Virtual Cards Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, Canada, China, Japan, Germany - Size and Forecast 2024-2028

Virtual Cards Market Forecast 2024-2028

The virtual cards market size is projected to reach USD 954.10 billion by 2028, at a CAGR of 21.26% from 2023 to 2028. The paramount driver of market expansion lies in the emphasis on achieving high customer satisfaction. Escalating competition among local and international players, driven by shifting user demands and increasing product/service prices, underscores the imperative for market players to enhance competitive strategies, focusing on delivering quality customer service to ensure elevated satisfaction levels. Many e-commerce firms introduce innovative services, such as order placement flexibility via C2B POS virtual cards and diverse payment options through electronic payment systems and ACH payments.

Additionally, e-commerce software amplifies organizational growth by bolstering online presence and operational efficiencies, providing a competitive edge. These endeavors aimed at improving end-user experiences are poised to propel the global market growth during the forecast period. The integration of virtual cards with blockchain emerges as a primary trend, leveraging blockchain's inherent security features like immutability and decentralization to fortify virtual card security.

Blockchain's peer-to-peer architecture eliminates intermediaries, streamlining payments and potentially reducing transaction costs, while its global reach and swift settlement capabilities can expedite international transactions, benefiting consumers and businesses across borders. Digital currencies and QR codes further enhance the efficiency and security of electronic payments, facilitating the import and export of goods and services while reducing the risk of incorrect labels and credit/debit card information misuse.

What will be the Size of the Market During the Forecast Period?

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Market Segmentation By Product 

The market share growth by the B2B virtual cards segment will be significant during the forecast period. Companies operating in industries like banking, financial services, and insurance (BFSI), e-commerce, healthcare and life sciences, education, utilities, retail, and others are the key contributors to market growth in this segment. The market players integrate near-field communication (NFC) chips into their devices to provide consumers access to a wide range of applications, such as contactless payments.

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The B2B virtual cards segment showed a gradual increase in the market share of USD 69.95 billion in 2018. Furthermore, due to the increase in the usage of virtual-cards, there is a big opportunity for suppliers to generate and track potential leads, offering further suppliers a tremendous opportunity to establish relationships with their business clients. In addition, it also assists the market players in better positioning themselves to strengthen relationships with existing customers and potential B2B clients by highlighting the different compelling characteristics of virtual cards. Therefore, such innovations are anticipated to fuel the demand for B2B virtual cards, which will leverage the expansion of the global market through the B2B virtual cards segment during the forecast period.

Market Segmentation By Service

The business use segment will account for the largest share of this segment.? Virtual cards allow organizations to streamline their expense processes by issuing cards for specific purposes or projects, tracking expenditures in real-time, and simplifying reconciliation. This leads to improved financial control and transparency, saving time and resources for businesses. Virtual cards offer flexibility and convenience, making them well-suited for various business scenarios.  Additionally, virtual-cards facilitate automation in B2B payments, streamlining accounts payable processes and reducing manual workload. Compared with traditional corporate cards, virtual cards often incur lower online transactions fees, resulting in cost savings for businesses. Hence, with increased demand for secure, streamlined, and cost-efficient payment solutions among businesses, the global market is anticipated to grow significantly through the business use segment during the forecast period.

Regional Overview

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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. In 2023, the US and Canada were the market leaders, owing to the presence of major market players, such as Mastercard, American Express, and JPMorgan Chase, that deliver virtual-cards with advantages, including efficiency and convenience of paying. Furthermore, virtual cards can assist in improving organizational efficiency by enabling completely automated touchless payments, reducing the time and resources required to do such operations manually. 

Additionally, raised penetration of the Internet across North America, aided by the applications of blockchain technology, provides additional security and trust to the digital payment ecosystem by minimizing further the danger of fraud. It also allows market players to buy cryptocurrencies using 16-digit card number in a more secure manner, driving the growth of the regional market in North America during the forecast period.

Market Dynamics and Customer Landscape 

The primary driver of market growth is a strong focus on achieving high customer satisfaction. Increased competition among local and foreign players, spurred by evolving user demands and rising product/service prices, necessitates market players to enhance competitive strategies, emphasizing quality customer service. E-tailers are innovating with services such as order flexibility through virtual cards and diverse payment options via payment gateways. The integration of virtual cards with blockchain emerges as a pivotal trend, leveraging blockchain's security features like immutability and decentralization. Blockchain's peer-to-peer nature streamlines payment technology, potentially reducing transaction costs and expediting international transactions, benefiting consumers and businesses alike.

However, a significant challenge to market growth stems from substitute transaction systems like cryptocurrency and decentralized finance (DeFi) platforms, offering decentralized and borderless transactions, potentially diminishing the appeal of virtual cards as cryptocurrencies gain adoption, particularly among tech-savvy and privacy-conscious consumers. Digital transactions, biometrics, QR codes, and tokenization enhance security and user experience, while contactless payment solutions mitigate fraud risks. E-commerce fraud and data leakage remain concerns, necessitating cutting-edge features and continuous vigilance against cyber-attacks.

