Commercial or Corporate Card Market Poised to Witness Rampant Growth Due to High Spending by Large Corporates
Commercial or Corporate Card Market Poised to Witness Rampant Growth Due to High Spending by Large Corporates
The commercial or corporate card market are special credit or procurement cards that organizations issue to employees for business-related expenses.

Commercial or Corporate Card Market Poised to Witness Rampant Growth Due to High Spending by Large Corporates

They help businesses track expenses by individuals or departments, automate expense reporting, and offer special rewards programs which reduce costs. The corporate cards provide enhanced control over expenditure and convenience by eliminating the need for cash advances or personal credit cards for official spending. With increased digitalization and need for transparent tracking of finances, corporate cards are becoming an integral part of financial management systems for large corporations worldwide.

The global commercial or corporate card market is estimated to be valued at US$ 5.3 Bn in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period of 2024 to 2031.

Key Takeaways

Key players operating in the commercial or corporate card market 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 expanding their product portfolios and global footprint to gain a competitive advantage in the market.

The key opportunities in the Commercial Or Corporate Card Market size  include greater penetration in small and medium enterprises, partnerships with financial institutions and fintech players to launch new card programs, and development of value-added services around corporate cards like expense tracking tools, reward programs, payment tracking etc.

On the global expansion front, commercial card providers are eyeing opportunities in rapidly growing emerging economies of Asia Pacific and Latin America through strategic acquisitions and collaborations with local banks to expand acceptance network and launch customized card programs.

Market Drivers
The primary driver for the commercial or corporate card market is the high spending by large corporations on official travel, purchases and other business expenses. As corporate spending grows globally, there is a need for centralized control and transparency which corporate cards provide. Simplification of expenses also allows for greater focus on core operations.

Market Restraints
Major restraint is the initial setup and operating costs for issuers to comply with regulatory requirements in different countries and launch new card programs. Ongoing costs of customer acquisition, issuing and managing large card portfolios also impact margins. Data security is another challenge due to the sensitive financial information handled for client corporations.

Segment Analysis:
The commercial or corporate card market can be segmented on the basis of product type, technology, application, and geography. The product type segment include purchase cards, corporate travel & entertainment cards, and others. Among these, the purchase cards segment dominated the market in 2020 with nearly 50% share as they offer ease of reconciling expenses with statement data and billings. This helps in optimizing business spends and saves time and cost for corporate entities.

Global Analysis:
Geographically, the commercial or corporate card market is segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa. The North America region dominated the market in 2020 with around 35% share of the total market. This is attributed to presence of majority of corporate card issuers and tech companies in countries like U.S. and Canada. Also, higher penetration of digitization and cashless transactions fuel regional market growth. The Asia Pacific region is anticipated to witness fastest growth during forecast period 2021-2028. This is owing to rapid industrialization, rising disposable income, and growth of SMEs in developing countries like China and India.

Get more insights on This Topic- Commercial Or Corporate Card Market

disclaimer

What's your reaction?

Comments

https://timessquarereporter.com/public/assets/images/user-avatar-s.jpg

0 comment

Write the first comment for this!

Facebook Conversations