For decades, business payments have lagged behind consumer payments in both speed and convenience. While everyday shoppers shifted from checks to contactless years ago, businesses are still burdened with paper invoices, rigid payment terms, and manual processes that slow everything down.
This friction is inconvenient and costly for merchants and buyers. For suppliers, it means strained cash flow and added risk, with 50% of invoices in North America now being paid past due. For buyers it can mean frustrating financing bottlenecks and missed opportunities.
Virtual cards offer an ideal solution. Once seen as a niche payments tool, they are now emerging as one of the most important innovations in the B2B space, enabling instant payments, tighter spend control, and greater fraud protection.
In this article, we’re looking at how virtual cards can help solve payment inefficiencies, and why they’re suddenly gaining in popularity.
The problems with traditional B2B payments are becoming harder for companies to ignore. Businesses spend hours of admin time reconciling records, chasing overdue invoices, and managing disputes. Offset this with a current market of softer economic growth and higher operating costs, and the situation becomes both frustrating and risky for suppliers.
According to a global study by Allianz Trade, the average lag between sales and payments has risen to 59 days, with one in five companies having to wait over 90 days for an invoice to be paid. Due to late payments, SMBs estimate their average losses at $39,406 each year. At the same time, fraud attempts are rising. Paper checks remain a leading target, with 63% of companies reporting payment fraud in the past year.
Even when fraud isn’t an issue, inefficiency often is. A PYMTS intelligence study showed that over one-third of mid-sized firms still don’t use any payments automation and are anchored in paperwork and AP tasks. Finance teams are left drowning in manual work, and suppliers need to wait weeks, or months, to see sales funds hit their accounts.
Buyers face the opposite problem, with rigid approvals and outdated credit applications slowing down purchasing decisions. The net result is an outdated payments ecosystem that holds both sides of the transaction back from getting what they really need.
At first glance, a virtual card might sound like nothing more than a digital version of a plastic credit or debit card, but the underlying design makes them fundamentally different.
Instead of a single card that’s used across multiple transactions, many virtual cards can generate unique numbers for individual purchases, departments, or categories of spend. That structure adds layers of control that traditional cards can’t offer.
Other types of virtual cards (such as the Credit Key Card) offer a fixed card number for approved borrowers so they can easily save it to their digital wallets and vendor profiles for fast checkout.
Speed is one of the biggest advantages for this payment solution. Virtual cards allow suppliers to get paid immediately,
while buyers can make purchases instantly without waiting for credit approvals to crawl through the system.
Improved security is another factor. For finance teams, virtual cards enable more visibility and control over each sale.
With the Credit Key Card, for example, payment risk is eliminated for suppliers, meaning there’s no need to stress about fraudulent purchases.
For consumer payments, these benefits might feel incremental. But in B2B where transaction sizes are larger and vendor relationships are more complex, they can be a huge advantage.
Virtual cards have struggled to gain traction in B2B despite their obvious benefits. Much of that comes down to outdated perceptions.
Many executives assumed that payment innovations belonged in the consumer world, not in business-to-business transactions. They believed buyers weren’t ready to adopt new tools or that suppliers wouldn’t accept them. Others worried about implementation costs or doubted that the return on investment would justify the effort.
These assumptions created a self-reinforcing cycle. Because companies didn’t prioritize virtual cards, adoption remained low. And because adoption remained low, leaders interpreted that as proof that demand wasn’t there.
Industry data paints a different picture. A PYMNTS study found that companies offering virtual cards cut Days Sales Outstanding (DSO) times by 40% and significantly reduced fraud compared to traditional payment methods.
Digital cards are a logical step forward for B2B transactions, and the next few years will mark a tipping point for card adoption. Demographic change is one of the biggest drivers.
Gen Z will represent 30% of the workforce by 2030. As digital natives, they expect the same payment options in their professional lives that they already use personally. That expectation alone will put pressure on wholesalers and distributors to modernize their payments and financing offerings.
Technology readiness is also a key factor. Major payment networks and Fintech platforms now offer streamlined virtual card issuance and acceptance, making it easier for buyers to use them, and for companies to implement them without reinventing their back-end systems. Most importantly, finance leaders themselves are starting to see embedded payments as strategic levers to improve cash flow, reduce risk, and drive customer loyalty.
Market forecasts reflect this momentum, with analysts projecting that the virtual card market in B2B will reach $14.6 trillion by 2029. This represents 83% of the total virtual cards market globally. In other words, what was once an overlooked solution is on track to becoming an essential part of the business payments ecosystem.
SMBs often run on thin margins, where every decision is influenced by cash flow constraints. Purchasing speed can be the difference between securing goods on the spot or losing out to a better-prepared competitor.
For business buyers and borrowers, virtual cards address the most pressing challenges in procurement, being cash flow, approvals, and efficiency.
Suppliers experience an indirect but immediate impact from virtual card adoption. Accounts receivable is one of the biggest pain points in B2B eCommerce, with bad debts standing at 8% of invoices on average.
Virtual cards, by guaranteeing payment at the point of sale, shrink the cost of writing off bad debts and ensure more predictable revenue with:
One of the biggest misconceptions around virtual cards is that they require massive system overhauls or complex IT development in order for suppliers to offer them. In reality, the technology has matured to the point where integration is straightforward. Fintech partners with APIs and ERP connectors now allow businesses to issue, manage, and reconcile virtual cards directly within existing financial workflows.
Platforms like Credit Key make this even simpler by issuing virtual cards to approved borrowers, and removing supplier-side risk. Merchants don’t need to worry about collections or default, as funds are paid in full once the transaction clears, and buyers gain instant access to financing through familiar checkout flows.
While virtual cards aren’t a new concept, Credit Key’s virtual card is tailored specifically for the realities of B2B
eCommerce.
In the past, many B2B buyers using virtual cards had to create a new card for every single transaction. That meant:
This made them cumbersome for ongoing supplier relationships. Credit Key takes a different approach, offering a fixed card number that can be saved to digital wallets and used across vendors, while still maintaining spending control.
By combining the flexibility of virtual cards with the embedded financing that today’s B2B buyers expect, Credit Key has created a tool that functions less like a payment workaround and more like a growth engine for both sides.
Credit Key’s virtual card was built with business realities in mind. By combining the speed of virtual cards with embedded financing, it gives businesses a tool that processes payments like a B2C card. For SMBs especially, these benefits can be significant.
The future of B2B payments is flexible, digital, and buyer-first. Virtual cards are leading the way, and the businesses that adopt them now will be the ones best positioned to maintain growth in a challenging economic market. Curious about the Credit Key Card? You can learn more here.