The commercial card market allows businesses to manage expenses in a centralized and efficient way. Commercial cards streamline the payment process, provide visibility into corporate spending, and offer rewards and incentives for businesses who leverage such cards. They help businesses better manage spending by automating bill payments, tracking expenses in real-time, and offering detailed reporting. By eliminating paper-based processes and late payment fees, commercial cards save businesses both time and money.
The Global Commercial or Corporate Card Market is estimated to be valued at US$ 5.3 Billion in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period between 2024 to 2031.
Rising corporate spending, digitization of business processes, and need for automated expense management are some of the key factors fueling demand for commercial cards. Commercial cards provide an easier alternative to traditional expense management methods for businesses of all sizes.
Key Takeaways
Key players operating in the Commercial Card Market Size include 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). These players are focusing on developing innovative product offerings and leveraging new technologies to gain a competitive edge in the market.
The commercial card market provides significant growth opportunities for issuers, processors, and other service providers. The landscape is gradually shifting from basic cards to customized solutions tailored for specific industry needs. Emerging technologies are also enabling new functionalities like virtual cards, instant virtual account numbers, and enhanced analytics. This is expanding the potential scope for commercial card providers.
Globally, the commercial card market is witnessing increased adoption across developing regions with rapid industrialization and economic development. Asia Pacific especially presents substantial untapped potential with rising corporate spending power. Leading players are strengthening their presence through partnerships with local banks and fintech companies to capitalize on high-growth opportunities in developing economies.
Market drivers:
- Rising corporate expenditure: Growing business activities and expenses are driving demand for optimized expense management solutions like commercial cards.
- Enhanced functionalities: Innovations enabling new features around virtual payments, advanced analytics and reporting are propelling adoption.
Market restraints:
- Security risks: Commercial cards need robust security measures to address the rising threats of payment fraud and data theft. This increases compliance costs for issuers.
- Lack of digital skills: The lack of digital literacy and skills among small enterprises poses challenges for mass adoption of commercial card solutions.
Segment Analysis
In this commercial card market, corporate purchasing cards account for the largest segment, dominating around 60% of the total market share. Corporate purchasing cards are credit cards issued to employees of a company for work-related and business expenses. It allows businesses to manage expenses better through consolidated reporting and eliminate out-of-pocket costs. Major benefits of corporate purchasing cards like enhanced control over spending, improved vendor management and discounts from card networks make it the most preferred commercial card among large organizations.
Global Analysis
The North America region holds the highest share in the commercial card market currently with the United States being the key contributor. High preference of digital payments and early adoption of advanced financial technologies among corporates in the US have accelerated the usage of commercial cards in this region. Europe is also one of the major commercial card markets globally, supported by regulations pushing electronic payments. However, over the forecast period, the Asia Pacific region is expected to witness the highest growth rate owing to rapid digitalization, economic development and expansion of SMEs in countries like China and India promoting greater commercial card acceptance.
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