Why Do Virtual Card Providers Now Require Identity Verification?

Why are more customers asking about identity verification?

‘I only want to open a virtual card. Why do I need to verify my identity?’

Existing customers who have used virtual cards before also ask:

‘Was this required before? Why are the requirements becoming stricter?’

A few years ago, some virtual card providers had fewer requirements, and users could open a card soon after registering. Today, some providers require identity details at registration, others verify users when they open a card, and some also request proof of address.

After several years in this business, I see this as an understandable change.

Providers now consider more than whether they can issue a card.

Why does a provider need to know who you are?

The principle is straightforward.

Although a virtual card has no physical form, it still relies on card issuers and payment channels.

Ordinary spending is generally unremarkable.

But a provider will examine an account that opens dozens of cards, adds funds, makes few purchases, and cancels the cards a few days later. Frequent refunds and chargebacks over a longer period also attract attention.

The customer may feel they have done nothing unusual.

The provider, however, looks at account activity over time rather than at a single transaction.

Many providers therefore verify identity first.

This means they know who is using the account if a problem arises.

That is one reason identity verification has become more common.

Another common issue: Opening cards in batches

Batch card issuance is another pattern providers encounter.

Opening several cards at once can be normal.

But opening many cards in a short period, canceling them without spending, and then repeating the process through another account a few days later is more likely to attract attention.

The provider cannot immediately tell whether this is ordinary use, large-scale card testing, or something else.

Some providers therefore assess card issuance counts, spending amounts, and transaction status together.

Opening many cards does not automatically indicate a problem. A mismatch between the number of cards issued and actual spending is more likely to trigger a review.

That distinction matters.

Identity verification and risk controls are different

I often explain this distinction:

Identity verification establishes who you are; risk controls assess how you use the service.

After verification, an account used consistently for AI subscriptions, SaaS services, or advertising with ordinary spending amounts will usually not stand out.

However, opening many cards immediately after registration and frequently adding funds, making transactions, and obtaining refunds can still trigger a review after identity verification.

Customers sometimes ask:

‘I have already verified my identity. Why is my account still being reviewed?’

These processes are not contradictory.

Identity verification does not grant unrestricted permission for all future activity.

Why is verification required when opening a card, but not during registration?

This is another common question.

Creating an account and using payment functions are different steps.

Some providers allow account creation first, then verify identity and region when users open a card, add funds, or make transactions.

It is therefore unsurprising that registration succeeds while card opening requires further verification.

Some customers ask:

‘I entered my address during registration. Why must I now provide proof?’

An address entered during registration is not the same as a place of residence verified through KYC.

For cross-border payments, some regions are outside the provider’s service area, making further confirmation necessary.

Why might proof of address be required?

Customers sometimes ask:

‘I have already provided my ID. Why do you need proof of address?’

The documents verify different information.

An identity document primarily verifies who you are.

Proof of address primarily verifies where you live.

A request for proof of address does not necessarily mean there is a problem with the account. It can be a normal part of verification.

If registration details, identity documents, and address information do not match, further verification may be needed.

When customers ask about identity verification, I try to keep the explanation simple.

Submit accurate identity information that reflects your actual circumstances.

Customers may find the process inconvenient, but providers also incur manual and system costs when reviewing accounts. A straightforward process benefits both sides.

The industry has nevertheless changed from a few years ago.

Previously, customers mainly asked:

How much does a card cost? How long does opening take? Which BIN works?

Now they ask additional questions:

Why is KYC required? Why must I provide proof of address? Why is there a review? Why can I not open more cards?

These questions reflect a change:

Virtual card providers increasingly assess account-level risks rather than focusing only on issuing cards.

If you have recently been asked to verify your identity before opening a virtual card, this is not particularly surprising.

It does not mean you have been singled out or that something is necessarily wrong with your account.

Opening a card now often involves more identity and risk checks than it did in previous years.

For ordinary use, preparing accurate, consistent information can prevent difficulties later.

After years of working with virtual cards, my greatest concern is not the inconvenience of identity verification. It is an account that initially looks normal but later accumulates unusual transactions, refunds, and chargebacks that everyone must help resolve.

Those situations can be difficult to handle.

If you face identity verification, proof-of-address requirements, or a card opening review and do not understand why additional information is requested, you can contact me privately.

I work with virtual card providers and encounter many different situations. You can describe your situation so we can discuss the possible reasons and information required.

There is no obligation to open a card. You can clarify the issue first.