by Elizabeth Rowe
July 3, 2024
Commercial cards are being embedded in ERP systems to allow any authorized employee to make any authorized transaction digitally with virtual cards using cryptographic tokens.
ROCKVILLE MD, July 3, 2024 – Commercial cards have traditionally been allocated within companies to those who travel frequently and to those engaged in corporate purchasing. This compartmentalization and underusage of commercial payment cards is quickly vanishing.
The newly released Commercial Payment Cards, 13th Edition, finds that global commercial card volumes for the six largest international networks will reach $71.42 trillion in 2024, growing to $81.62 trillion by 2027. This volume is heavily skewed by UnionPay commercial card volumes, which when removed from the total, leaves the five remaining international commercial card networks with volume of $5.26 trillion in 2024, growing to $7.98 trillion by 2027
In the U.S., the largest payment networks are leveraging the power of real time payments and virtual cards to capture the $8.45 trillion of business checks written by U.S. businesses in 2023.
Commercial cards are being embedded in ERP systems to allow any authorized employee to make any authorized transaction digitally with virtual cards using cryptographic tokens confirming the user’s identity, pre-clearing each transaction for fraud prevention and capturing and relaying any transaction data the business wants. In seconds, those completed transactions can be automatically categorized and reconciled in the business’s ERP and the virtual cards deactivated.
Some software companies working with Visa, Mastercard or American Express are entering accounts payables/accounts receivables/spend management software from expertise they developed in specific lines of business. For instance, Corpay and WEX were the largest fleet card processors and have leveraged their expertise in complex data-driven transactions into spend management software.
Emburse was a travel expense software company which has broadened its market opportunity to process $90 billion in transactions for some of the U.S.’s largest companies. Emburse is American Express’s newest partner, embedding corporate payments into Emberse’s spend management software.
Real time payments are nascent with huge runways for growth. Can RTPs and merchants seeking good funds payments without card interchange fees topple commercial cards? No. Consumers and businesses are attached to payments cards and value their security, their chargeback capability, their 30-days float between a transaction and it being paid by the cardholder and rewards. RTPs will take as much as half of commercial payments card growth beginning in 2027 or 2028 but depending on the resourcefulness of commercial payments industry participants, that may be too generous an estimate.
Commercial Payment Cards, 13th Edition provides a comprehensive assessment of international and U.S.-based commercial payment networks, emerging trends, new players and new strategies in the payments sector. Competitive threats are assessed as are the newest payments and processing solutions driving future growth for the segment.
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