Commercial cards remain a small, but growing, part of the B2B payments ecosystem, thanks in part to their versatility.
The latest in commercial card innovation reflects that, with new solutions ranging from cards designed for small businesses with high travel spending to products designed with more flexible credit limits for cash-strapped startups. But a commonality in the latest offerings from Visa, American Express and Brex is the industry’s embrace of data, and data integration.
T&E Goes Virtual
Although commercial cards account for only a sliver of the B2B payments pie, new research from Mastercard, the Association of Corporate Travel Executives, and industry body the NAPCP found an increase not only in the use of card products for business travel spend, but in virtual cards.
According to their latest report, two-thirds of global corporations said they use corporate cards to manage travel expenses, with travel managers also reporting increased use in v-cards and single-use cards for employees who travel less frequently. Most survey respondents said they are “very” or “extremely” satisfied with their current corporate card offering, and 63 percent said it’s their preferred payment method.
Still, researchers found, use of v-cards remains relatively low at only 15 percent (although 28 percent said they plan to adopt v-cards in the future).
“When organizations’ employees use corporate T&E cards, they’re able to capture enriched data to reconcile expenses, prevent misuse and overspending, and ultimately, negotiate better rates with suppliers,” explained Mastercard Global Commercial Product Management Senior Vice President Jeff Feuerstein. “The cost of employees using their personal cards far outweighs the benefits, so it’s crucial to have clear corporate card usage requirements and to educate employees about why corporate card usage works in both the organization’s and their favor.”
Visa Targets High-Spenders
Visa debuted its latest small business card offering with Visa Infinite Business, announced Wednesday (Oct. 23). The payments technology firm is targeting high-spending small and medium-sized businesses (SMBs), with Visa B2B offered for everyday business spend, and Infinite Preferred focused on corporate travel spend.
David Simon, senior vice president and global head of Small Business and Medium Enterprises at Visa, spoke with PYMNTS ahead of Visa Infinite Business’s launch, explaining the opportunity of commercial card products for SMBs against the backdrop of a market in which 52 percent of SMBs currently leverage commercial card products in some form or another.
“SMBs use credit in a variety of ways,” he said, “as end-of-the-month, short-term financing, on a per-transaction basis or as a longer-term financing vehicle.”
Key opportunities for SMB commercial cards lay in areas like spend visibility and analytics, as well as the ability for tools like Infinite Business to integrate into existing back-office accounting and finance platforms.
Amex Embraces Open Banking
American Express launched more than one commercial card initiative in recent days, one of which being its rollout of a suite of new corporate cards designed for startups. Unique to the American Express Corporate Program for Startups is its integration into business customers’ bank account data, enabling the card to offer a dynamic credit limit based on that information.
“It’s a new data source and a new lens on underwriting,” explained American Express President of Global Commercial Services Anna Marrs in an interview with Bloomberg earlier this week.
In another commercial card rollout, American Express announced the debut of the Business Edge Card for small businesses in Canada. Targeting expense management, the offering similarly prioritizes data integration with existing expense management platforms, and incorporates a range of value-added services, including insurance, to protect small business owners against employee misuse of the card.
Brex Expands Beyond Cards
Reports positioned American Express’s latest offering for startups as a direct competitor to products offered by commercial card startup Brex, which has similarly introduced a new product for its startup clients. Earlier in the month, Brex announced Brex Cash, a cash management solution that aims to replace traditional bank accounts for businesses.
Again, with a focus on integration, Brex Cash connects with Brex card products to augment the firm’s broader financial services offering, the result of a collaboration with Radius Bank.