A virtual card is a unique 16-digit card number that’s digitally-generated. From the Divvy app, you can create virtual cards and assign them to individual vendors, while limiting budget amounts.

We figured that our customers use virtual cards mostly for online transactions (since you can’t really hand a virtual card to a cashier), but we wanted to dig into the data and see where and when virtual cards are really being used.

Virtual card spend vs. physical card spend

First, we analyzed total cleared spend (over the last three months) to see who the most popular vendors are for Divvy customers. Next, we pulled out the top 20 vendors and separated spend totals by virtual card transactions and physical card transactions. 

We calculated the percentage of total spend made up by virtual and physical purchases, then, ranked the vendors from highest virtual spend to lowest. 

Here’s what we found:

The top three channels for online ads—Google, Facebook and LinkedIn—were near the top of our list. Google Ad purchases were made almost exclusively on virtual cards (only 5% of these transactions used a physical card number). 

UPS had the second highest percentage of virtual spend overall—92% of all transactions—which was a bit surprising as they are primarily concerned with the delivery of physical goods. However, many shipping companies are making it easier for business customers to set up digital billing, facilitating an increase in virtual transactions.

Physical card favorites

We expected almost all Amazon transactions to be virtual (since it’s an online shop and ranked #1 for regional virtual card purchases). We were surprised when we saw a pretty even split. When compared to overall spend, there were still 44% of purchases that occurred on physical cards. 

Similarly, Hotels.com (a company built entirely online), had one of the lowest percentages of virtual card spend—only 18%. However, this is likely because of the nature of the purchase. When you book a hotel, you often have to present your physical card to check in. Savvy customers are likely preparing for this with their choice of card type. 

Physical cards were also favored for the majority of airline purchases, including Delta, Southwest, American, and United Airlines—likely for the same reason as Hotels.com

Virtual cards are still growing in popularity

Virtual transactions were the lowest at home improvement stores—only 1% of Lowe’s purchases were made using a virtual card. Home Depot performed slightly better in the virtual category, hanging onto 15 percentage points. This makes sense since Home Depot has historically “crushed Lowe’s when it comes to online innovation” (growing online sales five times faster than Lowe’s in Q2 of last year). 

Virtual credit cards have already become much more trusted for business transactions (though some businesses remain hesitant). As more businesses become accustomed to virtual spending (and brick-and-mortar stores continue to prioritize digital access), we anticipate virtual card popularity will continue to grow.

Divvy is free expense management software paired with smart corporate credit cards. If you want to learn more about our product, we’d love to schedule some time to chat.

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