From OTA hotel settlements to TMC reconciliation, the infrastructure reshaping how money moves through the travel supply chain is already here. The question is who captures the value and who gets left behind.
Every time an online travel agency books a hotel room, two separate payment transactions take place. The traveler pays the OTA. The OTA pays the hotel. That second leg — the B2B settlement — has for decades been dominated by IATA BSP remittances, wire transfers, and lodge cards that would look familiar to anyone who worked in distribution in 1995.
Virtual cards have quietly become the connective tissue disrupting that model. Single-use, API-generated, and configurable by design, they are not simply a digital replacement for plastic lodge cards. They represent a payments infrastructure layer, one now beginning to reshape reconciliation workflows, fraud exposure, cash flow dynamics, and the commercial relationships between intermediaries and suppliers across the entire distribution stack.
The question is no longer whether virtual cards will become standard in travel B2B payments but how quickly the industry closes the supplier-acceptance and automation gaps to get there.
$5.2T Global virtual card transaction volume in 2025 — 76% driven by B2B spending (Juniper Research)
The Infrastructure Moment
The numbers are striking, but the mechanics are more so. Virtual cards; 16-digit account numbers generated on demand, typically single-use, with configurable spend limits and merchant category controls have moved well past their corporate travel management origins. Juniper Research puts global virtual card transactions at $5.2 trillion for 2025, with the B2B segment at 76% of that volume. By 2029, B2B virtual cards are forecast to reach $14.6 trillion representing 83% of the total market.
Within travel specifically, penetration is already advanced on the OTA-to-hotel channel. Edgar, Dunn & Company estimated virtual cards at 40% of OTA payments to hotels by end of 2022, a share that has continued climbing as Booking Holdings, Expedia, and their regional peers have standardized API-based issuance for supplier settlements. The commercial logic is clean: the OTA holds the customer’s funds, generates a virtual card at the time of booking, and settles with the hotel at check-in or check-out. The hotel gets guaranteed payment. The OTA gets float economics, interchange revenue, and a structured audit trail.
That value exchange is the foundation of the virtual card model in travel. Modulr projects revenue from virtual card transactions in the travel sector alone rising to $113.8 billion by 2028 a figure that signals this is now a strategic fintech battleground, not a back-office efficiency story.
Why Now
Several structural forces are converging. First, the fraud environment has deteriorated materially. With 90% of travel businesses in a 2024 Modulr survey expecting digital fraud to increase, the tokenization and single-use properties of virtual cards are a genuine risk management tool not a marketing feature.
Second, the regulatory and standards landscape is tilting in virtual cards’ favour. IATA’s Transparency in Payments initiative, the NDC buildout, and the EU’s evolving PSD3 framework all push toward digital, traceable, structured payment flows exactly what virtual card infrastructure produces. NDC is particularly relevant: as airlines move distribution off legacy EDIFACT and onto offer-and-order APIs, the payment settlement layer must modernize in parallel. Virtual cards fit that architecture far more naturally than lodge cards or BSP settlement ever could.
Third, the TMC sector is catching up fast. A 2024 survey of procurement leaders found over 90% either using, planning to use, or actively evaluating virtual cards for supplier payments. The corporate travel use case; one unique card per trip, per traveler, per booking delivers the spend granularity and automated reconciliation that finance departments have wanted from T&E programs for years.
74% of airlines identified improved cash flow from shorter settlement cycles as the primary benefit of accepting virtual cards ahead of fraud reduction and reconciliation automation.
Where the Friction Lives
The adoption story is real but uneven. Supplier acceptance remains the central constraint. A virtual card is ultimately a card payment which means the supplier needs a merchant acquirer, POS capability, and a willingness to absorb interchange fees running 1.5 to 2.5% of transaction value in many markets. For hotels in high-cost acceptance environments, that is a material line item, and it creates a structural tension in the OTA-hotel commercial relationship that has not been fully resolved.
Reconciliation automation is the second gap. While issuance has matured significantly, the back-end matching of card transactions to bookings, invoices, and PMS records remains heavily manual at many suppliers. Modulr’s 2024 research found that 60% of companies surveyed had not explored automation solutions for virtual cards, a gap that reflects workflow readiness more than skepticism about the technology itself.
The geographic dimension matters too and is particularly relevant for this publication’s readers. North America and Western Europe have mature acquiring infrastructure and deep card network penetration. The picture changes substantially across Southeast Asia, the Middle East, and sub-Saharan Africa — markets representing a fast-growing share of global travel volume. Real-time payment rails like M-Pesa, bank transfer dominance, and thin acquiring infrastructure in many African markets mean global VCC programs need a localized strategy, not just a global card BIN. Not all issuers have that reach, and distribution players in these markets cannot assume a single virtual card solution will translate.
40% Share of OTA-to-hotel payments made via virtual card by end of 2022, per Edgar, Dunn & Company and still rising
The Platform Layer Is Taking Shape
What has changed in the last 24 months is the emergence of a genuine platform layer sitting between card networks and travel distributors. Companies like Nium, Modulr, WEX, and Amadeus Payments (Outpayce) are building API-first infrastructure that allows OTAs, TMCs, and travel management companies to embed virtual card issuance directly into their booking flows without needing to become regulated payment institutions themselves.
The Nium model is instructive. Rather than competing with banks as a card issuer, Nium operates as licensed infrastructure providing the BINs, API rails, FX conversion, and compliance stack while the travel platform sits on top and controls the user experience. A mid-size OTA can issue virtual cards in 40+ currencies, configure per-transaction rules, and receive structured settlement data, all without rebuilding its payments architecture. The recent HBX Group partnership with Outpayce signals that even large B2B wholesalers are now moving in this direction.
OTAs are also beginning to treat virtual card programs as a revenue line rather than a cost centre. One emerging model: the price-lock product, where a traveler pays a fee to hold a fare, and the OTA manages the downstream supplier payment via virtual card regardless of whether the booking completes. The payment infrastructure becomes an enabler of new commercial products not just a settlement mechanism.
What Comes Next
Three developments are worth watching over the next 18 to 24 months. First, API-scale issuance will become a baseline expectation, not a differentiator. Platforms that cannot generate, configure, and reconcile virtual cards programmatically will face a structural disadvantage in OTA and TMC RFPs.
Second, the data layer is the real battleground. Transaction-level data generated by virtual card programs; merchant category, amount, timing, geographic origin is substantially richer than what lodge card or wire settlement produces. Platforms that can convert that data into booking insights, fraud signals, and supplier analytics will hold a durable advantage over those treating cards as commodity settlement infrastructure.
Third, the airline channel will accelerate. Airlines have been slower to embrace virtual card settlement than hotels, partly because BSP and ARC remittance infrastructure is deeply embedded in airline finance operations. But the combination of NDC-driven distribution reform and demonstrated cash flow benefits; Amadeus data shows 74% of airlines citing faster settlement cycles as the top benefit is building real pressure for change. Watch the IATA TIP initiative as a bellwether.
The broader arc is infrastructure maturation. Virtual cards in travel are past proof-of-concept. The outstanding questions are execution speed: how fast the supplier side closes acceptance and automation gaps, how aggressively platforms invest in the data layer on top of basic issuance, and whether NDC and PSD3 tailwinds turn acceleration into something closer to a mandate.
Based on where the capital is flowing and where the standards bodies are pointing the answer looks like faster than the industry currently expects.
Data references: Juniper Research, Edgar Dunn & Company, Modulr (2024 Virtual Card Report), Amadeus, PYMNTS. All projections are third-party estimates and subject to revision.
