Mercator Blog

Partnership Activity Across Commercial Cards Is Accelerating
Date: September 11, 2017
Steve Murphy
Director, Commercial and Enterprise Payments Advisory Service
The credit card industry has over time created what can reasonably be described as the only true real-time global payment network. One might argue that money transfer networks are global and operate in near real time, but from a commercial standpoint, cards networks are unique in the global payments space. A consumer or a corporate buyer (e.g., an employee who is traveling, a procurement specialist, or a payables professional) can execute a payment request to a supplier/merchant from and to anywhere cards are accepted across the globe, and the merchant then gains authorization and clearance for the transaction in just a few seconds, allowing for immediate service provision. It all sounds relatively simple, but the infrastructure, software, and services forming the foundation of this reliable payment network are anything but simple. The end-to-end execution involves numerous systems and often dozens of cross-network participants in order to complete a single transaction.

During the past 10 years, there has been a concerted effort on the part of the commercial cards industry to gain a stronger foothold in the business payments space, most specifically business-to-business (B2B) payables. Purchasing cards (P cards) have served and continue to serve their purpose for business and government procurement, but now gaining moderate spending growth in the global business supply chain are cards-related digital payments tools, payables being the golden nugget for the industry in B2B.

The report, Complex Business Relationships Drive the Commercial Cards Industry, identifies the complex list of participants across the cards network delivery ecosystem. Readers can clearly understand the level of systems and service cooperation (indeed partnerships) between numerous business entities to create a seamless experience for all parties in using a credit card for payment. We then explore some of the more recent developments with regard to technology advancements and the changing or expanding roles of traditional players as a result of these advancements. We also detail the movement toward broader payables offerings, involving nontraditional players and partnerships in an ever-adapting industry ecosystem.