Virtual cards are no longer a fringe payment option. According to research, over 40% of U.S. consumers now use virtual cards at checkout—a jump reflecting growing concerns about data security and payment fraud.
These cards, often generated through a banking app or digital wallet, offer a one-time-use or limited-use card number that masks the user’s actual credit or debit card. They’re especially popular for online purchases, where card-not-present fraud remains a major issue.
A report from Statista backs this up: digital wallet adoption, including tools that offer virtual card functionality like Apple Pay, Google Pay, and PayPal, continues to grow steadily.
Why Virtual Cards Are Gaining Ground
A few clear reasons explain the surge:
- Fraud protection: Virtual cards limit exposure. If a virtual number is stolen, it can't be reused or linked back to the user's main card.
- Data breaches: With cyberattacks targeting merchant systems, consumers are leaning toward safer options. Virtual cards don’t store data the same way a physical card does.
- Bank offerings: Major banks and fintech apps now integrate virtual card tools directly. Capital One, Citi, and Amex have all made them widely available.
The result? Consumers are choosing privacy and control at checkout, and they’re doing it at scale.
What This Means for Merchants
While virtual cards can reduce fraud, they also come with processing challenges. Since these cards often generate unique numbers for every transaction or merchant, it becomes harder for merchants to:
- Match transactions with recurring billing systems
- Link purchases to existing customer profiles
- Predict future buying patterns based on card number reuse
Some merchant systems may also misidentify virtual cards as fraud attempts, especially if the billing information doesn’t match exactly. This can lead to false declines, hurting conversion rates.
Still, the fraud prevention benefit is huge. The Federal Trade Commission (FTC) reported that credit card fraud remains the most common type of identity theft, making up nearly 40% of reported identity theft complaints in 2023. Virtual cards offer a practical layer of defense.
The Bottom Line
Virtual cards are going mainstream. Their growth reflects a broader shift toward secure, digital-first payment behavior. For merchants, it’s a sign to modernize checkout systems and revisit how they handle payment data. For consumers, it’s a win in the fight against fraud.
Stay One Step Ahead of Virtual Card Confusion with Chargeblast
Virtual cards are great for consumers, but they can throw a wrench into your fraud systems if you're not ready. Chargeblast helps merchants keep up with how people actually pay now. We spot the difference between a real customer using a one-time card and a real fraudster trying to slip through. That means fewer false declines, fewer disputes, and a smoother checkout for everyone.
If virtual cards are becoming the new normal, we make sure your business doesn’t miss a beat.
