The author has covered the commercial credit card space extensively during the past several years and has found that, in the absence of either strong increases in gross domestic product or major economic disruptions, the overall growth of U.S.-based spending on these card products for the past several years has been quite steady at near double digits. While the commercial card industry continues to benefit from an ongoing shift to electronic payments and a general increase in purchase volume, vast opportunities for growth still exist.
In a new research report, U.S. Commercial Cards: The Drive Toward Mainstream Payables, the author examines a number of critical factors in the state of the U.S. commercial card market, including market size, changing dynamics, emerging trends, and the challenges around accelerating B2B spend share for cards. The report describes the growth scenario in the U.S. market, discussing trends, technology dynamics, and opportunities presenting themselves over the next five years.
"The exchange of goods and services between businesses requires payment in one way, shape, or form. Most often the terms are based on trade credit, and payments are executed after the fact (post shipment or post delivery) via an invoiced request. The combination of all these and other business payment transactions across the globe is estimated to be somewhere in excess of $120 trillion annually," commented Steve Murphy, Director of Commercial and Enterprise Payments Advisory Service and author of the report. "The critical factor for commercial cards is to gain a faster rate of growth in share of business-to-business (B2B) payables during the next five years, as the changing e-payments environment presents easier and faster alternatives to paper-based solutions."
Highlights of the report include:
- A detailed review of where mid-to-large market commercial card-based spending volumes fit within the B2B payments market
- Overall and individual product-level spending estimates and growth forecasts for 2014-2020
- Estimated branded network share in the 2014-2016 timeframe
- Detailed analysis of the growth possibilities through expected check-based spending shifts over the next five years
- Major trends and issues facing the industry.
1. Executive Summary
3. It’s All About Payables
- The B2B Market
- Opportunity Knocks for Commercial Cards
- Grabbing More Share of the Available Check Spend Shift
4. A Look at the U.S. Numbers
- Commercial Credit Card Growth and Distribution
- Branded Networks
5. Reduced Friction as a Growth Engine
- Enablement Challenges
- Volume Matters More Than Rate
6. Trends and Considerations
- Latest Technology Impact
- Alternative Payments Systems
List of Figures
Figure 1: P-Card Spend as a Percentage of Electronic B2B Payments, 2016
Figure 2: Taking Incremental B2B Share from Checks Produces Vast Opportunity
Figure 3: U.S. Commercial Card Purchase Volume Estimates by Product Type, 2014-2020
Figure 4: U.S. Commercial Card Purchase Volumes by Product Type, 2014E-2020F
Figure 5: U.S. Commercial Card Percentage Share by Network, 2014E-2016E
Figure 6: Virtual Card Spend Growth Related to Reduced Friction for Suppliers
Figure 7: Effect of Volume Scale on Revenue, Rebates, and Supplier Acceptance (Illustrative)