The global market size for virtual cards reached USD 278.2 billion in 2021, with expectations to soar to USD 1,291.05 billion by 2030, exhibiting a robust CAGR of 21.15% from 2025 to 2029. A virtual card, or digital card, is an electronic payment system designed for secure online transactions and electronic payments. Distinguished by advanced features, virtual cards offer users a secure, practical, and controlled spending experience compared to physical cards. The surge in electronic transactions and the widespread adoption of smartphones worldwide are key drivers for the anticipated significant expansion of the virtual cards market.
Virtual cards are cost-effective compared to physical cards, as virtual banks typically impose fewer fees. Operating online reduces the virtual bank's operational expenses, translating into lower costs for issued virtual cards. Enhanced security is another advantage, with users having the ability to instantly cancel their accounts in the event of data leakage, making virtual cards a more secure alternative.
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One-time use of bank numbers for each transaction enhances data security, unlike traditional methods where the same bank numbers are repeatedly shared. This heightened security prevents account theft and e-commerce fraud, contributing to the expansion of the virtual cards market.
The growing trend of online transactions globally, driven by increased smartphone usage for payments and shopping, further propels the virtual cards market. The unique 16-digit card number on a smartphone ensures security, as there is no physical card to lose or steal. The convenience and transparency of online transactions continue to attract users, fostering rapid growth in the virtual cards market.
However, potential restraints include the risk of smartphone theft leading to fraudulent use of virtual cards and consumer preference for physical cards during in-person transactions. Despite these challenges, market opportunities arise from the rising demand for touchless payments, advancements in payment technology, and increased investments in virtual card providers. Venture capital firms globally are actively funding reloadable and virtual payment card providers, indicating a promising outlook for market growth.
In the regional analysis, North America emerges as the most lucrative market, driven by consumer preferences for virtual cards at the point of sale and the diminishing use of cash, especially among millennials. The region's advanced digital payment systems, presence of major companies, and deployment of cutting-edge technologies contribute to substantial market expansion. In contrast, Asia-Pacific is poised to grow significantly due to increased smartphone production, booming internet penetration, and government initiatives for digital transformation.
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Market Insights and Leading Companies
The market is marked by the presence of several prominent players actively engaging in partnerships with fintech companies to expand their market reach. A notable example is Extend Enterprises, Inc., a fintech specializing in virtual cards, which collaborated with American Express Company in September 2021. This strategic partnership aims to promote the adoption of virtual cards in the U.S. As per the agreement, American Express Business Card holders in the U.S. can leverage Extend Enterprises, Inc.'s app to initiate virtual cards, referred to as tokens.
Market players are employing diverse business strategies in collaboration with technology-based firms to enhance banking services. An illustration of this is Google's announcement in May 2022 about its collaboration with major players such as MasterCard, American Express, and Visa to make virtual cards available for Chrome and Android platforms. This collaboration is geared towards facilitating digital money transactions through the creation of virtual cards.
Prominent Players in the Global Virtual Cards Market:
- American Express Company
- BTRS Holdings, Inc.
- Wise Payments Limited
- JPMorgan Chase & Co.
- Marqeta, Inc.
- MasterCard
- Skrill USA, Inc.
- Stripe, Inc.
- WEX, Inc.
- Adyen
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Segmentation into B2B Virtual Cards, B2C Remote Payment Virtual Cards, and B2C POS Virtual Cards reveals that B2B Virtual Cards are expected to dominate the market, driven by increased demand among B2B purchasers for improved cash flow, security, and streamlined accounts payable automation.
The Business Use segment is projected to hold the largest market share based on application, fueled by startups promoting corporate credit cards and virtual credit/debit cards. These solutions help businesses lower payment processing costs, improve cash management, and reduce vulnerability to check fraud, contributing to the growth of this market segment.
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