Virtual banks and fintech firms play a significant role in shaping the landscape of electronic transactions, offering solutions like BB2B Virtual Cards systems, B2C Remote Payment Virtual Cards, and B2B Virtual Cards. Import and export of goods and services rely heavily on electronic payment systems, while issues such as incorrect labels and low-quality products underscore the importance of robust payment infrastructure and secure credit/debit card information handling, safeguarding against fraud and ensuring smooth transactions for consumers and businesses alike.

Key Market Driver

Focus on high customer satisfaction is the key factor driving market growth. The changing demand of users and rising prices of products and services have strengthened the competition of local and foreign players. Market players are compelled to improve their competitive strategies to provide quality customer service and achieve high customer satisfaction. Many e-tailing companies are coming up with innovative services, like flexibility in placing orders through virtual cards and enabling different payment options using payment gateways. 

Moreover, e-commerce software also supports the growth of an organization by enhancing its online presence in the marketplace and providing a competitive advantage through higher operational efficiencies. Thus, such initiatives taken by market players to offer better customer services to end-users will fuel the growth of the global market during the forecast period.

Significant Market Trends

Integration of virtual cards with blockchain is the primary trend shaping market growth. In line with current market trends and analysis, the inherent security features of blockchain, such as immutability and decentralization, emerge as pivotal elements in fortifying virtual card security. Blockchain's peer-to-peer nature eliminates intermediaries, streamlining payment technology and potentially reducing transaction costs for all parties involved. Blockchain's global scope and fast settlement times can significantly speed up international transactions, benefiting both individual consumers and businesses operating across borders.

Additionally, the smart contract functionality of blockchain enables the creation of programmable virtual-cards with customized spending rules and triggers. This allows companies to build innovative reward programs, control employee expenses, and offer tailored solutions to specific end-user segments. Hence, the integration of virtual-cards with blockchain will drive the growth of the market during the forecast period.

Major Market Challenges

The rising threat from substitute transaction systems is a significant challenge that affects market growth. As digital payment technologies continue to grow, alternative transaction systems, like cryptocurrency and decentralized finance (DeFi) platforms, gain traction. These options often boast features like decentralized and borderless transactions, promoting a sense of financial autonomy. As the adoption of cryptocurrencies grows, particularly among tech-savvy and privacy-conscious consumers, the appeal of virtual cards may diminish over physical cards.

Moreover, the DeFi space, powered by blockchain technology, is redefining financial services by delivering decentralized alternatives to traditional banking. Decentralized payment protocols and smart contracts allow users to transact without intermediaries, challenging the conventional role of virtual cards in facilitating secure and convenient transactions. Thus, such factors may impede market growth during the forecast period.

Market Customer Landscape

Market forecasts include the adoption lifecycle of the market research and growth, 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 and trends strategies.

Global Virtual Cards Market Customer Landscape

Who are the Major Market Companies?

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 offers virtual-cards such as Adyen master virtual cards. They can be used as single use or multi use cards.
• American Express Co.: The company offers virtual-cards such as platinum cards, membership reward cards and smartearn credit cards. They also offer cards through the Google Chrome browser on your desktop or Android mobile device.
• BTRS Holdings Inc.: The company offers virtual-cards for subscribed customers and various businesses. They can also be used as credit tokens.
  

The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• 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.
• Wise Payments Ltd.

Market analysis and report of 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.

Market Analyst Overview

In the ever-evolving landscape of digital transactions, the market stands out as a beacon of innovation and security. With insights from the MasterCard Payment Index, the market is witnessing a paradigm shift towards safer and more convenient payment methods.

The rise of biometrics and tokenization ensures robust authentication and protection against cyber-attacks, making contactless payment solutions and virtual credit cards (VCCs) increasingly popular in the credit card segment and debit card segment. Institutions like the Bank of Baroda are at the forefront of this revolution, offering cutting-edge features to enhance the user experience and mitigate risks associated with e-commerce fraud.

Government initiatives, such as those led by the Ministry of Electronics and Information Technology (MeitY), are driving digital transformation and fostering a favorable environment for online purchases and electronic transactions. Meanwhile, the proliferation of smartphones/smartphone production and advancements in 5G/4G technology are expanding internet penetration and facilitating the widespread adoption of digital payment systems.

As consumers gravitate towards virtual banks and digital wallets, fintech firms and venture-capital firms are investing in B2B transactions and BB2B virtual cards systems to streamline accounts payable (AP) automation and enhance B2C remote payment virtual cards segment. Amidst concerns about data leakage and low-quality products, the market remains resilient, fueled by continuous innovation and market forecasting insights.

Segment Overview

The market research report forecasts market growth analysis by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028

• Product Outlook
  • B2B virtual-cards
  • B2C remote payment virtual-cards
  • B2C POS virtual-cards

• Service Outlook
  • Business use
  • Consumer use

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

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What are the Key Data Covered in this Virtual Cards Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market  size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies 

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