Report Highlights

Understanding the Virtual Cards Market: A Buyer's Overview

Virtual cards are digitally issued payment credentials that function on existing card networks — Visa, Mastercard, or Amex — without any physical plastic. Buyers deploy them across three primary use cases: accounts payable automation (paying suppliers with single-use card numbers), corporate travel and entertainment (replacing lodge cards and agent-issued tickets), and employee expense management (issuing controlled spending credentials to staff). The primary buyers are corporate treasury teams, CFOs, travel managers, and procurement directors at mid-market to enterprise organisations, alongside financial institutions seeking to extend card programme capabilities to business clients.

From a procurement perspective, the virtual card supplier landscape is moderately concentrated. A handful of technology-led issuers — Marqeta, WEX, Conferma Pay — compete with bank-owned programmes from Citi, JPMorgan, and American Express. Tender processes typically run six to twelve weeks and involve IT, finance, and compliance stakeholders. Pricing models combine interchange rebate sharing, per-transaction fees, and increasingly, SaaS platform fees. Contract terms typically span two to three years, with rebate structures tied to spend volume thresholds that reward buyers who consolidate payment flows through a single programme.

Factors Driving Virtual Cards Procurement

Three specific procurement triggers are accelerating virtual card adoption in 2025. First, accounts payable automation mandates: organisations implementing ERP upgrades — SAP S/4HANA migrations in particular — are requiring payment rails that connect natively to their new AP workflows, and virtual cards offer a zero-integration-cost path to supplier payment when paired with platforms like Billtrust or Medius. Second, fraud reduction requirements following a 34% year-on-year rise in business payment fraud reported by the Association for Financial Professionals in 2024, making single-use card numbers a compliance-driven necessity rather than a convenience feature.

Third, travel category management reforms are pushing procurement teams to replace traditional lodge cards — which carry high reconciliation overhead and weak spend controls — with virtual card issuance embedded directly in online booking tools. Companies using Amadeus or Sabre-connected travel management platforms can now receive a unique virtual card per itinerary, eliminating the reconciliation gap that costs finance teams an estimated 12 minutes per transaction in manual processing time. These three triggers are creating simultaneous demand across finance, travel, and IT departments within the same organisation, compressing evaluation cycles.

Challenges Buyers Face in the Virtual Cards Market

The most significant challenge is supplier acceptance — virtual cards only deliver value if the payee can accept card payment. In B2B contexts, supplier enablement rates for virtual card programmes typically sit between 40% and 65% at programme launch, meaning a substantial portion of the intended AP spend cannot flow through the card. Buyers frequently underestimate the supplier onboarding effort required, which involves outreach, ERP-side configuration, and in some cases negotiating acceptance with suppliers who resist card fees. Programmes that skip a formal supplier enablement strategy consistently underperform rebate projections by 30% or more in the first year.

A second persistent challenge is total cost of ownership miscalculation. Buyers focus on headline rebate rates — often quoted at 0.5% to 1.2% of spend — while underweighting the platform fees, implementation costs, and internal resource requirements for programme management. Vendor lock-in is a genuine risk: once virtual card numbers are embedded in ERP payment runs and supplier master data, switching platforms requires re-mapping workflows and re-onboarding suppliers, creating exit costs that effectively extend commercial relationships beyond their contracted term. Buyers should also expect interchange rate changes triggered by regulatory action in the EU and UK to compress rebates on European-denominated spend.

Emerging Opportunities Worth Watching in Virtual Cards

The most commercially significant near-term development is the integration of virtual card issuance directly into embedded finance platforms. Fintechs including Stripe Treasury and Unit are enabling software companies — logistics platforms, procurement marketplaces, construction management tools — to issue virtual cards to their end users without those users interacting with a traditional bank. This embedded issuance model expands the addressable market substantially and will bring new competition to established corporate card programmes within two to three years, particularly in SME segments currently underserved by bank-issued programmes.

A second opportunity is the convergence of virtual cards with real-time payment infrastructure. In markets where instant payment rails are mature — Brazil's PIX, India's UPI, and the UK's Faster Payments — hybrid models are emerging that use virtual card credentials for approval and control logic while settling over real-time rails to reduce interchange costs. Buyers in these markets should evaluate suppliers that are building dual-rail capability, as this architecture delivers the spend control benefits of virtual cards at a lower total payment cost. Suppliers not investing in this capability by 2027 will lose enterprise mandates in these geographies.

