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Digital Credit Cards: A $9.7 Trillion Opportunity

In the Business-to-Business realm, credit cards provide access to working capital and offer rewards with enhanced controls over spending. Looking ahead, payment networks and card issuers will collaborate with Fintechs to capitalize on this growing opportunity.

Virtual cards are financial tools that exist only in digital form and are utilized for online payments. Unlike physical cards, issuers can create a disposable, one-time card, whose unchangeable account numbers are randomly generated for a specific transaction.

These digital cards can be linked to either debit or credit accounts, but account information is never shared with merchants. The underlying technology of these cards was first introduced to the consumer payments market almost two decades ago. Today, digital cards are used for corporate accounts.

Digital Card Market Development

According to the latest worldwide market study by Juniper Research, the number of credit cards issued via digital card issuance platforms will exceed 321 million globally by 2027 -- that's up from 120 million in 2023.

This growth of almost 170 percent reflects the use of new advanced digital capabilities, such as digital loyalty schemes and instant issuance, as card issuers aim to combat competition, including "buy now pay later" services.

Digital card issuance platforms allow card issuers to create cards using an API-driven approach -- enabling cards to be delivered instantly to digital wallets, with the option for a physical card, which can boost flexibility significantly.

The new study found that credit cards will account for over $9.7 trillion in spending globally by 2027. This represents a significant opportunity for card issuers to drive revenue growth by choosing the optimal credit card strategy.

Juniper analysts found that rising affluence in emerging markets will be a significant driver of credit card adoption. As such, digital card issuance platforms are critical to delivering credit offerings in these mobile phone wallet‑dominated markets.

"In emerging markets, the ability to instantly issue digital cards will be a key factor in users choosing credit cards over other payment methods. Card issuance platform vendors must ensure localization to enable cards to be quickly pushed to the wallets popular in each market," said Nick Maynard, head of research at Juniper Research.

Moreover, Juniper analysts predict that by 2027, the monetary value of rewards for users from credit card use will reach $103 billion globally, driving overall adoption and usage consumption.

Outlook for Digital Card Applications Growth

According to the Juniper assessment, card issuers must focus on app‑based loyalty to maximize the appeal of these rewards -- by partnering with digital loyalty program providers to increase their appeal. If issuers fail to do this, Juniper believes that they will lose out to better-connected vendors in a highly competitive credit card marketplace.

That said, I believe market development will be driven by innovation. Within the realm of Fintechs and digital-only banks, card provisioning can become an important performance indicator, as digitally native players capitalize on end-to-end digital sales of simplified lending or credit products.

Digital card issuers can limit spending to certain individuals, teams, vendors, or a period of time. Besides, through a centralized platform, corporate issuers can gain transaction data insights and thereby customize card offerings. These cards are also easily suspended, resumed, or deleted. This flexibility is an evolution of digital payment innovation.

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