Optimizing global virtual card programs and supplier acceptance

Summary
Virtual card programs have evolved into strategic disbursement tools that can turn procurement into a revenue center while accelerating payments and supplier onboarding. However, optimizing these programs requires navigating regional differences: North America focuses on increasing card spend and minimizing cross-border fraud, EMEA strategies are heavily shaped by VAT compliance and a cultural aversion to debt, and APAC is seeing rapid growth by leapfrogging legacy systems. As the landscape evolves, supplier acceptance is also shifting, with suppliers now prioritizing faster, more predictable payments over low transaction costs, making automation and AI analytics critical for identifying the right vendors for early payment and card programs.

The strategic shift in virtual card programs

Change is afoot in the payments landscape, with new technologies and solutions enabling new ways to make and receive payments.

Against this backdrop, many procurement and finance teams are looking at virtual cards differently – not least because the virtual cards available today are very different from those of 15 years ago. Rather than being a digital version of a familiar piece of plastic, or a ‘one-size-fits-all’ solution, today’s virtual cards are sophisticated disbursement tools that can meet myriad business needs.

For some companies, cards present an opportunity to gain an incremental revenue stream that can be used to fund other initiatives, thereby transforming procurement from a cost center to a revenue center. Other businesses are more focused on speeding up payments for certain categories of suppliers or freeing up procurement staff from time-consuming onboarding processes.

But as the market continues to evolve, variations in practices across countries and regions can pose significant challenges for global virtual card programs. So what do companies need to consider when operating a best-in-class card program in North America, EMEA, and APAC? And how are the latest developments impacting supplier acceptance around the world?

Global landscape and regional nuances

What’s driving virtual card adoption in North America?

Companies in North America are adopting virtual cards for a variety of reasons, from accessing different balance sheet sources to turning procurement into a revenue center.

While North America continues to dominate global card transaction volumes, many companies in the region process only 1-2% of their spend with cards – even though their own analysis has set a target of 10-15%. As such, many companies are now actively looking to move more of their spend onto cards.

Likewise, businesses are looking for more creative ways to pay their suppliers, including using prefunded cards and flexible payment solutions. In particular, companies that make cross-border payments are seeking ways to pay their suppliers securely while minimizing the risk of fraud.

And of course, virtual cards can drastically speed up supplier onboarding – a time-consuming process which can sometimes take several months to complete. Virtual cards provide a quick and easy way of paying long-tail suppliers and gig workers, freeing up procurement staff for other tasks while reducing supplier frustration.

And last, but certainly not least, employees can use virtual cards to make purchases quickly and easily.

How do virtual card strategies differ in EMEA?

In EMEA, virtual card strategies are heavily shaped by factors such as invoice compliance, value-added tax (VAT) requirements, and historical aversions to corporate debt.

But while EMEA is often discussed as a single region, supplier needs and adoption patterns can vary significantly across markets. For example, there are significant differences in how B2B embedded card programs are managed in the UK, compared to mainland Europe. In countries like Germany, meanwhile, a cultural aversion to debt on the balance sheet can make prefunded card programs particularly attractive.

A further consideration for organizations in EMEA is the need to navigate regulatory limits, such as interchange fee ceilings.

Why is Asia Pacific (APAC) the fastest-growing region for B2B embedded payments?

APAC is experiencing rapid growth as many organizations are leapfrogging legacy infrastructure and are instead integrating payments directly into existing workflows.

New solutions are giving suppliers more flexibility over how they get paid. For example, merchant-of-record solutions enable a model in which the buyer issues a card, and suppliers receive payments directly into their accounts.

Virtual cards are also helping companies in APAC address long-standing challenges that can arise with cross-border payments, such as a lack of visibility and reconciliation challenges. Cards are giving these companies an opportunity to bypass traditional correspondent banking models and access the transparency, visibility, and predictability they need.

Real-world impact and emerging trends in supplier acceptance

How is automation changing supplier perceptions of virtual cards?

Automation is minimizing the operational burden on suppliers – and this, in turn, is helping to address the challenge of supplier perception.

Historically, suppliers may have been concerned that card payments are expensive and can result in hidden or unexpected fees. But increasingly, suppliers are starting to carry out their own analysis. In particular, they’re looking at the value and speed of payment that card payments can offer due to increased automation and seamless reconciliation.

For buyers seeking to pay suppliers by card, it’s important to have upfront conversations with those suppliers in order to give them clarity over the P&L impact of card payments at the outset.

Do suppliers care more about payment speed or transaction costs?

Research shows that suppliers are more focused on faster, more predictable payments than on keeping transaction fees low.

While suppliers might be able to minimize transaction costs by using traditional collection methods, this approach takes time and effort – both in terms of chasing overdue payments and in the time needed for reconciliation.Increasingly, suppliers understand that avoiding transaction fees isn’t worth the burden involved in chasing up receivables. Instead, they’re exploring how they can use more efficient payments to manage cash flow and improve the stability of their own supply chains.

How are data and AI optimizing supplier acceptance programs?

By using virtual card AI analytics and agentic AI, companies can identify which suppliers are best suited for card payments and early payment discounts.

For one thing, not all vendors present the same level of risk within the supply chain. By using data effectively, companies are better placed to identify which suppliers require detailed due diligence and which should be targeted for enrolling on a card program.

AI-driven dashboards can also be used to flag situations where buyers can capture discounts by paying vendors faster. For suppliers, meanwhile, there may be an opportunity to use agentic AI to negotiate terms on their card programs.

Conclusion

In summary, today’s virtual cards are sophisticated disbursement tools that can meet a variety of business needs – and suppliers are increasingly recognizing the value they can offer. By understanding regional variations and working collaboratively with suppliers, companies will be better placed to harness virtual cards effectively.

Assess your program

Is your organization stuck at 1-2% virtual card spend? Are you concerned about supplier perceptions of virtual cards? Contact SAP Taulia today to map out your virtual cards strategy.