Rising integration of virtual cards to existing digital wallet services to generate wider consumer adoption of secure contactless payments in rapidly developing economies.
According to Juniper Research‘s latest report, the number of virtual card transactions will exceed 121 billion globally by 2027; increasing 340 per cent from 2022’s 28 billion.
Likewise, the number of these virtual transactions being made through mobile payment methods is forecast to grow from 5 billion in 2022 to 53 billion in 2027.
The data predicts that the rising integration of virtual cards to existing digital wallet services, like Apple Pay and Google Pay for example, will drive this growth by tapping into the existing user bases of digital wallets.
As the findings suggest, virtual cards have become increasingly popular due to the security that’s associated with their use. Virtual cards make transactions through a randomly generated card number that’s linked to an ordinary bank account.
The inclusion of virtual cards will act as a key market driver in the adoption of contactless payments in rapidly developing economies, such as India. This allows them to meet market demand for convenient payment options during checkout amongst unbanked populations.
Virtual cards face tough competition from other payment methods, such as traditional contactless cards and QR codes. However, the report anticipates that the secure nature of virtual cards will drive demand in an increasingly security-conscious market.
The US represents the largest market for business virtual card transactions
Additionally, the data forecasts that the US will account for $71billion in B2B virtual card revenue by 2027; representing 72 per cent of global revenue.
Juniper’s report predicts that the growing use of virtual cards in the healthcare sector will be key to driving this growth, with virtual cards increasingly used to pay for supplies and equipment due to the speed of transactions and inherent security of this payment method.
In response, it encourages virtual card vendors to offer integration with accounts-payable software to streamline the payment process undertaken by major US healthcare providers.