Tradeshift sees use of virtual card explode: ‘That’s the point of digital transformation’

From its perch in the AP automation and fintech market, Tradeshift said it is seeing huge growth in virtual-card use, and CEO and co-Founder Christian Lanng told Spend Matters that the Covid disruption set the stage last year but said other factors are contributing to the spike in use.

Its virtual credit card product, Tradeshift Go, is on track to process $2.5 billion in charge volume this year — a sixfold increase over 2020, the provider said about the product, which for now is used only in the US. Tradeshift said its 2019 charge volume was $120 million and the 2020 charge volume was $400 million.

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Lanng said the v-card’s ease of use is not the only factor.

“We have a whole new generation of people and companies out there where legacy business credit cards were never really the model,” he said, explaining that as more companies adopt technology for procurement and other business functions, they’re finding ways to use it more often.

“That’s the point of digital transformation,” Lanng said.

He said v-card activity leveled off in the first year of the Covid crisis, but as more companies have gone digital, the activity has exploded. He reported that Tradeshift Go has grown to 2,000 customers in the last four years. And half of that was added this year, Lanng said.

Users find the approval process via a chatbot tool like Slack to be easier to use, so adoption has increased, he said. And CFOs and CPOs find that modern platforms give them more analytics and visibility into spend — like the long tail of suppliers and maverick spend from users — so adoption from the business leaders also helps increase the use.

“The virality we’re now seeing in key areas across our business is rooted in the connectivity that comes from bringing buyers and sellers together on a single global network,” Lanng said in a press release. “The more we embed access to value-added services like Go, the more compelling it becomes for businesses to join the network. It’s a virtuous circle that brings with it opportunities for massive scale and diversification.”

He also told Spend Matters that he expects Tradeshift Go’s charge volume to go as high as $6 billion to $8 billion next year as more firms go digital.

“A lot of suppliers love the product, which is meant for the mid-market. But we actually get surprises in who is picking it up, like very big companies,” he said.

And in the future, Lanng expects more of a merger between SaaS procurement technology and areas that fintechs handle.

“You want solutions that are seamless, that are digital, that work with your existing systems,” he said. “If they’re managing the invoices, the budget and the analytics, why not also just issue the comp? You’re most likely to actually have better data than the bank anyway, right?”

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