Corporate Cards Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Corporate Cards Category Overview

The corporate cards category is expected to grow at a CAGR of 7.3% from 2023 to 2030. There is a high degree of acceptance of corporate cards by merchants in developing countries. The rise in merchant acceptance is driven by the convenience of accepting payments through widely used network providers like Visa, MasterCard, Amex, etc. Additional factors driving industry growth include the switch to non-cash payments for better payment visibility, management, and working capital optimization as well as the development of flexible laws to reduce interchange costs. The European region accounts for the largest category share due to rising business trip costs and a growing preference for digital payment methods among businesses in this region.

This category has undergone some significant technological innovation phases that have facilitated the quick adoption of cutting-edge technologies like blockchain, AI, and fully automated systems. These technologies are transforming the payment space's structure and typical platform architectures.

• For instance, BitPesa, a Kenya-based startup utilized distributed ledger settlement in 2021, which enabled users to send and receive low-cost, nearly instantaneous payments even without a bank account or registered wallet. The company leveraged Blockchain, which allowed high transaction-per-second throughput and faster settlement than their current card-based systems. The technology is distributed; consensus-based, real-time transaction verification makes it very difficult to fraudulently utilize systems.

• In order to generate a distinctive biometric signature, Amazon Go launched a contactless identity service linking consumers' credit cards with palm prints in 2020. When paying in a store, customers could do so by simply placing their palm over an Amazon One device.

When IoT technologies and blockchain are combined, they will serve as decentralized credit card processing platforms. This combination has reduced the value of plastic cards, which encouraged the use of customer's digital IDs being a crucial part of payment execution.

Charges associated with this category are payment-processing fees, assessment fees, and interchange fees. Payment processing fees are the costs imposed on merchants for handling client credit cards and online payments. The preferred pricing model of the payment processor as well as the transaction’s level of risk determine the amount of payment processing fees. Assessment fees are frequently calculated as a percentage of the overall volume of transactions in a specified period. Interchange fees depend on the type of credit or debit card used, the card brand, the areas or jurisdictions, and the transaction type (online, in-person, etc.). The interchange fee assists in reducing the risk of fraud and handling expenses for the card issuer. For instance, a consumer makes a USD 100 purchase with a credit card. For that USD 100 item, the merchant would get approximately USD 97.81. The remaining USD 2.19 is divided up in the following way: USD 1.75 goes to the issuing bank (defined as an interchange fee), USD 0.14 goes to the card network processor (defined as an assessments fee), and USD 0.30 goes to a payment processor (defined as payment processing fee).

Other charges involved are acquirer processing fee (APF), fixed acquirer network fee (FANF), kilobyte access (KB) fee, network access and brand usage (NABU) fee, and negotiable fees (which consist of account fees, address verification system (AVS) fee, batch fee, chargeback fee, contract cancellation fee, hosting fee, IRS (internal revenue service) reporting fee, marked-up discount rate, minimum monthly processing fee, monthly fee, payment gateway fee, PCI (payment card industry) compliance fee, service fee, terminal lease fee, and wireless access fee). The threat of substitutes is expected to be medium in this category. There is less scope for new entrants to bring down the industry's dominant player and compete with the incumbents due to high capital and regulatory requirements, historic market dominance by huge enterprises, and major players who have a large customer base in the market. The major regions of North America and Europe such as the U.S., Canada, the U.K., Ireland, France, Germany, Spain, Italy, and Switzerland are the preferred business destinations to attract customers in this category. The use of card and card program maturity are high in these regions. 

A well-planned and effective negotiation strategy will be beneficial to provide businesses with better credit card fees and rates. One of the important negotiation strategies is to negotiate card-processing fees. It is crucial to understand the key players involved in finalizing processing fee rates. The banks, the credit card network, and the payment processor negotiate with each other to offset risks and split costs. The business and the customer have little say in credit card processing fees. Customers and businesses have limited control over credit card processing costs. However, before signing a contract and implementing a processing system, firms might try to negotiate and reduce the processing prices. Firms should request rates and fees that are less expensive than the ones businesses already pay. In fact, businesses need to make continuous requests for cheaper rates from the processing firm, bank, and any cloud software that is being used for online sales.

Corporate Cards Procurement Intelligence Report Scope