Commercial Payment Cards: The U.S. and Global Markets and Trends, 8th Edition

Published: March 2014
No. of Pages: 130
  

While U.S. consumer credit card spending may still be pressured, commercial card purchase volume is moving full steam ahead. According to Commercial Payment Cards: The U.S. and Global Markets and Trends, 8th Edition, a report by Packaged Facts, commercial card purchase volume grew by 13% in 2013, reaching $888 billion. But commercial cards are catching on in both the U.S. and abroad: we forecast global commercial card purchase volume to grow by 13% in 2014 and in 2015, rising from $1.4 trillion to $1.79 trillion, with both small businesses and larger corporations fueling growth.

The global landscape is quickly shifting, due in part to the quick ascension of UnionPay, which now generates more commercial card purchase volume than JCB, BC Card and Discover/Diner's Club—and surpassed Visa in 2013 as the largest network by credit and debit purchase volume. With globalization occurring at a rapid pace, payments networks and financial institutions—keen to meet the needs of multinational corporations and to penetrate new markets—are growing alongside the world's large corporations.

And U.S. commercial banks have worked hard to close the commercial payments gap with competitors such as American Express. Long the "Apple" of corporate payments, American Express can offer cards, service, solutions, and a network all under one roof. But U.S. commercial banks may be taking competition up a notch. Unlike Apple's competitors, which rely on outside operating software to run their machines, leading U.S. commercial banks can pick and choose, developing in-house proprietary solutions as well as drawing from Visa and/or MasterCard solutions—and tapping their unsurpassed global location reach. But American Express has come into 2014 swinging, keen to leveraging third-party merchant acquiring relationships via its OptBlue U.S. small merchant acquisition.

The basic impetus behind migrating to commercial cards remains cost savings. However, the industry is approaching that impetus with increasingly sophisticated solutions: With names like IntelliLink (Visa), SmartData (MasterCard), PAYVE (American Express) and Paymode-X (Bank of America), the industry has introduced some very enticing value propositions to their corporate clients, allowing them to leverage information, create process synergies, and control costs better than ever before. Gaining traction in the marketplace, these kinds of platforms are the real growth drivers behind the cards, and some no longer rely on physical cards at all.

Scope

This Packaged Facts report presents data and analysis on the global and U.S. market for commercial payment cards and the U.S. market for commercial electronic payments. Commercial Payment Cards: The U.S. and Global Markets and Trends, 8th Edition presents the size and growth of the market and related key metrics within the broader payment card arena. Included are discussions and analysis of the various card associations or networks, commercial payment card types, trends and factors affecting their growth, and a focused analysis of commercial card consumer demographics and preferences. In addition, major card brands and issuers are profiled with recent activity.

In particular, this report:

Provides a commercial card market size and forecast through 2015, with supporting analysis of global, U.S. and no-U.S. consumer and commercial purchase volume growth during 2010-2013. This includes volume share among the leading global networks: American Express; BC Card; Diner's Club; Discover; JCB; MasterCard; UnionPay and Visa. In the United States, we also distinguish between credit/charge volume and debit/prepaid volume by major network for 2013.

Analyzes American Express, Discover/Diner's Club, MasterCard and Visa commercial card operations, including growth strategies, card programs, electronic solution evolution, and U.S. and non-U.S. trends. We also provide 2010-2013 trending of American Express, MasterCard and Visa global, U.S. and non-U.S. commercial and consumer purchase volume. In addition, we provide small business volume estimates for these three networks, and (for Visa and MasterCard), the percentage of U.S. commercial spend attributable to credit cards and debit/prepaid cards.

Assesses the commercial card strategies of major U.S. commercial bank players, including Bank of America, Citibank, JPMorgan Chase and U.S. Bank, as well as commercial card processing giant Total System Services.

