Covid-19 Impact & Market Status
The impact of the epidemic is extensive, and the aftermath is severe, causing havoc on the global commercial card market. As a result of the sudden epidemic and its ramifications, travel bans, quarantines, and lockdowns have all been implemented.
In a short amount of time, the COVID-19 pandemic had a profound influence on markets, customer behaviour, economies, and society. Businesses are increasingly seeking ways to assist them to navigate through these hard times, with offices, educational institutions, and manufacturing facilities closing indefinitely, significant sports and events being postponed, and work-from-home and social distance laws in place.
These developments have resulted in supply chain breaches, stock market inefficiencies, and vendor instability. These are constantly interfering with the normal operations of the industry. Since the commencement of the global crisis, the impact on the upstream, downstream, and midstream businesses has been disastrous. The report offers a ready-to-use method for coping with such crises as well as steering the global Commercial Card Market toward long-term growth and progress.
New dynamics have evolved in the global Commercial Card Market as a result of the pandemic, encouraging the creation of new business models and ways to recover growth and income streams.
Inquisitive business players will discover enough business transformation proposals in this study, which are crucial to sustaining strong competition in the global Commercial Card market during the pandemic and post-pandemic period.
Purchase Cards is estimated to be a lucrative segment in the upcoming years
The purchase cards segment is expected to dominate the commercial card market among product types, and this dominance is expected to continue during the forecast period. P-cards are another name for purchase cards. A purchase card is a type of bank card that allows businesses to make electronic business-to-business payments for products and services by utilizing current card systems and processes. Purchase cards are favored by new and rising businesses looking to cut payment fees and send payments at a lower cost. The purchase card segment is growing due to the perks supplied by banks and major card providers in order to attract more clients. For example, American Express provides free travel insurance, as well as access to global emergency and medical services, to travelers who purchase airline tickets using their p-card. Furthermore, the Chase Bank Ink Business Unlimited card offers a payback benefit to businesses that spend more than US$ 3,000 on purchases in the first three months after opening the card.
Market Players are concentrating their efforts on North America and the Asia Pacific.
The commercial card market is predicted to be dominated by North America, which is expected to continue throughout the forecast period. The rising trend of digitalization, as well as the region's status as an early adopter of new technologies, are important factors driving market expansion in this region. The increased adoption of commercial cards by various buyers and suppliers has been a major trend in the industry in this area as clients move away from physical checks and toward electronic payment options. Furthermore, numerous firms in the United States are progressively adopting electronically produced virtual card numbers as a highly effective purchasing tool. According to the National Automated Clearinghouse Association, business-to-business electronic payment transactions in the United States have climbed by over 5.5 percent in recent years.
The Asia Pacific commercial card market is likely to grow considerably over the forecast period. Increased business travel spending in the Asia Pacific area is one of the primary factors propelling the commercial or corporate card market forward. Furthermore, in recent years, Asia Pacific accounted for about half of all global corporate travel spending. China is one of the key countries in the Asia Pacific with the highest share of business travel spending. As business travel spending rises, demand for travel cards rises as well, accelerating the market's growth in the Asia Pacific area.
A commercial card is a credit or debit card that a company issues to its workers for use in conducting business on the company's behalf. Commercial cards, which are frequently co-branded with retailers, allow businesses to keep track of their spending by aggregating all charges made by employees into a single location. Employees can use a commercial card to make purchases on behalf of their employer rather than spending their own money. Companies typically utilize commercial cards to keep track of such spending in order to better analyze the impact on the company budget. Credit cards issued by a financial institution are known as commercial cards. They're frequently co-branded with another organization that collaborates with other organizations, such as building supply stores and gas providers. This type of cooperation enables businesses to earn incentives and discounts for purchases they would have made anyhow at the co-branded business.
Despite the hindrances created by the Covid-19 Pandemic, the global commercial card market is anticipated to exceed US$ 283 million by the end of 2021, with a compound annual growth rate (CAGR) of 8.3% by 2028.
