-1) Mandating physically-issued debit cards means that chance of fraud is lower, due to the fact that the third-party issuer will have already done their KYC/AML checks.
-2) If (a series of) transactions appear to be suspicious, further identity verification and documentation will probably be required. This may entail presenting evidence of the debit card. Given how a virtual card is not in corporeal form, this means that it is harder to verify.