Analyzes the closed-loop commercial fleet card market and the closed loop airline/travel market, focusing on the strategies being employed by industry players such as Comdata Inc., FleetCor Technologies, Inc., MasterCard, U.S. Bank Voyager Fleet Systems Inc., WEX Inc., Universal Air Travel Plan, Inc. and AirPlus International.

Analyzes the U.S. government's contribution to commercial card growth, focusing on growth trends in its SmartPay charge card program. Spend and transactions are trends by contract holder (Citibank, JPMorgan Chase and U.S. Bank) as well as by purchase, fleet and travel spending categories.

Addresses trends shaping the commercial card industry, including globalization trends, analysis of UnionPay and JCB; data-driven analysis of purchase card usage and spending; and location acceptance issues.

Commercial Payment Cards: The U.S. and Global Markets and Trends, 8th Edition

Table Of Contents

Chapter 1: Executive Summary
Report Scope
Scope
Report Summary
Market size and forecast
Some global context
In the U.S. . . .
And outside of the U.S.
Commercial card growth drivers & trends
Global competition increases
Commercial cards making inroads
And purchase cards generate lots of spend
But not used prevalently
Make it easy
Accept me!
Commercial card network operators
American Express
Discover/Diner's Club
MasterCard
Visa
American Express, MasterCard and Visa commercial card value growth trends
Credit card/business credit card penetration by company size
Commercial card bank issuers and processors
Abroad, ho!
A growing plethora of electronic solutions
Moving into new verticals
A bit about the players
Commercial card non-bank issuers and processors
Closed-loop fleet cards
Comdata Inc.
Fleetcor Technologies, Inc.
Airline/travel
Commercial cards and government

Chapter 2: Introduction and Overview
Introduction to commercial payment market product categories and segments
Open-loop versus closed loop cards
Products and services out of scope

Chapter 3: Market Size and Forecast
Summary analysis
Overall card purchase volume
Commercial card purchase volume
Commercial card purchase volume market size & forecast
Table 3-1: Global Payment Card & Commercial Card Purchase Value: 2010-2015
Debit cards and prepaid cards
Table 3-2: U.S. Commercial Card Purchase Volume: Total, Credit/Charge & Debit/Prepaid, by Network Operator, 2013
Closed loop fleet cards
Global card purchase volume trends
Global card purchase volume grows 72% during 2010-2013
UnionPay takes global lead
Table 3-3: Global Card Purchase Value/Value Share, by Network Operator: 2010-13
Global commercial card purchase volume trends
Commercial card share
Table 3-4: Global Commercial Card Purchase Value & Share of Global Card Purchase Value, 2010-13
Visa, American Express and MasterCard maintain volume leadership
Table 3-5: Global Commercial Card Purchase Value/Value Share, by Network Operator: 2010-13
U.S. card purchase volume trends
Table 3-6: U.S. Card Purchase Value & Global Market Share, 2010-13
Table 3-7: Commercial Card Purchase Value: Global, U.S. & Non-U.S., 2010-13
Visa maintains lead
Table 3-8: U.S. Card Purchase Value/Value Share, by Network Operator: 2010-13
Table 3-9: U.S. Commercial Card Purchase Value/Value Share, by Network Operator: 2010-13
Non-U.S. card purchase volume trends
Table 3-10: Non-U.S. Card Purchase Value/Value Share, by Network Operator: 2010-13
Non-U.S. commercial card purchase volume trends
Table 3-11: Non-U.S. Commercial Card Purchase Value/Value Share, by Network Operator: 2010-13

