Digital Shift Accelerates: Over 40% of U.S. Consumers Now Use Virtual Cards

The use of virtual cards may be expanding soon as more than 4 out of 10 consumers in the U.S. say they have used virtual cards to complete transactions within the past six months, according to a new study from PYMNTS Intelligence.

Millennials, Gen Z, and higher-income consumers are driving the trend with nearly half or more of survey respondents in those demographics reporting they used a virtual card in that time period, signaling strong future demand.

While nearly 3 out of 4 people would prefer to use their virtual cards for at least one type of payment situation, more consumers said they would use the cards if they had a better understanding of their benefits and security features, according to the study. Consumers primarily use virtual cards to pay for subscriptions and online purchases.

The global virtual cards market size is expected to reach $60 billion in 2030 and is projected to grow at a CAGR of 21.2% from 2025 to 2030, according to a 2024 Research and Markets report.

From a security standpoint, virtual cards offer compelling solutions that their physical counterparts can’t match. People can set their virtual cards to generate a unique card number for purchases they make online or with their smartphone.

“Consumers already use virtual cards more often than is commonly realized, and that adoption is poised to take off further this year,” the study’s authors wrote. “As comfort with digital payment methods grows, consumers are increasingly exploring virtual cards for their ability to offer temporary numbers that protect against fraud.”

Some people use virtual cards for their security features which safeguard their financial data and purchasing history. But others turn to virtual cards after encountering payments fraud. 

More than 60 million Americans saw fraud impact their credit or debit cards in 2024. The PYMNTS Intelligence study reveals that 36% of consumers who have experienced security issues or been victims of fraud are more likely to make use of a virtual card. 

But credit card issuers can teach consumers, who may be hesitant to try products with unfamiliar technologies, about the value of using virtual cards to help reduce the risk of fraud.

“Framing virtual cards as a post-fraud recovery tool, rather than simply as a high-tech payment option, could shift perception and drive adoption among security-conscious consumers,” the study’s authors wrote.

The study highlights that, while virtual card use is on the rise, consumers still prefer to use physical cards for many transactions. That’s especially true when it comes to in-person payments.

Consumers use physical cards to complete more than 70% of restaurant purchases and greater than 69% of in-store purchases made at both large and small retailers.

Credit card issuers that can attract relatively young consumers may be able to retain them as clients for decades and enhance customer lifetime values.

Generation Z, or those born from 1997 to 2012, lead the way in virtual card adoption. According to the study, 61.6% of Gen Z have used a virtual card within the past six months to make a payment.

Millennials, defined as people born from 1981 to 1996, are the only other generation that the study found to have more than 50% of its members use a virtual card recently.

Members of Generation Z use virtual cards more than other generations.

For issuers, those figures underscore how important offering a virtual card program can be in terms of attracting younger cardholders. 

Virtual cards also appeal to individuals who earn higher incomes. Over 46% of those making more than $100,000 annually have used a virtual card in the past six months. Recent virtual card usage drops to 43.1% for people whose annual incomes range from $50,000 to $100,000 and 36% for those earning less $50,000 per year.

Credit card issuers may be able to entice consumers of all ages and incomes to try a virtual card by educating them about their benefits.

“Providers should offer simple, guided tutorials to demonstrate ease of use and highlight features, especially for consumer segments unfamiliar with advanced digital payment tools,” the study’s authors advised.