B2B Expenditure Expected to Make up 80% of Virtual Card Market by 2025

The increasing demand for touchless payment options that was accelerated by the pandemic is seeping into the corporate world as well, where a host of new contactless everyday spending options are hitting the market.

Virtual cards in particular are emerging as a popular and easily deployable solution. In fact, B2B expenditure is expected to make up 80% of the virtual card market by 2025, as reported in the B2B Workforce Spend Playbook, a PYMNTS and Conferma Pay collaboration. That’s significant as the global virtual card market is expected to triple by 2025 and reach an estimated spend in excess of $5 trillion.

A heightened demand for touchless payments is only one of many ways in which the pandemic has shifted the financial practices of U.S. businesses and their staff members. Record unemployment levels and precipitous drops in consumer spending triggered widespread cash flow shortages, forcing many businesses to tighten their belts. Cash flow constraints and more frequent instances of working from home led spend controls to become a big part of this push, with many companies adopting or making their own solutions.

A Spike in Digital Everyday Spend Solutions 

For example, Visa and Conferma Pay are partnering to enable Visa card-issuing banks to upload virtual cards into the Visa Commercial Pay app, powered by Conferma Pay. This will allow companies to issue virtual cards to employees and contractors featuring varying degrees of spend controls to remove the uncertainty associated with worker expenditure.

Similarly, Maria Parpou, chief product officer at Barclaycard, told PYMNTS that since the beginning of the pandemic, there’s been a spike in digital everyday spend solutions, including virtual cards, spend controls and analytical tools that can help companies provide digital options to employees for managing their day-to-day expenses and reducing the frustration, paperwork and manual effort required to submit expense reports to finance. Such systems may have gained popularity during the pandemic, but these innovations are poised to outlast the public health crisis that made them necessary, Parpou said.

The economic and public health pressures have thus created a professional environment ripe for digital everyday spend innovation. Virtual solutions that can trace and track spend and also provide remote access to funds for critical supplies are perfectly poised for adoption in the new, digital-first home office ecosystem.

Access to Insights and Fast Payments 

Countless digital spend management solutions have entered the market to meet this growing demand. Some have taken the form of subscription offerings, which give businesses greater transactional visibility by allowing them to view their staff members’ past, current and planned expenditures in real time. The use of virtual cards that enable companies to set spending limits is also expanding.

Digital spend management tools such as these can help businesses keep track of their limited financial resources as well as solve some of the logistical difficulties stemming from legacy payment methods, especially as more individuals work remotely. These workers can send forms, files and payments via emails, digital messages and virtual cards much faster than what is possible with paper-based methods.

The unprecedented circumstances of the COVID-19 pandemic are presenting not only challenges but also opportunities for businesses. Those working to manage their spending, minimize costs and improve their operational efficiencies amid widespread cash flow shortages could find that digital tools give them the insights and fast payments they need.