Chapter 4: Commercial Card Growth Drivers & Trends
Summary analysis
Going global, global, global
Europe
And facing global competition
UnionPay
Mirroring Chinese market growth
And maintaining domestic market dominance
While expanding abroad
By the numbers
Table 4-1: UnionPay Global Consumer and Commercial Card Purchase Volume, 2009-2013
JCB
Table 4-2: JCB Global Consumer and Commercial Card Dollar Volume, 2009-2013
Driving commercial card uptake
Cost savings
Cards still a sliver of the payments pie
Table 4-3: Percent of Payments Made by Corporations, 2013
Purchasing cards
Non-plastic purchasing card accounts
Middle market provides purchasing card opportunity
Table 4-4: Usage of Payment Types by Corporations, by Corporation Revenue, 2013
Purchasing card use is relatively widespread
But not used with much frequency
Table 4-5: Payment Method Used to Pay Major Suppliers, by Transaction Share, 2013
Convenience and ease
Accept me!
Drilling into new spend categories
Adapting to and harnessing technology
RFID on the horizon

Chapter 5: Commercial Card Network Operators
Summary analysis
American Express
Discover/Diner's Club
MasterCard
Visa
Comparing cards
American Express
Value proposition
Special services and programs abound
Commercial card operating segments and customer bases
Charge!
Graph 5-1: American Express Global Credit Card & Charge Card Spend: Consumer, Small Business, and
Corporate Spend, 2013
International proprietary small business
Commercial growth via network partnerships
Global Commercial Services
Corporate card programs
American Express Corporate Card
Online management tools
Savings at Work
Membership Rewards
Business-to-business payment solutions
Corporate Purchasing Card
vPayment
PAYVE and buyer initiated payments
American Express Global Business Travel
Commercial card performance and growth trends
B2B emphasis
Small business growth continues
While corporate growth slows
GNS partnerships flourish
Targeting educational institutions
Technology partnerships and acquisitions
International expansion
American Express consumer and commercial card value growth trends
Global trends
Table 5-1: American Express Global Consumer & Commercial Card Value: 2010-2013
Graph 5-2: American Express Global Consumer & Commercial Card Value: 2010-2013
Non-U.S. trends
Table 5-2: American Express Non-U.S. Consumer & Commercial Card Value: 2010-2013
Graph 5-3: American Express Non-U.S. Consumer & Commercial Card Value: 2010-2013
U.S. trends
Table 5-3: American Express U.S. Consumer & Commercial Card Value: 2010-2013
Graph 5-4: American Express U.S. Consumer & Commercial Card Value: 2010-2013
U.S. commercial trends, by business type
Table 5-4: American Express U.S. Commercial Card Value, by Business Type: 2010-2013
Graph 5-5: American Express U.S. Commercial Card Value, by Business Type: 2010-2013
Discover Financial Services, Inc.
Diner's Club provides international reach
MasterCard
Commercial payment solutions
Commercial card strategy
Leveraging the location advantage
Direct-to-corporate sales strategy
Unleashing MasterCard Smart Data
Tapping MasterCard Advisors
The art and timing of the cross-sell
Small business strategy
An integrated approach
MasterCard Business Network: negotiating strength for small business
MasterCard consumer and commercial card value growth trends
Global trends
Table 5-5: MasterCard Global Consumer & Commercial Purchase Volume: 2010-2013
Graph 5-6: MasterCard Global Consumer & Commercial Card Purchase Volume: 2010-2013
Non-U.S. trends
Chipping away at China
Elsewhere abroad
Table 5-6: MasterCard Non-U.S. Consumer & Commercial Card Purchase Volume: 2010-2013
Graph 5-7: MasterCard Non-U.S. Consumer & Commercial Card Purchase Volume: 2010-2013
U.S. trends
Consumer credit emerging from doldrums
Chase relationship a boon and a bane
Other commercial contract wins
Table 5-7: MasterCard U.S. Consumer & Commercial Card Purchase Volume: 2010-2013
Graph 5-8: MasterCard U.S. Consumer & Commercial Card Purchase Volume 2010-2013
Commercial credit card versus commercial debit/prepaid
Table 5-8: MasterCard U.S. Consumer & Commercial Card Purchase Volume: Credit vs. Debit, 2010-2013
Visa
Commercial payment solutions
Small business
Credit card issuer signings strengthen Visa's U.S. consumer credit card position
Medium-sized and large businesses
Scratching the surface: the cards
Beneath the surface: harnessing data, simplifying the process and growing payment spend
IntelliLink
PerformSource
Visa Payables Automation
The CyberSource connection
Syncada
Industry vertical solutions
Visa consumer and commercial card value growth trends
Global trends
Table 5-9: Visa Global Consumer & Commercial Card Value, 2010-2013
Graph 5-9: Visa Global Consumer & Commercial Card Value, 2010-2013
Non-U.S. trends
Table 5-10: Visa Non-U.S. Consumer & Commercial Card Value, 2010-2013
Graph 5-10: Visa Non-U.S. Consumer & Commercial Card Value, 2010-2013
U.S. trends
Table 5-11: Visa U.S. Consumer & Commercial Card Value, 2010-2013
Graph 5-11: Visa U.S. Consumer & Commercial Card Value, 2010-2013
Commercial credit card versus commercial debit/prepaid
Table 5-12: Visa U.S. Consumer & Commercial Card Value: Credit vs. Debit, 2010-2013
Credit card/business credit card penetration by company size
Visa, MasterCard & American Express
Table 5-13: Consumer & Business Credit Card Usage Penetration, 2013
Table 5-14: Consumer & Business Credit Card Usage Penetration, 2013

