Fool me once, shame on you. Fool me twice, shame on me. Fool me thrice, won’t get fooled again.
That’s the emerging story when it comes to shoppers and payments fraud. And with cybercriminals lurking, a growing number of U.S. consumers are ditching their plastic for virtual cards that offer stealthy, one-time-use numbers designed to outsmart digital thieves.
According to new findings from PYMNTS Intelligence report “Digital Payments Evolution: Virtual Cards Poised to Take Off,” a collaboration with Elan, 42% of U.S. consumers used a virtual card in the past six months, and a staggering 65% say they are likely to use one within the next year.
What’s driving the growth? It’s more than one in three consumers (36%) who have experienced fraud that are now more likely to use the payment method.
The shift reflects a significant behavioral transformation: one catalyzed by consumers’ desire for security, flexibility and control in an era where fraud and data breaches are no longer hypotheticals but personal realities for millions.
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Unlike traditional physical cards, virtual cards exist solely in digital form. They can be tied to an underlying credit or debit account but offer unique advantages: single-use or transaction-specific numbers that dramatically reduce the risk of fraud.
Consumers can use them for online purchases, subscription services or even in-store via mobile wallets like Apple Pay or Google Wallet. These numbers often expire after a single use or transaction, making them an inherently safer option in a world of growing digital threats.
PYMNTS Intelligence data reveals that 56% of users have used a virtual card number that differs from their physical card, underscoring the perception — and reality — of heightened security. Nearly 1 in 4 consumers have used one-time-use virtual card numbers, and 28% have used them for automatic payments, functions that go beyond mere convenience to offer real-time control over recurring charges and merchant access.
Consumers classified as “Connected Tech” users — those who use everything from virtual reality headsets to electric vehicles and smart home security systems — show a 74% usage rate for virtual cards. Adoption among this cohort includes advanced features: 50% have used single-use card numbers, and 55% have created store-specific virtual cards.
Most virtual card use cases begin in the same place: the smartphone. Unsurprisingly, their adoption skews younger and more affluent.
In the past six months, 62% of Generation Z and 57% of millennials used a virtual card, compared to only 22% of baby boomers. But the ecosystem isn’t limited to digital natives. Even consumers in the “Mainstream Tech” category — those who use common connected devices but aren’t using more advanced devices — are warming up to the payment method. Nearly 3 in 4 consumers now say they would prefer a virtual card in at least one payment situation, particularly for online shopping and subscriptions.
As the digital payments ecosystem matures, virtual cards are poised to become the default for many payment scenarios — especially online transactions, international purchases and subscription services. But even in in-store settings, momentum is building as mobile wallet usage becomes ubiquitous.
The implications are broad. For card issuers and banks, virtual cards represent a chance to differentiate on security and experience. For merchants, especially online retailers and subscription providers, supporting the payment method could mean higher customer trust and fewer chargebacks. And for consumers, they represent a step closer to a more secure, controlled and responsive financial life.
In the race to build trust in digital payments, virtual cards may not just be the future — they may already be the present. Financial institutions that recognize this shift and educate their customers accordingly could be best positioned to lead in the next evolution of consumer finance.
