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Industry roundup: 29 June

Virtual card transaction values to increase by 370% globally in 5 years

A study by Juniper Research has found that the global value of virtual card transactions will reach US$6.8 trillion in 2026, from US$1.9 trillion in 2021. Virtual cards, secure digital cards with randomly generated details, will show strong growth as they are increasingly used for B2B payments. The research identified that businesses will value the simplicity of virtual cards, compared to the expensive and slow methods still being used, such as cheque payments, which remain popular in the US. 

The new research, 'Virtual Cards: B2B and B2C Applications, Competitive Analysis & Market Forecasts 2021-2026 Market Research', predicts that outside of the dynamic B2B market, the added security from virtual cards will also appeal to the consumer market. To capitalise on virtual card opportunities, vendors must identify which segment they are targeting and emphasise the most important value-added features, such as ERP integrations or consumer brand partnerships.

The report found that B2B payments will continue to account for the majority of virtual cards transaction value; amounting to 71% of the total value in 2026. While B2B sales occur less frequently, yielding under 1% of transaction volume in 2026, average transaction values are much higher in the B2B segment. This means that vendors must ensure that security features and automation are emphasised to facilitate large payments as efficiently as possible.

The research forecasts that the Indian subcontinent will be the fastest-growing region over the next five years, with transaction volumes increasing more than tenfold. India, in particular, will present enormous potential for vendors. This growth will be underpinned by the presence of major vendors in the region, such as SBI and Oxigen Wallet. The high adoption of virtual cards in the buoyant mobile wallets sector will drive e-commerce usage. Additionally, the report identified the requirement by the RBI from October 2020 for users to have control over card use to prevent fraud as a major growth driver.

 

Banks' digital readiness assessed in EBA report

The Euro Banking Association’s (EBA) Open Banking Working Group has released a new report that explores a reference operating model for banks on their way to digital readiness. The report covers both the implications of digital readiness at large, and the specific requirements for successfully initiating Open Banking on an operating model level. The research of the working group was enriched by the input of digital and Open Banking experts within the EBA member community, including digital leaders from 12 major European banks.

"Digitalisation has shifted customer behaviour, disrupted value chains, brought on new competition, and increased available data," said Vincent Brennan, Payments and Operational Resilience Advisor and former Deputy Chairman of the EBA Board, who led the working group throughout the delivery of this report. "Many banks have already started the transformation of their operating models to be ready for the digital environment - and they consider Open Banking as a critical element in this transformation."

Digital-ready banks have five characteristics in common: they are customer-focused, data-driven, technology-enabled, adaptive to change, and they open up to leverage ecosystem opportunities. Open Banking is a key ingredient for bringing those characteristics to life. Open Banking helps meet customer needs by providing more value through relevant products and services and by reaching customers right where they need these most. Open Banking also extends the scope of relevant data beyond organisational borders and helps achieve the agility needed for successful transformation.

"This report offers a framework for individual institutions as they are gearing their operating models towards digital and Open Banking readiness," said Thomas Egner, secretary general of the EBA. "We also hope that it will contribute to the ongoing dialogue on the challenges and best practices around digital and Open Banking operating model design. The EBA community’s support of this research shows that people are eager to share their experience and learn – especially with Open Banking that, despite its progress, still features plenty of unchartered territory."

 

EACT welcomes the Hellenic Association of Treasurers as a new member

The European Association of Corporate Treasurers is has welcomed its 24th member, the Hellenic Association of Treasurers (HAT). HAT is a professional association for Greek treasury professionals in Greece and abroad, as well as professionals interested in the Greek treasury news and market developments. 

The Association has 74 members from 9 countries who work in multinationals, large and medium-sized enterprises as well as the government and other European organisations. HAT's core activities include providing networking opportunities, professional development and access to seminars and events, participation in Working Groups, a forum, and career advice.

In a statement, the EACT said that Jean-Marc Servat, EACT chair, greets Alexandros Koliavras, president and co-founder of HAT and the members of the Greek association.

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