While MedTech, digitization, and remote working have sucked up the entirety of the technological limelight during the highs and lows of the COVID-19 pandemic, a sleeping giant has also been growing in the background.
That sleeping giant: contactless technologies.
We have used forms of the technology in a plethora of ways, to ordering food and groceries, seamless check-ins, and many more; however, the biggest asset of this technology is its skyrocketing reliance on virtual card.
According to a new study by Juniper Research, the global value of virtual card transactions will reach $6.8 trillion in 2026, ranging from $1.9 trillion in 2021, with experts forecasting that transactions from these virtual cards alone will grow by a whopping 370 percent in the next five years.
Among the main reasons of its standout climb to success due to security; since they are classified as secure digital cards with randomly generated details, they will show strong growth as they are increasingly used for B2B payments.
The research identified that businesses would value the simplicity of virtual cards, compared to the expensive and slow methods still being used, such as cheque payments which remain popular in the U.S.
The new research, Virtual Cards: B2B and B2C Applications, Competitive Analysis & Market Forecasts 2021-2026, predicts that outside of the dynamic B2B market, the added security from virtual cards will also appeal to the consumer market.
To capitalize on virtual card opportunities, vendors must identify which segment they are targeting and emphasize the most important value-added features, such as ERP integrations or consumer brand partnerships.
B2B Payments Dominating Transaction Value
The report found that B2B payments will continue to account for the majority of virtual cards transaction value; amounting to 71 percent of the total value in 2026. While B2B sales occur less frequently, yielding under one percent of transaction volume in 2026, average transaction values are much higher in the B2B segment.
“This means that vendors must ensure that security features and automation are emphasized to facilitate large payments as efficiently as possible,” the report read.
Indian Subcontinent Seeing Strongest Growth
The research forecasts that the Indian Subcontinent will be the fastest-growing region over the next five years, with transaction volumes increasing more than tenfold. India, in particular will present enormous potential for vendors.
This growth will be underpinned by the presence of major vendors in the region, such as SBI and Oxigen Wallet. The high adoption of virtual cards in the buoyant mobile wallets sector will drive eCommerce usage.
Additionally, the report identified the requirement by the RBI from October 2020 for users to have control over card use to prevent fraud as a major growth driver.
As time goes on, and reliance on all things digital become ever more present, contactless technologies will look to stay and skyrocket, especially due to its levels of security, accessibility, and seamlessness.