Virtual card adoption accelerates to Over $5tn in transaction value by 2025
A new report from Juniper Research found that the value of transactions processed by virtual cards will more than treble over the next 5 years; increasing from an anticipated $1.6 trillion (€1.42 trillion) in 2020. Virtual cards are temporary, random digital card numbers that replace core payment details for specific online transactions.
Remote working to give a temporary boost to transactions
The report, Virtual Cards: Consumer & Business Adoption, Competitive Analysis & Market Size 2020-2025, found that B2B virtual cards will account for almost 80% of virtual card transactions by value, as that transaction value doubles over the next 5 years.
For 2020, the report forecasts a 4% decline in spend levels, largely due to the reduction in business travel and online travel booking. This is in contrast to an 11% increase in the number of transactions forecast for the same period. This usage increase is being driven by businesses needing to authorise spend remotely. Despite this, Juniper Research expects usage to remain low, with only 3% of businesses using virtual cards, as high processing charges for cards make suppliers reluctant to accept them.
Consumer market still small scale, despite the Apple card
Consumer virtual card products to date have been mostly small scale and not used to their full potential, according to the report. Although the Apple Card has made virtual card capabilities more prominent, Juniper Research believes its current positioning and feature restrictions will hold the market back; despite virtual cards processing over $1 billion (€0.89 billion) in 2025, less than 20% of people making online purchases will use them.
“Virtual cards often require additional software to use, which the average eCommerce user is not going to take the time to set up for mostly unseen benefits,” remarked research author James Moar. “The technology needs to become more automatic, and allow more features, if it is ever going to gain traction beyond a few specific products in the consumer market.”
For more insights, download the free whitepaper, Are Virtual Cards Ready for Primetime?
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