Chapter 6: Commercial Card Bank Issuers & Processors
Summary analysis
Bank of America Merrill Lynch
U.S. presence
International scope
Commercial card solutions
Table 6-1: Bank of America Merrill Lynch Card Solutions, 2013
Comprehensive Payables
Paymode-X and ePayables
Works
Enhancements and expansion
Citibank/ Citi Commercial Cards
Expansion and enhancements
Product rollouts
International growth
Well positioned in China
Latin America gets global issuing platform
JP Morgan Chase/Chase Commercial Banking
Products & Capabilities
Cards
Electronic solutions
New partnerships
Total System Services, Inc.
Commercial card scope and growth
Table 6-2: Total System Services: Consumer, Commercial, Government & Prepaid Accounts, 2011-2013
U.S. Bank
Commercial card solutions
Electronic solutions
Healthcare
Fuel solutions

Chapter 7: Commercial Card Non-Bank Issuers
Summary analysis
Fleet cards
Market size
Expansion and enhancements
Fleetcor Technologies, Inc.
Table 7-1: FleetCor U.S. & International Networks and Network Locations, 2013
Acquisitions build volume and strengthen product portfolio
WEX Inc.
Fleet cards
Virtual and prepaid cards
Acquisitions
Airline/travel
Universal Air Travel Plan
AirPlus International

Chapter 8: Commercial Cards and Government
Summary analysis
Thank you, Uncle Sam!
SmartPay
GSA charge card issuers: Citibank, JPMorgan Chase, and U.S. Bank
SmartPay spend on decline
Table 8-1: GSA SmartPay Program Spend and Transaction Volume: Fleet, Purchase, Travel, 2009-2013
U.S. Bank contract generates 60% of SmartPay fleet volume
Table 8-2: GSA SmartPay Fleet Card Spend and Transaction Volume: Citibank, JPMorgan Chase and U.S.
Bank, 2009-2013
U.S. Bank cards generate 60% of SmartPay fleet volume
Table 8-3: GSA SmartPay Purchase Card Spend and Transaction Volume: Citibank, JPMorgan Chase and U.S.
Bank, 2009-2013
Citibank contract generates three-quarters of travel volume spend
Table 8-4: GSA SmartPay Travel Card Spend and Transaction Volume: Citibank, JPMorgan Chase and U.S.
Bank, 2009-2013
Table 8-5: GSA SmartPay Spend and Transaction Volume: Department of Interior, 2009-2013
Appendix
Methodology
Consumer survey methodology
Market size methodology
Volume estimates
End users included
Volume not included
Other
Sources
Abbreviations

Published By: Packaged Facts
Product Code: Packaged Facts154


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