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The virtual cards market size is forecast to increase by USD 590.17 billion at a CAGR of 21.26% between 2023 and 2028. The market is experiencing significant growth, driven by the increasing focus on customer satisfaction and convenience. This trend is further fueled by the emergence of Near Field Communication (NFC)-based payment technology, enabling contactless transactions. Moreover, regulations on contactless payment transactions are encouraging their adoption, leading to market expansion. Virtual cards offer enhanced security features, such as tokenization and real-time transaction monitoring, making them an attractive alternative to traditional payment methods. The market is expected to continue its growth trajectory, with increasing acceptance among businesses and consumers alike.
The market is witnessing significant growth due to the increasing trend of digital transactions. The Mastercard Payment Index reports that electronic payments accounted for over 50% of all transactions in 2020. Virtual cards, as a contactless payment solution, offer cutting-edge features such as biometrics, tokenization, and QR code scanning, enhancing user experience. Digital currencies and virtual banks are also driving the adoption of virtual cards for online purchases. However, the market faces challenges such as fraud and data leakage. To mitigate these risks, virtual card systems incorporate advanced security measures like encryption and multi-factor authentication. Incorrect labels and low-quality products are other challenges in the market.
Fintech firms are addressing these issues by offering high-quality virtual cards with improved user interfaces and seamless integration with electronic payment systems. ACH payments and e-commerce fraud are other areas of concern, necessitating continuous innovation in virtual card technology. Smartphones have become the preferred device for digital transactions, making virtual cards an essential component of the electronic payment ecosystem. The market is expected to grow further as more businesses adopt virtual card solutions to streamline their payment processes and improve customer satisfaction.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The B2B virtual cards segment is estimated to witness significant growth during the forecast period. The market is experiencing significant growth due to the increasing trend of digital transactions and the adoption of advanced payment technology. According to the MasterCard Payment Index, biometrics and tokenization are becoming increasingly popular for secure and user-friendly electronic transactions. The market is segmented into business use and consumer use, with the business use segment dominating in terms of value and size. This is largely due to the increase in real-time digital disbursements in mobile platforms, driven by the increased penetration of the Internet and 5G/4G technology. Virtual cards offer cutting-edge features such as QR code payments, touchless payments, and ACH payments, making them a preferred choice for online purchases.
The credit card and debit card segments are also adopting virtual cards to offer contactless payment solutions and improve user experience. Fintech firms and virtual banks are also entering the market, offering innovative solutions and challenging traditional banking institutions. However, the market also faces challenges such as fraud, data leakage, and e-commerce fraud. To address these concerns, payment technology companies are focusing on implementing strong security measures, including biometric authentication and tokenization. Millennials, who are tech-savvy and prefer digital payment systems, are driving the market growth. The production of smartphones and the availability of digital payment systems are also contributing to the digital transformation.
Despite the opportunities, the market also faces challenges such as incorrect labels and low-quality products, which can negatively impact the user experience and market reputation. Venture-capital firms are investing in virtual card systems to establish relationships with their business clients and generate and track potential leads. Overall, the market is poised for significant growth in the coming years, offering tremendous opportunities for suppliers and vendors.
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The B2B virtual cards segment accounted for USD 69.95 billion in 2018 and showed a gradual increase during the forecast period.
North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market in North America is experiencing significant growth due to the increasing adoption of digital wallet technology and contactless payments. In 2023, the US and Canada led the market, with major vendors such as Mastercard, American Express, and JPMorgan Chase dominating the landscape. These companies offer virtual cards that provide benefits like improved efficiency and convenience for B2B transactions. Virtual cards enable completely automated payments, eliminating the need for manual processing and reducing time and resources. American Express Go is an example of a virtual card solution tailored for businesses, enabling them to issue virtual cards to employees for specific expenses.
Strategic alliances between vendors and businesses further boost the market's growth, as they facilitate seamless integration and adoption of virtual cards for various business operations.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Focus on high customer satisfaction is the key driver of the market. The digital transactions market is witnessing significant growth due to the increasing preference for contactless payment solutions and the convenience they offer. According to the MasterCard Payment Index, biometrics and tokenization are becoming increasingly popular for secure and user-friendly transactions. Virtual cards, a key component of electronic payment systems, are gaining traction in both the consumer use segment and business use segment. Banks such as Bank of Baroda are offering virtual cards to enhance user experience and provide added security features. Virtual cards enable users to make electronic transactions through digital currencies, QR codes, and ACH payments. Millennials, in particular, are driving the adoption of digital payment systems due to their comfort with technology and preference for touchless payments.
