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Virtual cards, in-car payments, and request to pay among the emerging technology trends within the payment market

Virtual cards, in-car payments, and request-to-pay are among emerging technology trends within the payment market.

Mobile and online payment methods saw accelerated growth during the pandemic, when consumers and businesses worldwide shifted towards more digital payment methods, thereby giving rise to innovations in the conventional payment landscape. The proliferation of virtual payment methods further led to the growth in the usage and adoption of virtual cards. Forecasts cited in our upcoming publication “Global Innovation Payment Trends 2023”, state that the virtual card market size is expected to grow by a double-digit CAGR from 2022 through 2026, reaching a value close to EUR 10 trillion by 2026, while the number of transactions made via virtual cards is forecasted to cross 50 billion transactions as of 2027. The importance of virtual cards is also rising among businesses, with affordability, control, and managing spending being the top motivating factors for surveyed financial leaders worldwide to introduce virtual cards as of October 2022. Despite this, more than 65% of surveyed finance leaders globally refused some virtual card payments in October 2022. Furthermore, among surveyed online shoppers in the U.S., the millennial age group was the most inclined to use virtual cards as of Q4 2021. Similarly, Gen Z and millennial online shoppers in Germany accounted for the highest share of virtual card usage during online shopping.

With the rise in the number of connected vehicle services worldwide, another payment innovation trend that is being explored is in-car payments. The cooperation between different stakeholders has further led to the growing demand for in-vehicle payments among businesses and consumers globally, with the forecasted number of in-car payments exceeding 4 billion by 2026, as stated in the upcoming yStats.com report, “Global Innovation Payment Trends, 2023”.  The growing appeal of in-car payments has encouraged various stakeholders in the payment industry as well as the OEMs to enter into collaborations to widen the scope of the payment method. For instance, VISA cooperated with Mercedes to offer purchase and pay service via the car’s onboard unit. Furthermore, more than 75% of potential users of in-car payments in China believed in-car payments to be an advantage for manufacturers, the highest compared to the USA and Germany as of February 2022.

The growth of instant payments globally has led to a surge in growth of the concept of Request to Pay, thereby leading to innovation within the payments and fintech market. Most surveyed industry stakeholders globally believed Request to Pay to be a better alternative to direct debits as of 2021. Since the highest demand for Request to Pay came from corporate clients as of 2021, close to 75% of industry stakeholders worldwide believe RTP will likely reduce merchant dependency on payment cards as of 2021. Despite the growing popularity of the payment method, a certain share of surveyed industry stakeholders globally indicated bank readiness to be the major challenge in the way of request-to-pay. Europe is making progress in the usage and adoption of Request to Pay, with the majority of payment professionals and corporate treasurers indicating their awareness of the pan-European request-to-pay process, and a similar share showed awareness for national Request to Pay processes as of February 2021. Despite the growing awareness of the request-to-pay process, only a small share of payment professionals and corporate treasurers claimed to use the national request-to-pay process, while nearly half of the surveyed payment professionals claimed to be very interested in doing so as of February 2021.

To sum up, as consumers and businesses are shifting towards digitalized and mobile payment methods, alternative and more modern payment concepts such as in-car payments, virtual cards, as well as request-to-pay are gathering pace globally.