Virtual Cards Market Size, Share & Trend Analysis Report By Card Type (Credit Card,Debit Card), By Product Type (B2B Virtual Cards), By Application (Business Use, Consumer Use), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global virtual cards market was valued at USD 13.31 billion in 2022 and is anticipated to expand at a compound annual growth rate (CAGR) of 20.9% from 2023 to 2030. The growing number of digital transactions across the globe is projected to drive the demand for various types of virtual cards, thereby contributing to market growth. For instance, in May 2021, according to a report published by MasterCard Payment Index, 93% of the surveyed consumers preferred emerging payment trends such as biometrics, digital currencies, and QR code in addition to contactless payment. Hence, payment providers are constantly deploying multiple pay and shop solutions for consumers.

The demand for virtual cards is anticipated to be driven by the growing need for an extra layer of protection, such as tokenization in the digital payment gateway system. In addition, tokenization technology within virtual cards offers multiple benefits, such as a better user experience, reduced costs on protection, and others for both businesses and customers. Further, by integrating tokenization within these cards, merchants can transfer data between networks while protecting their customer’s vital information. Such factors are anticipated to create a positive outlook for the market during the forecast period.

The growing adoption of smartphones globally is emerging as one of the major factors propelling the adoption of virtual cards. Innovative technological advancements such as 5G are being integrated progressively within smartphones that offer users better customer satisfaction, thereby accentuating the market growth. In addition, growing internet penetration across the globe is leading to a surge in digital payments, thereby creating demand for virtual cards. In June 2022, according to the latest report published by World Bank, the global internet users have been estimated to be around 60% of the world population.

Governments across the world are constantly encouraging companies that provide secure payment solutions to improve their offerings. For instance, the Ministry of Electronics and Information Technology (MeitY) issued guidelines to States/UTs and Central Ministries/Departments to enhance payment acceptance infrastructure in India. These guidelines are creating opportunities for the citizens to pay through a variety of channels such as mobile banking, internet banking, and mobile applications, among others. Such government initiatives are anticipated to create a positive outlook for the market in the near future.

The rising advantages of these cards, such as setting spending limits, canceling and pausing a card at any time, among others, are expected to develop a new set of opportunities for market growth. In addition, virtual cards, unlike physical cards, cannot be lost or stolen. However, the growing concerns over the limited availability of these cards are expected to hamper the growth of the market during the forecast period. Further, the ever-increasing risk of cyber-attacks and frauds associated with digital payments are also likely to hinder the development of the market.

COVID-19 Impact Analysis

The COVID-19 pandemic had a significant impact on driving the growth of the market. Following the outbreak, there has been a rising demand for contactless payment solutions, which is creating new opportunities for the virtual cards market. Since a virtual card is not a physical object, the threat of it potentially transmitting infections is prevented. In addition, various merchants are also adopting digital payments as part of their efforts to ensure a safe and secure way of payment for the customers.

Card Type Insights

The credit card segment dominated the market in 2022 and accounted for a share of more than 58.0%. The segment growth is attributed to the growing concerns about preventing corporate fraud. In addition, businesses have shifted to controlled, centralized, and seamless payment options such as Virtual Credit Cards (VCCs) to mitigate these risks. Moreover, several banks have collaborated with fintech companies to deliver virtual credit cards. For instance, in November 2021, the Bank of Baroda announced its collaboration with OneCard, a fintech-based startup, to provide a virtual credit card that will be delivered in three minutes. This credit card was planned to be offered by BOB Financial Services Limited (BFSL) and controlled by OneCard on VISA's Signature platform.

The debit card segment is anticipated to witness significant growth during the forecast period. The segment is expected to be driven by growing net banking users across the globe, which is expected to drive the demand for virtual debit cards. For instance, in May 2022, Google announced the development of two new payment initiatives, such as digital wallets and virtual cards. This launch is aimed to offer enhanced security and greater convenience for its users across the globe.