Fintech firms and venture-capitalists are investing heavily in payment technology to offer cutting-edge features and compete with traditional financial institutions. However, the growth of virtual cards also brings challenges such as fraud and data leakage. E-commerce fraud and incorrect labels on low-quality products are major concerns for consumers making online purchases. To mitigate these risks, payment technology must prioritize security and user experience. Smartphones and 5G/4G technology are enabling faster and more secure transactions, while virtual banks offer a more streamlined and efficient experience. In conclusion, the market is poised for significant growth as users increasingly demand flexibility, security, and convenience in their digital transactions.
E-commerce vendors, banks, and fintech firms must collaborate to provide a seamless user experience while prioritizing security and data privacy to build trust and retain customers.
The emergence of NFC-based payment technology is the upcoming trend in the market. The market is witnessing significant growth due to the increasing preference for digital transactions. According to the MasterCard Payment Index, biometric authentication and contactless payment solutions are driving the trend toward electronic transactions. Virtual cards, a type of electronic payment system, offer cutting-edge features such as tokenization and QR code payments. These cards eliminate the need for physical cards, reducing the risk of fraud and data leakage. The market is segmented into credit card, debit card, business use, and consumer use segments. Bank of Baroda and other financial institutions are integrating virtual card systems into their offerings. Millennials and fintech firms are leading the adoption of digital currencies and virtual banks.
The proliferation of smartphones, 5G/4G technology, and internet penetration are accelerating the digital transformation. Virtual cards offer touchless payments through NFC technology, ensuring a seamless user experience. However, incorrect labels and low-quality products may hinder market growth. ACH payments and e-commerce fraud pose challenges, necessitating strong security measures. Venture-capital firms are investing in payment technology to address these challenges and enhance the user experience.
Regulations on contactless payment transactions is a key challenge affecting market growth. Digital transactions have gained significant traction in recent years, with contactless payment solutions, such as virtual cards, becoming increasingly popular. According to the MasterCard Payment Index, biometrics, digital currencies, and QR codes are driving the shift towards electronic payment systems. Virtual cards offer cutting-edge features like tokenization, which replaces the 16-digit card number with a unique digital identifier, enhancing security and reducing the risk of data leakage. However, the use of virtual cards also raises concerns regarding user experience, fraud, and incorrect labels or low-quality products. Regulations, such as the Revised Payment Services Directive 2 (PSD2) in the European Union and the Payment Card Industry Data Security Standard (PCI DSS) in the US, aim to address these challenges by mandating strong customer authentication and security requirements.
In addition, venture-capital firms, fintech companies, and the increasing adoption of 5G/4G technology, smartphone production, and internet penetration are fueling the digital transformation and the growth of virtual card systems in the consumer use and business segments, including credit card and debit card transactions, online purchases, and ACH payments. Despite these advancements, challenges such as e-commerce fraud and the need for touchless payments remain, underscoring the importance of continued innovation and investment in payment technology. Millennials, who are more likely to use digital payment systems, are also driving demand for virtual cards and other digital payment solutions.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Adyen NV - The company provides a selection of virtual cards, including Adyen Master virtual cards, for your use. These cards can function as either single-use or multi-use options, offering you flexibility and convenience in managing your transactions.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is experiencing significant growth due to the increasing trend of digital transactions. According to the Mastercard Payment Index, biometrics, QR codes, and tokenization are driving the adoption of virtual cards in various sectors. The user experience offered by virtual cards, including contactless payment solutions, is a major factor fueling their popularity. However, concerns around fraud and data leakage persist, particularly in the business use segment and online transactions. Virtual cards are increasingly being used for electronic transactions, including ACH payments and e-commerce purchases. Virtual banks and fintech firms are investing in cutting-edge features such as 16-digit card numbers generated on-the-go, touchless payments, and integration with smartphones.
Millennials and the increasing production of smartphones and internet penetration are also contributing to the digital transformation of payment systems. Despite these opportunities, the market faces challenges such as incorrect labels and low-quality products, requiring stringent regulations and quality checks. 5G/4G technology is expected to further boost the growth of virtual cards, enabling faster and more secure transactions. Venture-capital firms are investing heavily in this space to cater to the growing demand for digital payment systems.
Market Scope |
|
Report Coverage |
Details |
Page number |
173 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 21.26% |
Market growth 2024-2028 |
USD 590.17 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
19.77 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 35% |
Key countries |
US, Canada, China, Japan, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Adyen NV, American Express Co., BTRS Holdings Inc., Caxton FX Ltd., Citigroup Inc., Edenred SE, Green Dot Corp., HSBC Holdings Plc, JPMorgan Chase and Co., Marqeta Inc., Mastercard Inc., Paysafe Ltd., Stripe Inc., Travelex International Ltd., U.S. Bancorp, Visa Inc., Walmart Inc., Western Union Holdings Inc., WEX Inc., and Wise Payments Ltd. |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Service
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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