B2B Payments

A Terrible Week, But Only For Payroll Cards

New analysis shows that the commercial card market is on the up thanks to rising p-card and T&E spend. The latest news from WEX and MasterCard, among others, suggests that analysis is correct, and signals a strong market for fleet cards and the virtualization of commercial cards.

But there’s one type of corporate card product that is having a terrible time: the payroll card. You can thank RushCard for that.

PYMNTS breaks down what’s going on in the commercial, fleet, T&E and payroll card worlds below.

A Stronger Market

The market is looking up for commercial cards, according to the latest analysis from Mercator Advisory Group. The firm released research on the U.S. commercial credit card market last week and found evidence that purchasing card volumes and T&E spending will see growth in the near future.

According to Mercator’s Director of Commercial and Enterprise Payments Advisory Service Richard A. Hall, the analysis signals good news for corporate payment practices.

“The underlying elements of the U.S. commercial card market remains strong as a key component of corporate payable strategies,” said Hall, who also authored the report. “Despite the challenges to make significant impacts to often large and complex programs, the environment remains positive for stakeholders in the commercial card arena. At the same time, these stakeholders must take a serious look at not just their product offerings but create new forms of value to take advantage of this opportunity.” 

[bctt tweet="'The environment remains positive for stakeholders in the commercial card arena'"]

WEX Gives Fleet A Good Name

Fleet card leader WEX, slated to release its quarterly earnings report next week, scored some of the top commercial card headlines in the past week thanks a couple deals. The first sees the company working with CST Canada to expand acceptance of WEX’s Universal Fleet Card across the firm’s 800 fuel stations.

But the second led to even more chatter about the fleet card firm. WEX announced Monday (Oct. 19) that it reached a $1.1 billion deal to acquire Electronic Funds Source, another fleet card issuing company. 

Corporate Cards Go Virtual For T&E

A lot is happening in the world of corporate travel today, and the increasing adoption of virtual card technology to manage corporate travel spend is stealing the spotlight.

The MasterCard Bump

MasterCard is largely facilitating the digital shift of commercial cards in a new initiative announced last week that sees the credit card firm providing tokenization services for commercial card issuers to allow business users to load those cards onto digital wallets.

[bctt tweet="MasterCard is largely facilitating the digital shift of commercial cards"]

Reports said Wednesday (Oct. 14) that the MasterCard Digital Enablement Service will make corporate travel spending easier for business clients.

“Digitizing commercial payments will help make business travel even more convenient without sacrificing any of the core controls and value,” said Sachin Mehra, executive vice president of Global Commercial Products at MasterCard, in a statement.

Hoteliers Get Prepared

The corporate travel industry is well aware of this virtual card upswing. Last week, the Hotel Electronic Distribution Network Association (HEDNA) along with Hotel Technology Next Generation released a best practices guide for the hotel industry’s use of virtual card technology.

"Virtual Payment Cards: A Handbook For Hoteliers" provides guidance on how to handle virtual cards, develop policies around the payments technology, work with distribution partners and get up-to-speed as more corporations use virtual cards to book employee stays.

“Recent growth in virtual payment card usage has amplified the industry’s need for operational guidelines and a solution to the current data limitations relating to virtual payments,” said HEDNA Board Member and Chairman of the group’s Payments Forum David Cabreza in a statement.

Diners Club Makes The Shift, Too

The mainstay of corporate cards, the Diners Club card, is getting a modern makeover thanks to virtualization, too. Reports in Gadget last week said the card issuer will now provide the Diners Club Virtual Card in South Africa. Aimed at corporate travelers, the card assures compliance with National Treasury rules on corporate expensing.

Reports said that the solution looks to fill a gap for business travelers that often have to use their personal cards and expense those costs out to their companies while on a business trip. It will also provide businesses with an added layer of protection to safeguard against fraud and rogue employee spending, according to the firm’s South Africa Managing Director Ebrahim Matthews.

Russell Simmons’ Paycard Slipup

The commercial card market is headed for growth, businesses are driving the virtualization of their card products  — an evolution just given a big bump by one of the biggest names in cards: MasterCard — and WEX’s news seems to signal a healthy fleet card market.

What’s the one area of commercial cards that struggled last week? Payroll cards, of course.

The commercial card product, which has seen its fair share of controversy and legal troubles in the last few weeks, added another notch to its notoriety as users of the Russell Simmons-owned RushCard prepaid card were left without their paychecks.

[bctt tweet="Users of the Russell Simmons-owned RushCard prepaid card left without their paychecks"]

In what Simmons and the company described as technical glitch, RushCard was unable to provide users with their money; reports in TIME on Monday (Oct. 19) said the situation is ongoing, and some users have been unable to access their funds for a week now).

RushCard has promised customers that their funds are safe. But underbanked members of the workforce are struggling through the problems, unable to access their paychecks that are loaded onto the cards. One of RushCard’s selling points is the ability to provide employees with their funds up to two days before they receive their actual paycheck.

Reports said that some users are filing complaints with the CFPB, though, according to separate reports, RushCard contracts include arbitration clauses, preventing users from suing the company. Some analysts are warning RushCard users to withdraw funds as soon as they become available and close their accounts.

The RushCard fiasco is fueling the debate on payroll cards, which some argue unfairly forces high transaction fees and other banking fees on its users.

In Pennsylvania, McDonald’s is currently wrapped up in a legal battle as employees argue that the paycards issued by the fast-food chain force unfair and illegal fees on its employees. The case, and now the RushCard trouble, is likely to fuel the debate over how to provide the right services to the underbanked.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.