Commercial Virtual Card Payments to Exceed $1 Trillion by 2022, But Will Struggle to Broaden Appeal
The annual value of virtual cards (temporary cards that are only available for a single transaction or limited time) is projected to grow 90% over the next four years and exceed $1 trillion by 2022 according to a new report from Juniper Research.
While this is a huge growth from an estimated $568 million in 2019, virtual card technology is still expected to struggle to gain marketshare from other established payment mentors. Despite attractive benefits to virtual card transactions -- including anti-fraud measures -- the option will continue to make up only a small portion of B2B money transfer transactions.
The report offers insights on how this technology will impact the future of commerce and how virtual cards can maximize their potential.
Virtual Cards Accelerate in Financial Services
The new report, Virtual Cards: Global Consumer & Commercial Adoption, Opportunities & Forecasts 2019-2023, notes that financial services will be the fastest growing adopter of virtual cards, with transaction volumes growing at an average of 18.3% between 2019 and 2022.
Commercial cards are well-established in fleet businesses, but virtual card growth will be slow here due to the need for payments at a POS when purchasing fuel.
Healthcare will be the highest value sector, representing $277 billion in transactions by 2022, but adoption will be low. The research anticipates that only 4% of healthcare institutions globally will adopt virtual cards, due to high processing charges.
Consumer Virtual Cards are a Privacy Play
Juniper expects consumer virtual cards to generate over $14 billion in revenues for card providers by 2022, primarily from remote purchases. Companies offering these services are typically positioned as protecting consumers’ privacy, offering other digital ID-based services alongside virtual cards.
“Virtual cards offer a number of financial management possibilities, for both business and consumer use,” remarked research author James Moar. “However, the limits of the technology currently mean that virtual cards need to be part of a wider payment or security product.”
Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.
(For more information visit http://www.juniperresearch.com).