April 13, 2024

Commercial or Corporate Card Market is Estimated to Witness High Growth Owing to Technological Advancement in Digital Payments

The commercial card market enables businesses to manage their spending, reduce costs and automate payments. Commercial cards help businesses to easily track expenses and bill payments thereby improving cash flow management and reconciliation.

The Global Commercial or Corporate Card Market is estimated to be valued at US$ 5.3 Billion in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period between 2024 to 2031.

Key Takeaways

Key players operating in the Commercial Card Market Size are ABB Ltd., Fuji Electric Co. Ltd., Havells India Ltd., Powell Industries, Mitsubishi Electric Corporation, CG Power and Industrial Solutions Limited, Schneider Electric, Hitachi Ltd., Siemens AG, Meidensha Corporation, Eaton Corporation PLC, and Toshiba International Corporation (Toshiba Corporation). These players are focusing on developing digital payment solutions and launching innovative commercial card programs.

The increasing adoption of digital payments across industries along with technological advancements like mobile wallets provide significant growth opportunities in the commercial card market. Advanced digital platforms help businesses optimize payment workflows, manage expenses in real-time and offer enhanced security.

Digital payment technologies like contactless cards, mobile wallets and virtual cards are driving the adoption of commercial cards. They offer added security, automate payment processes and enable anytime, anywhere transactions through mobile devices. Technologies such as blockchain, AI and cloud are further enhancing the capabilities of commercial card solutions.

Market Drivers

The primary driver for the commercial card market is the need for automating enterprise payments and managing workforce expenditure more efficiently. Commercial cards help businesses reduce processing costs, accelerate payment cycles and improve cash flow. They offer comprehensive spending controls and oversight over business finances which is boosting their demand across large organizations. Digital innovations and the proliferation of online B2B transactions are further propelling the commercial card market growth.

Challenges in commercial or corporate card market

The commercial card market faces several challenges. One major challenge is the rising competition from fintech firms offering digital payment solutions. These digital solutions provide more convenience and flexibility to businesses compared to physical cards. Legacy infrastructure of many banks is also a challenge as it hinders quick adoption of new technologies. This allows nimble fintech players to gain an edge. Fraud is another concern in this market. With rise in online transactions, card details are more vulnerable to theft and misuse. Tighter security measures need to be implemented to tackle fraud risks. Adoption in certain global markets also poses difficulties due to lack of digital payment awareness and infrastructure. Additionally, economic uncertainties due to geo-political issues can negatively impact business spending and commercial card usage.

SWOT Analysis

Strength: Diversified product portfolio and established distribution networks of major players. Growing digitization and features like control & tracking of spending provide more control to businesses.

Weakness: High operating costs and legacy systems restrict quick innovation. Vulnerability to economic cycles makes revenues volatile.

Opportunity: Emergence of new digital payment technologies expands addressable market. Rise of SMEs and startup firms boosts demand. Partnerships with fintechs can drive efficiencies.

Threats: Stiff competition from fintech disrupters threatens market share of traditional players. Stringent regulations increase compliance costs. Data security breaches dent brand image and trust.

Geographical regions

In terms of value, the commercial card market is highly concentrated in North America and Europe. North America alone accounts for over 45% market share currently led by developed markets of US and Canada with high payment card penetration. Europe is another major revenue generator for players owing to robust economy and business activity in countries like UK, Germany, France etc.

The Asia Pacific region has emerged as the fastest growing commercial card market globally. Burgeoning SME sector, rising affluence, expanding digital payment infrastructure and promotional initiatives by card networks are fueling high double digit growth. China in particular presents substantial untapped potential with initiatives to modernize its commercial payments landscape. Latin America and Middle East & Africa also offer lucrative prospects for market expansion.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it