In the early days of email, the phrase “You’ve got mail!” instantly brought a sense of novelty and possibility — an everyday process, transformed by digital innovation. That moment marked the beginning of a shift toward faster, more convenient communication, reshaping how people connected and worked.Now, something similar is unfolding in the world of business payments. Where traditional credit cards have long helped business customers manage expenses and build credit, a new era is emerging: digital-first and virtual cards. Few community financial institutions (CFIs) have offered digital-first cards, especially to business customers. Now, however, more CFIs are issuing cards in-house. Digital-first (including virtual) cards are increasingly part of their offerings. Digital-first credit cards don’t have a physical presence. Virtual credit cards are a subcategory of digital-first cards, in that they are a digital version of a physical credit card. They mask physical card details with a randomly generated, temporary credit card number, expiration date, and security code. Adoption TrendsThe market for virtual cards is growing rapidly. It’s projected to expand from $2.4T to $9.1T in transactional volume by 2027, for what would be a 280% increase. An increasing need for digital solutions that streamline operations and enhance financial control is driving the expansion.Despite those growth numbers, only about 38% of businesses use digital-first cards to make or receive payments. Some owners of small and medium-sized businesses (SMBs) may not know that digital-first cards exist. If they are aware of digital-first cards, they may think that these are a tool primarily for large firms. However, digital-first cards are relevant for smaller companies, and they’re becoming more accessible, with increased awareness.SMBs that are using digital-first cards find they’re handy for online purchases, subscriptions and recurring payments, payments to vendors and suppliers, managing employee expenses, international transactions, and travel.Benefits of Digital-First Cards for SMBs
Digital-first cards offer several advantages that are particularly advantageous for SMBs.
Digital-first cards offer several advantages that are particularly advantageous for SMBs.
- No waiting period for physical cards. Users get immediate access. Digital-first cards, including virtual cards, let a business begin making purchases the same day a CFI issues the card. There’s no need to wait for a physical credit card to arrive in the mail.
- Enhanced security of card details. Digital-first cards are more secure than a standard credit card, because they generate unique numbers for each transaction, so that users don’t share actual card details with merchants. If one card is compromised, a business can deactivate only that card, without needing to get every employee a new card or update payment details with every vendor.
- Flexibility in real time. Businesses can connect multiple digital-first cards to a single business credit card or business account, which lets them tailor spending limits or track expenses in real time for specific projects or employees.
- Streamlined accounting. Digital-first cards can integrate into an SMB’s accounting and expense management platforms. That can automate reconciliation, which reduces manual work and lets commercial clients focus on running their businesses, rather than on accounting.
Assessing & Preparing for Digital-First Card Offerings: What CFIs Should DoCFIs looking to serve small businesses with digital-first credit cards should approach the research and potential implementation stages intentionally and strategically. Here are key actions to take:
- Assess SMB client needs and readiness. Survey clients to better understand their payment pain points, openness to digital solutions, and desire for instant access. This ensures any potential investment in digital-first cards aligns with what local businesses actually want.
- Clarify the value proposition and educate business clients. Clearly articulate and communicate how digital-first cards can benefit business customers, such as by providing immediate access to funds, better expense tracking, and improved security. Set up informational sessions or resources so clients know how these cards work and why they’re advantageous.
- Modernize systems and seek strategic partners. Confirm whether your institution’s core and tech stack can support real-time card issuing, digital onboarding, and mobile wallet integration. If needed, partner with experienced fintechs to fill gaps in technology or compliance for smooth rollout and support.
- Pilot with select business segments. If SMBs or certain customer segments show enthusiasm, consider launching digital-first cards to a small group of business customers, such as those requesting online solutions or with distributed teams. This helps you gather feedback from your most eager digital card users, refine features, and optimize messaging before a broader launch.
- Plan for seamless rollout and ongoing support. In the event that you move forward with digital-first card offerings, ensure that staff training, troubleshooting, and customer support are ready for increased digital engagement. Offer dedicated assistance and easy access to self-service tools so small businesses can quickly adapt and maximize the benefits of digital-first cards.
As business payments continue their digital transformation, digital-first credit cards present an exciting opportunity for both SMBs and community financial institutions. The benefits — immediate access, enhanced security, tailored controls, and streamlined financial operations — are propelling more small businesses to explore these modern solutions.For CFIs, thoughtful preparation is key. By listening to the needs of local businesses, building the right technology partnerships, and piloting offerings strategically, institutions can position themselves as trusted allies in their clients’ growth. Educating customers, rolling out solutions in phases, and investing in internal readiness are all essential steps for success.Ultimately, digital-first cards are more than just a new payment method — they’re a way for CFIs to differentiate themselves, build stronger business relationships, and keep pace with shifting expectations.
