The commercial payment card market has undergone a transformation in recent years as the associations and issuers strive to convince companies of the various benefits. Once a fairly simple market comprising travel and entertainment cards and fuel cards, the commercial payment card universe has become more complex with increased segmentation and functionality. But the lines between products have also blurred resulting in card products that combine several cards into one. Purchasing cards have emerged as the champion of commercial payments with the expectation of eventually replacing a substantial portion of paper-based procurement. The fact that commercial cards capture a mere fraction of total commercial payments highlights the potential of the opportunity at hand.
The financial crisis of 2008 that led to the economic meltdown in 2009 posed both a hurdle and an opportunity for the commercial payment card market. On the one hand, products such as small business cards suffered massive declines in purchase volume and skyrocketing charge-off rates. On the other hand, the consolidation of several major issuers and the weeding out of weaker players, combined with a new drive toward corporate cost control and efficiency, may have set the stage for a quick recovery in 2010.
This Packaged Facts report, which has been renamed from corporate credit cards, presents data and analysis on the global and U.S. market for commercial payment cards. The report presents the size and growth of the market by examining key metrics for the 2005-2009 period and providing forecasts through 2014. Included are discussions and analysis of the various commercial payment card types, trends and factors affecting their growth, and a focused analysis of commercial card end user demographics and preferences. In addition, major card brands and issuers are profiled to provide a competitive landscape.
Read an excerpt from this report below.Methodology
Packaged Facts’ study of commercial payment cards is based on extensive secondary research and interviews with industry and regional experts. Secondary sources include data-gathered from relevant trade, business, and government sources, including card industry journals, trade and general press (print and electronic), annual reports and 10(k) filings, company literature, consultancy publications, Packaged Facts reports, websites and white papers.
Packaged Facts’ analysis of consumer behavior and demographics derives from the spring 2009 Experian Simmons Market Research Bureau’s (New York, NY) adult consumer surveys, which are based on approximately 25,000 respondents age 18 or over.
What You’ll Get in this Report
Commercial Payment Cards makes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that Commercial Payment Cards offers.
Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.
How You Will Benefit from this Report
If your company is already doing business in the commercial payment card market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for commercial payment cards, as well as projected markets and trends through 2014.
This report will help:
Market Insights: A Selection From The Report
Purchasing, Fleet to Add Most Purchase Volume
By product, Packaged Facts expects the purchasing and fleet card category to be the hot spot, reaching $447 billion by 2014. Corporate card purchase volume will grow at an annual rate of six percent to reach $334 billion. Prepaid and benefit cards will likely continue to see higher growth rates, reaching the $150 billion mark by 2014. Finally, small business cards will show slower grow than the past at a CAGR of six percent to reach $579 billion.
Emerging Economies May Be Greatest Prospect for Commercial Cards
The United States will remain the single biggest economy providing opportunities in the commercial card payment space, especially when considering the penetration rate of commercial card payments versus paper and electronic forms is at about three percent in the United States. But with global commercial card payment volume estimated to be at just one percent of total global commercial consumption, it will be emerging economies that will provide the greatest growth prospects overall.
Charge-off Rates, Unemployment Go Sky High
Delinquency and charge-off rates along with unemployment took off in 2008 and headed skyward through the third quarter of 2009 with barely any sign of moderating. For the third quarter of 2009 unemployment stood at an average of 9.6% (9.8% in September 2009) while delinquencies and charge-offs were estimated by Packaged Facts to reach 6.9% and 10.8%, respectively. Among the big banks, Bank of America, one of the largest issuers of small business cards, posted the largest charge off rate of 14.25% for the third quarter of 2009.In the News
Commercial Payment Card Market to Rebound, Breach $1 Trillion in 2010
New York, November 18, 2009 — in 2010, according to leading market research publisher Packaged Facts in the recently released Commercial Payment Cards: The U.S. and Global Markets and Trends, 6th Edition.
Encouraging signs stem from numerous companies reporting better than estimated earnings and CEOs worldwide suggesting that the bottom has been seen and growth is expected in the quarter ahead. Packaged Facts forecasts total global commercial payment card purchase volume will grow 9% over the 2009 level of $917 billion to back above $1 trillion in 2010.
“This is not to say that 2010 will be a return of the heady days of years past, but assuming a bottom is in place and corporations continue to find new efficiencies to grow their bottom line, 2010 could be a fairly healthy year for the commercial card market,” says Don Montuori, publisher of Packaged Facts.
Growth will be driven by a corporate need to reduce costs and increase efficiencies through the adoption of card programs that can deliver on that promise, according to the report. It is also likely growth will be more from new commercial card clients rather than an expansion in purchasing volume from existing clients.
The United States will remain the single biggest economy providing opportunities in the commercial card payment space, especially when considering the penetration rate of commercial card payments versus paper and electronic forms is at about 3% in the U.S. But with global commercial card payment volume estimated to be just 1% of total global commercial consumption, it will be emerging economies that will provide the greatest growth prospects overall. In addition, markets outside the U.S., particularly markets in Asia, are expected to rebound with much more verve in 2010, according to the report.
Commercial Payment Cards: The U.S. and Global Markets and Trends, 6th Edition presents data and analysis on the global and U.S. market for commercial payment cards. The report presents the size and growth of the market by examining key metrics for the 2005-2009 period and providing forecasts through 2014. Included are discussions and analysis of the various commercial payment card types, trends and factors affecting their growth, and a focused analysis of commercial card end user demographics and preferences. Major card brands and issuers are profiled to provide a competitive landscape.
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