The steady increase in U.S. commercial credit card spend continued in 2018, driven by a combination of factors, including growth in noncash payments , a reasonably strong economy, and what we believe to be an accelerating trend away from paper toward digital cash cycle solutions.

Mercator Advisory Group covers all versions of the commercial card product array, so to be clear and consistent, this particular report is a continuation of past reports in trends and spending for commercial credit cards in the mid-to-large corporate segments, which includes companies with annual sales turnover of greater than $10 million, as well as the national, state, and certain municipal government markets. The commercial credit card products include traditional corporate and purchasing cards (P cards) as well as virtual card accounts. We do not discuss fleet (fuel) cards, commercial prepaid or debit cards, or business cards (also referred to as small business cards). Research reports on the small business card market can be accessed in Mercator Advisory Group’s Credit Advisory Service and Mercator’s Small Business Payments and Banking Survey series. For a list of Mercator research analyzing other types of commercial cards not contained in the present report, see the References section at the end of the report, which has hyperlinks to the documents on the Mercator website.

Global business travel is estimated to have been near $1.4 trillion during 2018, with annualized growth projections through 2023 for North America at 4.1% (reaching $355 billion) for the United States and 5.1% (reaching $26.4 billion) for Canada. U.S. Bureau of Economic Activity (BEA) measurements found general U.S. economic activity during 2018 increased by about 25% from the prior year, with real GDP at 2.9%. For the next couple of years, growth is expected to decelerate into the 2% range as a consequence of various trade concerns. Canada’s $1.7 trillion economy saw 1.9% growth in 2018 and is expected to remain in that range for the next two years. Mercator Advisory Group continues to estimate growth of B2B payments overall in the 4% range, with electronic payments gaining about 7% per annum from the shift from paper checks.

In past Mercator Advisory Group research reports, including U.S. Commercial Credit Cards Forecast, 2016 -2022: Growing at a Healthy Pace, released in October 2018, we have discussed why it is critical for the commercial credit card industry to gain share of B2B payables spend at a faster rate during the next five years as the changing e-payments environment presents easier and faster alternatives to paper-based solutions. We cover the most recent developments in the present report.

According to Mercator’s estimates, in 2018 the U.S. commercial credit card spend volume for mid-to-large corporates reached $553.9 billion, which represents year-over-year growth of approximately 9.8%, driven by virtual card spend and somewhat higher than expected purchasing card growth. The industry continues to move ahead with technology improvements and better customer experiences, and we foresee a high growth upside for the next several years. The report, Commercial Credit Cards North America, 2017–2023: Growth and Change Continue, covers the state of the U.S. commercial card market, including market size and various other factors impacting the space. For the first time we also include a high-level review of the Canadian commercial card market starting in 2018 and with spend projected through 2023.