Pleo Embedded: Virtual Cards and Embedded Finance: Driving SME Loyalty in 2026

Small and Medium Enterprises (SMEs) are operating under sustained pressure. Finance teams are expected to do more with less, often while relying on manual processes, fragmented tools and retrospective reporting. The result is friction, lost time and limited visibility, precisely where modern financial infrastructure should be delivering control and clarity.

For many SMEs, the day-to-day reality still involves juggling spreadsheets, reconciling spend after the fact and switching between multiple systems to answer relatively basic financial questions. This administrative burden does more than slow teams down. It anchors organisations to legacy ways of working governance and limits their ability to respond quickly to change . This is the gap embedded finance and virtual cards in particular are now closing.

From Pleo's perspective, virtual cards are not a standalone product. They are core spend infrastructure, most powerful when embedded directly into the platforms SMEs already trust to run their businesses.

Virtual card adoption among SMEs is already meaningful. A recent Mastercard research shows that 80% of SMEs report using virtual cards in some capacity, most commonly for accounts payable, travel and entertainment, and delegated employee spend (SME Virtual Card Analysis, Mastercard Research, Dec 2025).

But this stat hides an important insight: usage remains narrow. Many SMEs use virtual cards in one or two familiar scenarios, without extending them across broader spend categories where the operational benefits compound. This is where platforms have a critical role to play.

The same research identifies supplier acceptance as the leading barrier to deeper adoption, cited by 33% of SMEs globally, followed by security and fraud concerns (29%). Notably, these concerns decline as SMEs gain hands-on experience, indicating that hesitation is often driven by limited exposure rather than structural resistance. In other words, the challenge is not whether SMEs want virtual cards, it is whether they are introduced in the right context.

One of the clearest signals from the data is the impact of education. The majority of SMEs, i.e.  90%, report a more favourable view of virtual cards after learning about additional use cases, and almost all say they would be more likely to start or increase usage once the benefits are clear.

Employee delegated spend stands out as a particularly effective entry point. Fifty-seven per cent of SMEs not currently using virtual cards cite it as a use case under consideration, making it a natural entry point: familiar, controlled and immediately valuable.

At Pleo, we see this pattern repeatedly. When virtual cards are embedded into everyday workflows , supported by contextual guidance, controls and automation, they shift from being a payment method to becoming part of how the business operates. Education, when delivered natively inside the platform, becomes a growth lever rather than a marketing exercise.

Across all markets, SMEs rank security and fraud protection as the most important payment consideration, reflecting the disproportionate impact a single incident can have on smaller organisations. This concern is particularly pronounced in higher-risk regions, where security is rated ‘extremely important’ by the majority of SMEs.

Crucially, 45% of SMEs identify stronger fraud and security guarantees as the top enabler of future virtual card adoption, reinforcing the role virtual cards can play as a safer, more controlled alternative to traditional payment methods. But security alone does not drive sustained usage. SMEs also care deeply about speed, ease of reconciliation, automation and integration, especially as payment volumes increase. This is where embedded delivery becomes decisive.

API-first issuance, granular controls and deep integrations with accounting and expense systems dramatically reduce operational lift for finance teams. When virtual cards are embedded directly into the tools SMEs already use, complexity disappears into the background.

Mastercard’s research shows a strong correlation between virtual card usage and SME scale. SMEs in the top revenue quartile report 88% utilisation, rising to 96% among the largest firms. Digitally native and emerging SMEs also outpace mature, legacy organisations. But scale alone does not explain adoption.

What matters is context. When virtual cards are delivered through platforms SMEs already rely on, with permissions, controls and automation built in, adoption becomes operationally easy, even for more conservative businesses. Embedded finance lowers the perceived risk of change by making new capabilities feel familiar.

For SMEs, loyalty is not driven by brand promises or feature lists. It is earned through daily usefulness. Platforms that embed virtual cards into core workflows remove friction, reduce manual effort and provide real-time financial clarity. In doing so, they move from being helpful tools to becoming essential infrastructure.

Mastercard’s research highlights the scale of the opportunity: nearly 70% of SMEs believe virtual cards would meet their needs better than incumbent transfer methods. Demand exists, but SMEs will only adopt what is intuitive, integrated and embedded into the tools they already trust. This is where embedded finance becomes a loyalty engine.

By end of 2026, virtual cards will no longer differentiate platforms by their presence, but by how deeply they are embedded and how intelligently they are delivered. SMEs are not asking for more financial products. They are asking for fewer decisions, clearer controls and confidence that their finances are working quietly in the background. Embedded finance delivers that outcome.

For platforms and financial institutions, the opportunity is clear: embed virtual cards where SMEs already work, support them with education and automation, and transform a transactional payment tool into long-term loyalty. That is how embedded finance defines the next era of SME relationships.