Virtual Cards Market

Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2023-2030 - By Product, Technology, Grade, Application, End-user, Region: (North America, Europe, Asia Pacific, Latin America and Middle East and Africa)

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Industry: Information & Communications Technology

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Exponential Rise in Online Payment Transactions, and Growing Ubiquity of Smartphone Usage to Drive Virtual Cards Market Ahead

The software that enables payments and credit card use is evolving rapidly. While virtual-only cards are being touted as the future of payments, global virtual cards market is likely to observe remarkable growth in the next few years. Their mainstream use is mostly the result of emerging technologies like virtual wallets, challenger banks, and payment accounts. Virtual wallets like Apple Pay, Google Pay, and Samsung Pay to name a few allow users to use their existing physical cards but rather than carrying the physical cards, users can use their cards over their phone’s NFC sensors. Recently, virtual wallets have found some success in wearables with the likes of Apple Pay, and Garmin Pay for smart watches. These are linked to actual physical cards which need to be activated in traditional ways like online activation or an ATM withdrawal. Challenger banks and payment accounts like Revolut, Monese, and Wirex on the other hand began to offer a new type of card which is virtual. These cards are created and delivered to end users via an app and can be used immediately. Auto-generated credit card numbers that are created for a specific purchase and can only be used once.

However, virtual cards market is also facing a set of limitations, especially their prominent usability only for online credit card payments that makes the unsuitable to be used in certain cases. This limitation does not seem to harm the market at a large extent as the world has seen an explosive expansion every online merchant accepts Visa or Mastercard, which are the two top issuers of virtual credit cards. In fact, the Wall Street Journal reports that they are the fastest growing category in the payment industry, and Billtrust claims that virtual card spending will overtake traditional purchasing cards very soon.

Soaring Popularity of Contactless Transactions to Bode Well for Virtual Cards Market

Global virtual cards market is expected to expand significantly in future. The industry would proliferate due to the increased adoption of digital platforms and online payment methods. As they reduce the difficulty and expense of processing paper and storing physical cards, virtual cards are gaining popularity. The epidemic has increased the demand for contactless payment solutions, with numerous new contactless spending options entering virtual cards market.  Innovative cashless payment mechanisms such as mobile wallets, peer-to-peer (P2P) mobile payments, real-time payments, and cryptocurrencies are fast evolving. With improved broadband access, increased mobile commerce, new technologies such as AI, and VR, billions of people in both developed and developing countries have begun to embrace contactless payments. The number of people utilising mobile eWallets to make payments increased from 900 million to 1.48 billion during the pandemic. According to worldwide payment reports for 2021, mobile wallets accounted for 25.7 percent of POS payments.

As the global use of smartphones, online payment methods, and online shopping grows due to urbanisation, so will the need for virtual cards. The rising disposable income, increase consumer spending on consumer electronics, and changing lifestyles will increase the sales of smartphones. In 2022, the world's smartphone users will total 6.648 billion, or 83.72 percent of the global population. In total, 7.26 billion individuals own a smart or feature phone, accounting for 91.54 percent of the world's population. With growing penetration of smartphones, virtual cards market will also exhibit notable growth in the near future.

B2B Virtual Cards Foreseen to be Dominant with their Improved Business Transaction Convenience

The benefits of payment automation, operational cost reductions, the prevention of excessive spending, access to real-time spending data, and the digital experiences professionals have had as consumers are driving the adoption of virtual cards in the B2B industry. Businesses began to use virtual cards significantly, with many organisations combining to offer virtual cards and provide customers with a better experience. Virtual card growth has been fuelled by the evolution of digital technology and the demand for solutions that offer efficiency and convenience across company processes. The rising export and import of goods and services worldwide have driven the need for B2B payments among businesses.

