by The commercial card market refers to the electronic payment system used by businesses to manage corporate expenses and track employee spending. These cards enable real-time expense reporting, payment automation, enhanced security, and control over purchases by allocating dedicated credit limits for different departments and expense categories. They provide increased visibility into spending patterns for better budget management. Additionally, commercial cards offer cashback programs and exclusive rewards that maximize savings for companies while providing convenience to users. The transition to digital payments from paper-based expense tracking has gained significant traction post-pandemic as companies aim for improved spending oversight and fraud prevention.
The Global Commercial Card Market is estimated to be valued at US$ 5.3 Bn in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the commercial card market are ABB Ltd., Fuji Electric Co. Ltd., Havells India Ltd., Powell Industries, Mitsubishi Electric Corporation, CG Power and Industrial Solutions Limited, Schneider Electric, Hitachi Ltd., Siemens AG, Meidensha Corporation, Eaton Corporation PLC, and Toshiba International Corporation (Toshiba Corporation).
Key opportunities in the Commercial Or Corporate Card Market size include increasing adoption among small and medium enterprises to streamline business operations. Additionally, the growth of digital payment platforms acceptance globally is opening new revenue streams. Technological advancements such as integrated payment solutions, cloud-based expense management platforms, and artificial intelligence-based fraud detection are fueling adoption.
Market Drivers
The rise in digitization and automation among corporates for streamlining procurement and travel & entertainment spending is a key driver for commercial card adoption. They offer simplified expense tracking, reconciliation and payment methods in one interface. Additionally, the advantages of cashback programs and loyalty points are incentivizing companies to switch from traditional methods. The increasing number of partnerships between card issuers and digital payment platforms is further expanding outreach in untapped markets.
Current challenges in the commercial card market
The commercial card market is facing challenges due to the ongoing covid-19 pandemic. The movement restrictions and lockdowns impacted consumer spending and business travel significantly. This led to decreased demand for corporate credit cards in the short term. However, with vaccination drives and economic reopening, spending patterns are gradually returning to normal.
Another challenge for industry players is the growing preference for digital payments and mobile wallets among users. Younger consumers especially show low interest in using physical cards. Companies need to enhance their online platforms and presence to stay relevant. Offering value-added services like purchase protections can boost card acceptance.
SWOT Analysis
Strength: Established base of corporate cardholders among large businesses; Wide merchant acceptance globally.
Weakness: High set up and maintenance costs discourages SME adoption; Stiff competition from digital payment options.
Opportunity: Growing business spending in emerging markets like Asia Pacific and Middle East; Target small businesses and freelancers with customized offerings.
Threats: Stringent regulations on credit terms can squeeze profits; Data breaches raise security concerns among users.
Geographical regions
In terms of value, North America dominates the commercial card market with a share of over 35% globally. The presence of leading card networks and spend-heavy corporate sectors support its large size. Europe is the second largest region with rising penetration among small firms in western nations.
The Asia Pacific region offers strong growth prospects for commercial card providers. Countries like China, India and Indonesia contribute majorly to regional expansion aided by growing foreign investments and an increasing affluent middle class. Spending patterns here are evolving rapidly from cash to digital modes including corporate payment cards.
*Note:
1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.
