According to the Market Statsville Group (MSG), the global commercial cards market size is expected to grow from USD 4764.72 million in 2022 to USD 10556.75 million by 2033, at a CAGR of 7.5% from 2023 to 2033. Commercial cards are commercial debit cards or commercial credit cards given to employees by businesses so that they can purchase a product on behalf of the company. The cards are frequently co-branded with specific retailers or gas stations, limiting employees' ability to make purchases only at those locations. Many new businesses rely on commercial credit cards to cover their operating expenses. All types of expenditures can be paid for with Commercial Cards, including business supplies, maintenance, repairs, operational expenses, and travel. The card programmes are intended to support the priorities of the organization. Further, the online tools will allow employees to spend less time authorizing, tracking and processing expense data. Simultaneously, business planning experience and single-point-of-contact support that can aid in improving efficiency and lowering costs.
A commercial card is a credit card or debit card that a business gives to its employees so that they can buy supplies on behalf of the company. Often, the cards are co-branded with a specific retailer or fuel station, which limits the worker's ability to make purchases at that particular retailer. Many startup companies or big MNCs rely on commercial credit cards to help their employee to pay for their operating expenses. Commercial cards for businesses have their credit card numbers and can be used to make payments or to purchase any products and services. Companies can issue cards to their employees as a means of avoiding reimbursement processes and the need to approve each and every purchase made by their employees. There are numerous types of cards for businesses that are used by companies for their employees. Businesses and business owners must submit credit checks in order to obtain commercial credit cards. Commercial credit cards have lines of credit attached to them, and the card issuers may tack on exorbitant interest or yearly fees. When the cards are used, the money spent is deducted from the company's funds rather than added to the company's debt.
During the COVID-19 pandemic, businesses were forced to shut while some had to change their business model in order to survive the crisis. The COVID-19 pandemic fundamentally changed the way the people live and conduct business. At the onslaught of the initial lockdown in March 2020, business saw massive declines in spending. As business travel halted, credit card spending in the travel and entertainment categories declined as much as 73% from the first week of March to the first week in April 2020.
On the credit card portfolio, the market is witnessing an increase in B2B spending as businesses recover. The recovery, boosted by stimulus funding, focus a shift in spending on cards, especially the adoption of virtual cards. Today, businesses are witnessing the accelerating growth in corporate card usage, the rise of virtual cards for commercial payments and the integral role of these cards will play in the future of work. During the pandemic, the application volume for new commercial cards remained low, and many banks tightened their underwriting criteria. The environment early on was just too uncertain. However, after a year, the market is seeing an increase in commercial card applications and approved account volume in recent months proving there is greater confidence in the future and organizations are freeing up spending again.
These days’ shoppers have multiple ways to pay than ever before. Some of the primary payment methods include credit cards, debit cards, and cash. There are certain newer options available today; one of them is the commercial card. It is popular among consumers while offering small and growing businesses a wealth of benefits. This increasing use of commercial cards in e-commerce drives the growth of the US commercial cards market.
Some commercial cards usually involve features that benefit small businesses by automating various accounting and tracking functions. As transactions are made, some commercial cards for businesses can upload data into the company's accounting software. This can make expense tracking more accurate and error-free. Automatically uploading expenses can also make it easier to track spending across departments and provide individual departments with a better picture of how they are performing and spending. Some cards also enable business owners to restrict the items that can be purchased, at a times when the cards can be used, and the amount that can be spent per day, week, or month.
While all the advantages of a commercial cards make it a reliable solution, some factors need to be taken into account, which can hinder the market's growth. Depending on the business model and how many transactions the business makes each month, accepting credit card payments may be more costly than the business thinks. Cashless payments are becoming more common than other payment methods such as cash or personal check that are still accepted by some businesses. In addition to cash businesses, business-to-business revenue models may not benefit financially from credit card payments, such as infrequent high-dollar transactions and many more.
IoT is disrupting many industries and now it is also growing fast in the payment industry. The industry is trying to provide a frictionless experience to the customers. For years, the solution to decrease cash transactions for payment processing companies has been increasing the amount of credit, debit, and commercial cards. The networks (Mastercard, Visa, American Express, Discover being the main ones) work with card issuers like banks, credit card companies, and retailers to find new ways to get more cards to their customers. Now the new technology of IoT is increasingly being integrated with the cards to provide a more efficient experience to the customers, driving the market’s growth.
The integration of Internet of Things (IoT) devices is driving the development of advanced payments services. Device manufacturers and fintech are exploring ways to integrate IoT devices and payments to unlock new commerce and customer-business experiences. This integration will bring many benefits to key stakeholders in the payments industry and bring an opportunity for the commercial card market to grow.
The study categorizes the commercial cards market based on product type, card type, application at the regional and global levels.
By Product Type Outlook (Sales, USD Billion, 2019-2033)
By product type, segments are divides into purchase cards (p-cards) travel & entertainment (t&e) cards, business cards, gift cards and fleet & multi-use cards. Business Cards segment is expected to dominate the market for the forecasting period. There are many benefits to having a small business credit card, which are similar to those of a personal credit card. A business credit card is much easier to carry in one's wallet than to rely on a large sum of cash or a checkbook for purchases. Furter, the Fleet & Multi-Use Cards segment is expected to grow with the highest CAGR for the forecasting period. Fleet card can help the business or individual to manage, maintain, and control spending associated with these valuable assets. By this easy-to-use facility this segment will have the highest CAGR for the forecasting period.
Based on the regions, the global commercial cards market has been segmented across North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. North America will dominate the global commercial cards market in 2022. A major trend in the industry is the increased adoption of commercial cards by various buyers and suppliers as clients move away from physical checks in favor of electronic payments. In addition to digitalization's rising trend, the region's reputation for early adoption of new technologies contributes to market expansion in this specific region.
The Asia Pacific commercial card market is likely to grow at a highest CAGR for the forecasting period. A significant portion of growth in the commercial and corporate card market can be attributed to an increase in business travel spending in this region. Furthermore, in recent years, this region 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.
The global commercial cards market is highly competitive, with key market players adopting strategies such as partnerships, product development, acquisitions, collaboration, agreements, launch, and expansion to strengthen their market positions. Most market companies focus on expanding their operations across regions, augmenting their capabilities, and building strong partner relations.
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