With commercial cards continuing to press their way into accounts payable, a new report from Accenture suggests it’s the virtual card driving adoption of card-based B2B payments.
Recent research from Accenture, “A Slice of $700B+ in U.S. Commercial Card Spend For Grabs,” found virtual cards are expected to make up $169 billion of large corporate commercial card spend in the U.S. for 2018 — meaning v-cards may secure a larger share of the corporate card spending space than physical corporate cards.
Physical p-cards, different than corporate cards, still dominate, making up an estimated $234 billion of corporate card spend. Combined, corporations spend $523 billion on card their card products in 2018, Accenture calculated.
That figure is expected to rise to $763 billion by 2022 as the commercial card industry continues to make its market grabs. By 2022, Accenture predicted virtual cards will account for $355 billion of that spend — nearly half of spending volume that year.
On the whole, however, commercial card spend still accounts for less than 1 percent of total B2B payments in the U.S., Accenture noted. But the industry has significant room for growth, and researchers pointed to the virtual card as a highlight in the market.
“Virtual card spend for purchasing activities is projected to grow at 19 percent annually due to buyer commitment, improved connectivity and enhanced supplier acceptance, with further growth potential as traditional boundaries blur,” the company stated in its report.
Card issuers and service providers have to continue to focus on the unique needs in B2B payments, including integrating spend data and processes into existing accounts receivable, accounts payable and accounting platforms and workflows, Accenture said.
“Commercial cards can be valuable tools for end-user organizations and current market trends suggest that their use will continue to grow,” the firm concluded.
Earlier this week B2B payments company Bill.com announced a partnership with Comdata to integrate virtual card capability into its supplier payments platform, while another spend management firm, Coupa, also recently launched B2B payment capabilities with Barclaycard powering virtual card functionality.