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 in 2020.
Virtual cards are temporary, random digital card numbers that replace core payment details for specific online transactions.
The report 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 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 in 2025, less than 20% of people making online purchases will use them.
Article created by Ray Sharma who is a news editor at The Fast Mode
The opinions expressed in this article are the author’s own and do not reflect the view of Sunrise Banks.