by The Commercial or Corporate Card Market is estimated to be valued at US$ 26.3 billion in 2017 and is expected to exhibit a CAGR of 7.3% over the forecast period 2023 – 2030, as highlighted in a new report published by Coherent Market Insights. Corporate cards are payment cards issued by companies to their employees for business-related expenses. These cards provide convenience, transparency, and control over corporate spending, making them an essential tool for businesses.
Market key trends: Increasing Focus on Digital Payment Solutions
One of the key trends in the commercial or Corporate Card market is the growing focus on digital payment solutions. With the rise in technology and online transactions, companies are increasingly adopting digital solutions for their payment needs. Digital corporate cards enable businesses to streamline their payment processes, improve efficiency, and enhance security. These cards offer features like virtual cards and mobile payment options, providing convenience and flexibility to employees.
Moreover, digital payment solutions also offer real-time expense tracking and reporting, helping companies to manage their expenses more effectively. As a result, the adoption of digital corporate cards is expected to witness significant growth in the coming years. Key players in the market include AirPlus International Ltd., Amazon.com, Inc., American Express Company, Bank of America Corporation, Citigroup, Inc., JP Morgan Chase & Co. Inc., U.S. Bancorp, Wex Inc., Wells Fargo & Company, Corporate Spending Innovations Enterprises, Inc., NGC US, LLC, and Bank of China Limited.
Porter’s Analysis:
Threat of new entrants: The threat of new entrants in the commercial or corporate card market is relatively low. The market is dominated by established players who have strong brand recognition, extensive networks, and a deep understanding of the industry. Additionally, new entrants would face significant barriers to entry such as high capital requirements and the need to develop relationships with banks and financial institutions, which further reduces the likelihood of new competition.
Bargaining power of buyers: The bargaining power of buyers in this market is moderate. While buyers have the option to choose among multiple card providers, the switching costs associated with changing providers can be high. Moreover, commercial card programs often involve complex negotiations and customization based on specific company needs, giving buyers some leverage in obtaining favorable pricing and terms.
Bargaining power of suppliers: The bargaining power of suppliers in the commercial card market is relatively high. Suppliers, in this case, are the banks and financial institutions that issue the cards to customers. These institutions have strong relationships with corporate clients and can exert influence over the terms and conditions of the cards they offer. This bargaining power allows suppliers to maintain profitability and negotiate favorable agreements with issuers.
Threat of new substitutes: The threat of new substitutes in the commercial card market is relatively low. Traditional payment methods such as checks and wire transfers are being gradually replaced by commercial cards due to their convenience, enhanced security features, and potential for cost savings. Moreover, the integration of new technologies such as mobile payments and digital wallets further strengthens the position of commercial cards as the preferred payment solution for businesses.
Competitive rivalry: The competitive rivalry in the commercial card market is high. The market is characterized by intense competition among key players who strive to differentiate their offerings through customized solutions, enhanced security features, and value-added services. Moreover, the market is witnessing the entry of non-traditional players such as technology companies and fintech startups, which further intensifies the competitive landscape.
Key Takeaways:
The global commercial or corporate card market is expected to witness high growth, exhibiting a CAGR of 7.3% over the forecast period. This growth can be attributed to several factors, including the increasing adoption of digital payment solutions by businesses, the need for greater control and visibility over corporate spending, and the rise of e-commerce and online transactions.
In terms of regional analysis, North America is the fastest-growing and dominating region in the commercial card market. The region has a well-established financial infrastructure, a large number of corporate clients, and a high level of technological advancement, all of which contribute to the growth of the market. Additionally, the presence of major card issuers and financial institutions in North America further strengthens its position in the market.
Key players operating in the commercial or corporate card market include AirPlus International Ltd., Amazon.com, Inc., American Express Company, Bank of America Corporation, Citigroup, Inc., JP Morgan Chase & Co. Inc., U.S. Bancorp, Wex Inc., Wells Fargo & Company, Corporate Spending Innovations Enterprises, Inc., NGC US, LLC, and Bank of China Limited. These key players have a strong market presence, extensive customer base, and a wide range of card offerings, positioning them as leaders in the industry.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
