Virtual card transactions volume to hit 175 billion by 2028: Juniper Research

The total volume of virtual card transactions is predicted to hit 175 billion by 2028, growing from 36 billion in 2023, according to a new Juniper Research report.

Growing by a 388 percent, the market will be accelerated by the adoption of API (application programming interface) virtual card issuing platforms.

A virtual card uses a randomly generated and generally temporary card number linked to a payment account, which is used to process payments in lieu of genuine payment details. Virtual cards provide a secure and fast way to distribute funds, while effectively managing spending limits.

The report identified easy-to-use API platforms, which allow businesses to establish a virtual card programme that they can deploy easily and scale alongside their needs, as a key development driving virtual card growth.

Daniel Bedford, research author at Juniper Research discussed the power of banking-as-a-service.  

“By offering Banking-as-a-Service APIs featuring virtual cards, vendors such as Stripe empower businesses to launch their own virtual card programs,” he said.

“We recommend that virtual card vendors focus on API-enabled models, to maximise the flexibility virtual cards provide.”

Another key success factor identified by the Juniper authors was the readiness of a virtual card platform to easily integrate within an organisation’s own software and established infrastructure.

For example, procurement-focused virtual cards need to integrate with accounts payable software in order to automate renewals, log payments and generate digital receipts.

The authors noted that virtual card vendors must therefore integrate with a wide range of third-party software systems across key verticals of interest, in order to maximise their success.

Last year, Juniper Research noted the growing popularity of virtual cards and its relationship with buy now pay later vendors.

The authors noted that as digital wallet services such as Paypal also offer BNPL solutions, and some BNPL providers such as Klarna are offering virtual cards that act like a wallet, the two solutions are coming closer and closer together.