Virtual Cards Market Size, Share & Trends Analysis Report By Product Type, By Application, By Region, And Segment Forecasts, 2021 To 2028

The global virtual cards market is expected to witness significant growth over the forecast period owing to the increasing number of electronic transactions. Moreover, the growing adoption of smartphones across the globe is also expected to create growth opportunities for the market. A virtual card, also called digital card, is a digital payment system that functions as a token to place online orders and make electronic payments. It improves the payment experience by enabling a simpler, smarter, and safer way to make purchases online. Since virtual cards are generally stored on a smartphone or smartwatch, the payment data is transmitted through the Internet. The demand for virtual cards has further accelerated as a result of the lockdowns imposed during the COVID-19 pandemic. The global closure of shops, businesses, and hotels resulted in a shift in the preference of consumers toward online transactions, thereby presenting growth opportunities for the market.

Global Virtual Cards Market Segmentation

A virtual card has a unique 16-digit card number that is digitally generated and tied to a bank account. With virtual cards, businesses can effectively manage the card numbers and balances on any mobile or computer device, irrespective of whether they are making or receiving the payment. Moreover, virtual cards play a vital role in improving B2B payments. Their increased adaptability and convenience allow business resources to be accessible from anywhere and at any time. They also offer a reliable and scalable solution for dealer payments, primarily for international transactions.

One of the biggest benefits offered by virtual cards is their ability to provide added security. As opposed to physical cards, virtual cards cannot be lost or stolen. The card information is stored and protected online, thus limiting the exposure of personal details. Moreover, users can easily edit or delete their payment information after a transaction. As a result, virtual cards have become an ideal payment tool among individuals and businesses for making secure transactions while also achieving better spend visibility and transparency.

The virtual cards market offers significant growth opportunities for investors. As a result, numerous venture capital firms across the globe are investing in disposable and virtual payment card providers. For instance, in May 2021, Privacy, now rebranded as Lithic, announced that it had raised USD 43 million in Series B funding led by Bessemer Venture Partners to improve its card-issuing platform performance. Investors such as Tusk Venture Partners, Index Ventures, Teamworthy Ventures, Walkabout Ventures, and Rainfall Ventures also participated in the financing.

Key players in the virtual cards market include American Express Company; BTRS Holdings, Inc.; Fraedom Holdings Limited; JPMorgan Chase & Co.; Marqeta, Inc.; Mastercard; and Skrill USA, Inc. These companies focus on partnering with FinTech businesses to strengthen their footprint in the market. For instance, in September 2021, American Express Company partnered with Extend Enterprises, Inc., a fintech company specialized in virtual cards, to expand the use of virtual cards in the U.S. As per the partnership, U.S. businesses with an American Express Business Card can use Extend Enterprises, Inc.’s app to create virtual cards, also known as tokens.