Stupendous E-commerce Expansion Boosts Market Growth Across Asia Pacific

The Asia Pacific is expected to be the fastest-growing region in the virtual cards market throughout the estimated period due to factors such as increasing smartphone manufacturing and increased smartphone and Internet penetration in the area. The APAC region includes growing countries such as China, and India and developed economies such as Japan. Such economies are experiencing rapid expansion in smartphone use, Internet penetration, and increased urbanisation in developing countries. In 2021, approximately 24.5 percent of total retail sales in China were made online, with around 780 million people shopping online. Consumers in these countries are more drawn to purchase online as Internet penetration grows and online shopping trends are altering numerous elements of retail and e-commerce in the region. It ultimately drives the demand for virtual cards in the APAC area. Technology advancements and increased government initiatives for digital transformation are projected to drive the overall growth of the virtual cards market. As a result, these variables propel the Asia Pacific virtual cards market.

The virtual cards market in Europe is expected to increase over the forecast period, owing to the increasing popularity of online payments owing to the rapid rise of the e-commerce industry during the COVID-19 pandemic. The overall transaction value in digital payments in Europe is expected to reach USD 1675 billion in 2022, with the average transaction value per person in digital commerce being USD 2000. As business travel continues to rebound, Europe is seeing a surge in the use of virtual cards in favour of traditional plastic corporate cards. Virtual cards gradually infiltrate the UK financial system, with new businesses being licensed regularly. Digital banks grew significantly in the United Kingdom as people began to choose Internet banking over traditional in-branch banking. In 2021, it was discovered that 96 percent of the Norwegian population used online banking sites, making Norway the European country with the highest Internet banking penetration. This is likely to propel the growth of virtual cards market in the region.

Global Virtual Cards Market: Competitive Landscape

Companies in the market are introducing new products and forming collaborations, alliances, and partnership agreements. In May 2022, Mastercard and fintech behemoth OPay established a strategic alliance, paving the way for greater financial inclusion and economic development by bringing digital commerce to millions of individuals across the Middle East and Africa. With a Mastercard virtual payment solution linked to the OPay eWallet, OPay customers and merchants in the region can engage with brands and businesses anywhere in the world. In April 2022, American Express Company partnered with Billtrust, a B2B accounts receivable automation and integrated payments leader, to help suppliers accept American Express virtual cards more easily.

A few of the players in the virtual cards market include Abine, Inc., American Express Company, Billtrust, Inc., Cryptopay, CSI (Corporate Spending Innovations), Divipay PTY Ltd., Emburse, LLC, Fraedom Holdings Limited, JP Morgan Chase, Marqeta Inc, Mastercard Incorporated, MineralTree, Inc., Qonto, Skrill, Stripe, WEX Inc., and Wirecard AG.

Global Virtual Cards Market is Segmented as below:

By Product Type

  • B2B Virtual Cards
  • B2C Remote Payment Virtual Cards
  • B2C POS Virtual Cards

By End User

  • Consumer Use
  • Business Use

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • UK
    • France
    • Germany
    • Russia
    • Rest of Europe
  • Asia Pacific
    • Japan
    • South Korea
    • India
    • China
    • Rest of Asia Pacific
    • Latin America
    • Middle East

Key Elements Included In The Study: Global Virtual Cards Market

  • Virtual Cards Market by Product/Technology/Grade, Application/End-user, and Region
  • Executive Summary (Opportunity Analysis and Key Trends)
  • Historical Market Size and Estimates, Value, 2018 - 2021
  • Market Value at Regional and Country Level, 2022 - 2029
  • Market Dynamics and Economic Overview
  • Market Size in Value, Growth Rates, and Forecast Figures, 2022 - 2029
  • Competitive Intelligence with Financials, Key Developments, and Portfolio of Leading Companies 
  • Regional and Product/Grade/Application/End-user Price Trends Analysis
  • Value Chain and Five Force’s Analysis
  • Regional/Sub-region/Country Market Size and Trend Analysis
  • Company Market Share Analysis and Key Player Profiles

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