How to Evaluate Virtual Cards Suppliers

Three criteria matter most when evaluating virtual card suppliers in this market. First, ERP and AP platform integration depth: assess whether the supplier has certified, pre-built connectors to your specific ERP instance — not generic API documentation — since custom integration is the single most common cause of delayed programme go-live. Second, supplier enablement infrastructure: ask for the vendor's existing supplier network size and their managed onboarding service capability, because a supplier with 200,000 pre-enrolled payees delivers immediate rebate yield, while one relying on self-service onboarding adds six to nine months to break-even. Third, rebate structure transparency: require full disclosure of interchange revenue retained by the issuer versus passed to the buyer, modelled at your actual spend volume by category.

The most common evaluation mistake is over-weighting technology features — virtual card API quality, mobile wallet support, real-time spend alerts — while under-scrutinising the commercial model and the supplier's financial stability. Several fintech issuers in this space operate on negative unit economics and carry concentrated banking partner risk: if their issuing bank relationship changes, card programme continuity is at risk. A capable supplier demonstrates a clear path to profitable operations, holds multiple issuing bank relationships, and provides a contractually guaranteed service level for card issuance response times — critical for travel booking workflows where a card must be issued within seconds of a booking confirmation.

Market at a Glance

Regional Demand: Where Virtual Cards Buyers Are

North America is the most mature virtual card buyer base, driven by large enterprise AP automation programmes and a well-established travel management industry. US-headquartered organisations account for the largest share of global virtual card transaction volume, supported by high supplier card acceptance rates and a regulatory environment that preserves interchange economics. Canada follows closely, with government-mandated procurement transparency pushing public sector buyers toward auditable virtual card programmes. In Europe, demand is growing rapidly — particularly in the UK, Germany, and the Netherlands — but regulatory pressure from the EU's Payment Services Directive and interchange caps compress the rebate economics that make supplier-funded programmes commercially viable.

Asia Pacific is the fastest-growing region for virtual card adoption, led by Australia, where corporate travel management companies have achieved high virtual card penetration, and by India and Southeast Asia, where embedded finance platforms are driving SME adoption outside traditional bank channels. Latin America presents an emerging opportunity concentrated in Brazil, where the PIX real-time payment infrastructure is accelerating hybrid card-and-rail models, but supplier acceptance infrastructure for B2B virtual cards remains underdeveloped outside major metropolitan centres. Middle East buyers, particularly in the UAE and Saudi Arabia, are adopting virtual cards through government-linked digital payment initiatives, with procurement concentrated among large financial institutions and government contractors.

Leading Market Participants

• Marqeta
• WEX Inc.
• Conferma Pay
• Stripe
• Billtrust
• American Express
• Citibank (Citi Commercial Cards)
• JPMorgan Chase
• Extend
• Airplus International

What Comes Next for Virtual Cards

Over the next three to five years, the virtual card market will be shaped by three structural changes. Regulatory intervention in interchange fees — already enacted in the EU and under review in the UK and Australia — will reduce or eliminate supplier-funded rebate models in affected markets, shifting the commercial justification for virtual cards from rebate yield to operational efficiency savings. Simultaneously, supplier consolidation among fintech issuers is accelerating: undercapitalised platforms will exit or be acquired, reducing the number of credible technology-led alternatives to bank-issued programmes and concentrating market power among five to six dominant platforms globally.

Buyers should act now to future-proof their virtual card programmes against these changes. Negotiate contracts that decouple platform fees from interchange revenue, ensuring programme continuity and pricing predictability even if regulatory changes compress rebates. Conduct a formal dual-rail capability assessment of your current or shortlisted supplier — those without real-time payment integration roadmaps will require replacement within three years in high-growth markets. Buyers in Europe should model rebate scenarios at zero interchange to identify whether operational efficiency gains alone justify programme costs, and if not, restructure supplier contracts to move cost recovery from rebates to direct AP processing fee reduction.