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Virtual Cards: The Future of Payments

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image source: Wise

With an expected market growth of 388% from 36B in 2023 to 175B in 2028, the Virtual card market is going to explode💣💥💥.
This will make the market size in value move up from $350B in 2023 to $1.3T in 2031 as per market reports from Juniper Research & Straits Research.

🛑 65%+ of volume is expected from #APAC (Most of this is expected from the Far East, China & India), and it’s time to understand the benefits & challenges of this segment. Value-wise, the largest market is North America.

🛑 The disparity in volume vs value can be attributed to a spurt in B2C low-value transactions like those on UPIonCC in India.

🛑 71% of total transactions by value are B2B while in volume terms it’s just ~3M transactions as B2B virtual cards.

🛑 Virtual cards provide additional benefits like single-use cards, enhanced security, convenience, and Instant deployment over physical cards.

🛑 As per Juniper Research, the Top 5 Virtual card potential usage are in the following sectors: Fleet Services, Healthcare, Government, Marketing, and education.

🛑 Top virtual card provider for B2C single /multiple use cards are Revolut, Capitalone & Privacy. Citibank also has a 100% virtual card portfolio for its clients. In the B2B segment, companies like #Wallester, #Intergiro, #Airbase, and #Pleo are a few of the bigger names.

Market wise:

#Europe:

Top BNPL players like Klarna, Stripe, and Revolut have launched their virtual cards. Current market leaders include #WEX, #Skrill, #Mastercard & #Stripe among others. The market is expected to grow at a CAGR of 5% in value terms and 20% in volume terms in the next 5 years.

USA Markets:

Companies like#Payhawk,#Wise,#Privacy, Amex, #Payoneer and hashtag#Walmart cards are few of the famous virtual cards in the USA market.

India Markets

Many Fintechs and banks are offering virtual cards in India like HDFC Netsafe card & SIB Onecard. Various banks have also gone ahead and launched Rupay-based virtual cards to cash on the UPI payments.

LATAM Markets:

Companies like Aplazo have launched virtual BNPL cards for their customers in Latin America. The B2C virtual market is still in the nascent stage there.

Future trends:

🔶 #Applepay & #Samsungpay have launched their innovative virutal cards by either linking their accounts to a bank or based on extended credit.

🔶 Virtual cards will become a great way for cross-border transactions based on A2A payments.

🔶 Personalization and wallet integration will lead to enhanced convenience for customers

🔶 Crypto integration can be another future way for Virtual cards.

Views are personal. Insights based on various open access reports.

This article was first published as a post on LinkedIn by Author

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