International Markets for Commercial Cards Remain a Good Business
The major regional commercial credit card markets outside of North America continue to grow, although the pace varies depending on location and product. Mercator Advisory Group defines commercial credit cards as those serving the mid- to large-market segments. The base growth is underpinned by corporate cards (mostly travel and entertainment, or T&E), which have been the general foundation of commercial card programs as they expanded from the United States during the past 15 years. The world continues to move in the direction of electronic payments, a movement that represents ongoing opportunity for card schemes. Although companies widely persist in using check-based payments, this usage is trending down in all markets. Companies across the globe seek more efficiencies and value from business-to-business (B2B) invoiced payments, which card schemes can provide through credit facilities, potential revenue share, and “risk-minimized” virtual card accounts. While economic activity is expected to continue at a tepid pace in developed economies (see Figure 1 for an overview), there is some optimism in Latin America (LAC) and robust growth across the Asia-Pacific region helping to fuel the business travel market, where companies also seek control, analytical data access, and spending discipline, all of which can be provided through corporate card programs. There remain headwinds in the form of regulations, as well as longer-term potential threats from new payment schemes, but the general outlook for commercial cards is strong through the end of the decade. In this research report, Mercator reviews commercial card results, trends, and issues in the eurozone (Western Europe) and Asia-Pacific regional markets and presents a brief summary of remaining markets outside of North America. This report does not include the small to medium-sized enterprise (SME) market nor does it include specialty cards such as fleet.
In a research report, Commercial Cards Global Markets: Travel and Virtual Accounts Driving Growth, Mercator Advisory Group discusses the key trends impacting growth of commercial cards outside of North America, where the U.S. market has always been relatively robust. Business travel and regional growth combined with adoption of digital technology is helping to create opportunities for banks and their clients to find more effective methods to improve collections cash flow through payments processing efficiencies. This report presents Mercator Advisory Group’s review of commercial card results, trends, and issues in the eurozone (Western Europe) and Asia-Pacific regional markets.