Product Type Insights

The B2B virtual cards segment dominated the market in 2022 and accounted for a share of more than 70.0% of the global revenue. The increased export and import of goods and services around the world have ramped up the demand for B2B transactions among businesses, which are expected to drive the demand for B2B virtual cards. Companies are integrating virtual cards into their B2B payment processes to improve cash flow, increase security, and facilitate Accounts Payable (AP) automation more smoothly rather than relying on antiquated methods like paper checks. In addition, enabling virtual card acceptance via accounts receivable automation can also boost efficiency and assist businesses in capturing growth opportunities.

The B2C remote payment virtual cards segment is anticipated to register the fastest growth during the forecast period. Banks provide these cards to their retail clients, which helps retailers in making effective online payments. In addition, these cards are only used for one-time payments and have a specific validity period. The virtual card number, expiration date, and security code (CVV) can be generated by the customer using the bank's website or mobile application.

Application Insights

The business use segment dominated the market in 2022 and accounted for a share of over 69.0% of the global revenue. Businesses use virtual cards to make payments online to vendors and suppliers. These cards provide increased security because unlike traditional credit and debit cards, they cannot be misplaced or stolen. Furthermore, these cards can only be used once or for a limited number of transactions, thereby reducing the possibility of fraud. In the event of any potential fraud, the issuing authority can immediately block the virtual card. Virtual cards can also be used by businesses to pay employee expenses and book corporate travel.

The consumer use segment is anticipated to grow at a significant rate during the forecast period. The increasing consumer inclination towards digital payments due to the pandemic is among the influential factors that are expected to drive the growth of the segment. Consumers across the globe prefer virtual card payments over cash payments owing to various benefits it offers, such as convenience and accessibility. For instance, according to a global Findex report by World Bank in 2021, 89% of adults in China had a bank account, of which 82% were engaged in digital payments.

Regional Insights

Europe dominated the market in 2022 and contributed towards a share of over 38.0%. The growing preference for cashless payments across European countries such as the U.K., Germany, and others is expected to drive the growth of the regional market. Furthermore, several market players are launching innovative products in the European market to attract customers toward the adoption of virtual cards. For instance, on April 2021, Stripe launched Stripe Issuing in European nations. Stripe Issuing allows to create, organize, and disperse virtual and physical payment cards, allowing businesses to have more authority over how their money is spent.

Asia Pacific is anticipated to grow at the highest CAGR during the forecast period. The regional market growth is attributed to the increasing smartphone penetration in countries such as India, China, and Japan. In addition, the growing smartphone usage in these economies has led to the increasing inclination toward digital payments among consumers, thereby creating more demand for virtual card payment solutions. For instance, in October 2021, According to a report published by Asian Banker Worldwide, Japan has a 70.6% penetration of digital wallets, which is expected to increase up to 98.6% by 2025.

Key Companies & Market Share Insights

The market is characterized by the presence of various prominent market players. These firms concentrate on collaborating with fintech companies to expand their market presence. For instance, in September 2021, a fintech firm that specializes in providing virtual cards, Extend Enterprises, Inc., partnered with American Express Company to encourage the adoption of virtual cards in the U.S. According to the agreement, American Express Business Card holders in the U.S. can use Extend Enterprises, Inc.'s app to initiate virtual cards, recognized as tokens.

The market players are adopting several business strategies in collaboration with technology-based firms to enhance banking services. For instance, in May 2022, Google announced that it is collaborating with MasterCard, American Express, and Visa to make virtual cards available for Chrome and Android platforms. This collaboration is aimed at creating virtual cards to enable digital money transactions.

Some of the prominent players in the global virtual cards market include:

• American Express Company

• BTRS Holdings, Inc.

• Wise Payments Limited

• JPMorgan Chase & Co.

• Marqeta, Inc.

• MasterCard

• Skrill USA, Inc.

• Stripe, Inc.

• WEX, Inc.

• Adyen

Virtual Cards Market Report Scope

Global Virtual Cards Market Segmentation

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the virtual cards market based on card type, product type, application, and region.

• Card Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Credit Card

  • Debit Card

• Product Type Outlook (Revenue, USD Million, 2017 - 2030)

  • B2B Virtual Cards

  • B2C Remote Payment Virtual Cards

  • C2B POS Virtual Cards

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Business Use

  • Consumer Use

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • Middle East & Africa