retailers reporting a boom.

And with this, the National Financial Ombud Scheme (NFO) admits to a spike in digital banking fraud complaints.

According to the NFO, in the first six months of last year, it received 1436 complaints, but that number rose to 2483 – a staggering 73% year-on-year increase – in the same period this year.

In contrast, ATM card fraud complaints, though rising, grew only marginally from 237 to 332. This data marks a dramatic shift in card fraud from the physical to the virtual realm.

And as this virtual shift ramps up its rapid takeover of the physical, so will the fraud, since virtual banking cards are now a standard feature across all digital banking platforms.

But what are virtual bank cards?

These are means of payment loaded onto phones and smartwatches to offer greater convenience compared to traditional plastic cards. However, this very digital revolution is creating a fertile new ground for fraudsters, leading to a dramatic surge in consumer complaints and significant financial losses.

Yet, the virtual card march will continue because the technology provides instant access through a secure banking app, allowing for seamless online shopping and in-store tap-to-pay transactions.