Financial technology innovators are increasingly bending the digital backbone of global trade. They're collaborating with card networks and issuers, as well as launching their own start-ups, to find ways to offer value, improve income, and reduce fraud and human error. They're competing against and partnering with the existing commercial card industry to dispel misconceptions about what a commercial card programme is and what problems it can solve. Fintechs have provided the business credit card market with a number of innovative and category-enhancing solutions. From virtual cards that allow platform payment transactions for food delivery services to integrating payments in vertical software-as-a-service, fintech is boosting card use while helping businesses save money.
Commercial cards allow businesses to manage to spend by merchant categories (MCC), day of the week, and time of day. Spending can be regulated in real-time using a number of messaging alternatives (e.g., SMS, email). Commercial card innovators are delving deeper into regions with low card penetration, with solution providers intending to link businesses to card benefits such as improved cash flow management. Mastercard is eyeing India, Visa is eyeing Finland, and CardUp is eyeing Asia to assist small and medium-sized enterprises to use and accept corporate card payments, according to this week's look at Commercial Card Innovation.
Card programmes are increasingly becoming important parts of bigger company strategies, notably those involving cost-cutting, supplier control, and geographic growth. The most frequently mentioned goals of these programmes are cost savings, bettering expenditure insights to improve negotiating power and sourcing, and providing high levels of assistance to cardholders and other stakeholders.
Commercial clients' need for simpler, automated, and optimized experiences is accelerating transformations in provider operating models and go-to-market strategies, thanks to market advances. User-centric design, next-generation e-/m-interaction points, and infrastructure modernization are all converging on the platform, process, and workforce change. As payments become digital, providers are examining future-state business models, with a range of collaboration models becoming more frequent to enable use cases and decrease friction across the corporate journey.
However, there are a number of factors driving the increased interest in commercial cards in both large and medium markets. These companies frequently seek out higher degrees of automation and advanced technology associated with commercial cards, such as the capacity to swiftly assess whose suppliers they spend the most money with and the ease with which payments may be applied to invoices. Commercial cards are gaining in popularity due to the increasing availability of virtual cards. The ability to reduce fraud is most likely the most important factor.
The major players of the global Commercial Card Market are American Express, China UnionPay, JCB, Mastercard, Visa, Citigroup, JP Morgan, HSBC, Bank of America Merrill Lynch, Swisscard AECS GmbH, NBS, Banco Itau, ING Bank N.V. and Barclays among others.
Key Developments in the Global Commercial Card Market: A Snapshot
- FAB (First Abu Dhabi Bank), the UAE's largest bank and one of the world's largest and safest financial institutions, will debut the new FAB Virtual Corporate Debit card in February 2022. With the addition of this new service, FAB's GTB (Global Transaction Banking) Virtual Account e-commerce enabled product options for corporate and commercial clients have been increased.
- Commercial Bank, Qatar's leading digital bank, partnered with Visa, FIFA's Official Payment Service Partner, to launch a special edition Visa FIFA World Cup Qatar 2022 Credit Card in February 2022, with the goal of generating excitement and attracting football fans ahead of the mega event in November 2022.
Commercial Card Market Scope
|Forecast Unit||Value (USD)|
|Revenue forecast in 2028||US$ 283 million|
|Growth Rate||CAGR of 8.3% during 2021-2028|
|Segment Covered||Product Type, Application, Card Type, Regions|
|Regions Covered||North America, Europe, Asia Pacific, Middle East and Africa, South America|
|Key Players Profiled||American Express, China UnionPay, JCB, Mastercard, Visa, Citigroup, JP Morgan, HSBC, Bank of America Merrill Lynch, Swisscard AECS GmbH, NBS, Banco Itau, ING Bank N.V. and Barclays among others.|
Key Segments of the Global Commercial Card Market
Product Type Overview
- Purchase Cards (P-Cards)
- Travel & Entertainment (T&E) Cards
- Business Card
- Gift Card
- Fleet and Multi-use cards
Card Type Overview
- Closed – Loop Cards
- Open – Loop Cards
Application Type Overview
- Corporate Credit Cards
- Small Business Credit Cards
- Small Business Debit Cards
- Corporate Debit Cards
- Rest of Europe
- Rest of APAC
- Rest of South America
Middle East and South Africa
- Saudi Arab
- Rest of MEA