According to previous data garnered by Precedent Research, the global B2B payment transaction market was expected to reach an impressive $70 billion by 2030.
Incredibly, this value was just $868 million in 2020, highlighting the growth and diversification of the digital payments space and its exponential rate of expansion.
This market includes the rising use of virtual cards for B2B payments, but what are the benefits of this particular technology?
What is a Virtual Card and its Core Benefits?
MasterCard was one of the first service providers to offer a virtual card to its customers, with this digital payment method utilising machine learning and straight-through processing for the instant payment of supplier invoices.
This has been widely welcomed and embraced by the B2B marketplace, who can use digital cards to drive more efficient payments. But what are the additional benefits of virtual cards for B2B entities?
#1. Safety
According to one report from J.P. Morgan, some 62% of B2B firms found themselves the target of payment fraud back in 2014.
Credit and debit cards were among the most targeted methods for fraudsters, particularly with card sharing a common practice that increases the risk of theft, loss and data breaches.
However, the use of virtual payment cards in the B2B realm can help to negate such risks, while allowing for the safe transfer of cash from a secure digital wallet rather than your main company bank account. This represents a huge innovation, and one that has the potential to dramatically change the B2B payments landscape.
#2. Improve and Enhance Cash Flows
As we’ve already touched on, virtual cards are able to underpin incredibly fast and efficient payments.
Not only is this beneficial both when making and accepting payments, but it also helps to provide more accurate, real-time data on the true state of your business’s cash flow.
Data garnered from Xero shows that up to 28% of the UKs’ small business owners and independent B2B operators struggle with cash flow as a key challenge, but having access to quicker, secure and real-time payments can help optimise the amount of money in your venture at any given time.
#3. Real-Time Information on Budgets
On a similar note, the ability to process and accept virtual payments in real-time ensures that live data is delivered for the purpose of budgeting.
For example, contemporary fintech firms and open banking platforms allow you to manage spending limits in real-time, while it’s also theoretically possible to segregate your budget between alternative virtual cards to manage your finances even more efficiently.
This is definitely superior to managing multiple accounts, while it can also be argued that virtual cards afford you far greater access to your company’s funds.
Certainly, such payment methods can be used seamlessly when your team or employees need to make business purchases, particularly those that are required outside of more traditional supplier invoice payments.
