A new study from Juniper Research, experts in fintech and payments, has found that the total volume of virtual card transactions will reach 175 billion by 2028, rising from 36 billion in 2023.
Growing by a significant 388%, the market will be accelerated by the adoption of API (Application Programming Interface) virtual card issuing platforms.
With the stoppage of international transactions on Naira-denominated cards by Nigerian banks, many Nigerians have switched to virtual card platforms to be able to carry out international transactions, thus adding to the global virtual card market.
This has pushed the growth of organisations like Payday, Chipper Cash, among others, that are offering virtual card services.
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.
API platforms to drive growth
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.
Commenting on the report, the research author Daniel Bedford said:
- “By offering Banking-as-a-Service APIs featuring virtual cards, vendors such as Stripe empower businesses to launch their own virtual card programmes. We recommend that virtual card vendors focus on API-enabled models, to maximise the flexibility virtual cards provide.”
API integration key for success
Another key success factor identified by the report 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.
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,” Juniper Research stated in the report.