Virtual Card Use, Payment Choice, On the Rise

The global value of virtual card transactions is expected to jump to $6.8 trillion over the next four years — compared to $1.9 trillion last year — and a large portion of that growth will come from business-to-business (B2B) transactions.

There are a number of aspects of virtual cards that lend themselves to a business’s needs, such as buying products for resale or corporate travel. In addition, companies that employ a lot of gig workers can benefit by extending earned wage benefits to contract employees.

Virtual cards can also make it simpler to track business expenses or impose limits to make sure spending is appropriate, such as B2B merchants who depend on buyers to make large purchases of stock for resale.

And when it comes to business travel, corporate credit cards are still the most popular way of paying for trips, but 37% of the people surveyed in a poll of travel buyers say they use virtual cards for this purpose, and more than half say they plan to up their company’s usage of virtual cards in the next five years.

Meanwhile, payment choice is increasing across industries. Research finds that of the approximately 158 million U.S. consumers who received a collective 11 billion disbursements in the last year, nearly three-quarters said they had a choice of at least two payment options.

That was a big jump from 2020, when 57% of consumers said they received at least two payment options for disbursements.

Payment choice in income and earnings disbursements rose to 75% in 2021 from 59% in 2020, while the share of people reporting at least two options for insurance or borrowing disbursements climbed to 74% in 2021 from 51% in 2020.

Most recipients of government disbursements had some choice, but that number didn’t show much growth, with 70% of consumers reporting two or more payment options in 2021, versus 68% the year before.

Among the people who received an instant payment, 78% said it was one of at least two options offered, which shows a strong preference for instant payments when available.

Some of the most common areas for which payees were allowed to choose instant payments included participating in focus groups or medical research groups and legal settlements.

For more on this topic, download your copy of the Disbursements Tracker, a PYMNTS and Ingo Money collaboration.