B2B Payments

Issuers Question The Corporate Card’s Long-Term Volume Reliability

With commercial card adoption on the rise as more organizations make the shift to digital payments, card issuers continue to drive innovation with their corporate card products.

But this week’s look at the latest in commercial card news finds growing questions about the reliability of corporates to drive revenues for card issuers with business travel on hold — possibly for the long term.

American Express Eyes Corporate Spend Drop

Despite being characterized by high transaction values, corporate card spend may no longer be a driver of growth for American Express, the firm’s chairman and CEO Steve Squeri recently said during a conference, according to The Company Dime.

Speaking at the Bernstein Annual Strategic Decisions Conference held last week, Squeri noted that while consumers are likely to rebound their spend volumes rather quickly, “Corporates develop different muscles,” and the decline in corporate travel and entertainment (T&E) spend on commercial cards affecting American Express and other card issuers may not bounce back so fast.

“It is not a high-growth area,” Squeri said of the corporate T&E spend segment, according to the report. He added that with professionals now relying on virtual meetings instead of physical travel, “Corporate travel has changed maybe forever,” a consideration with significant implications for corporate travel card spend.

The same day Squeri made these remarks, American Express Canada launched new features for its commercial card products used by small- to medium-sized businesses (SMBs) and corporates. Some of the new tools, the company noted, are in response to corporates’ shifting card spend needs amid ongoing travel restrictions and changing spending habits.

India Eyes Gradual Corporate Card Spend Recovery

American Express is far from the only entity watching the corporate card spending arena closely. New figures from SBI (State Bank of India) Cards and Payment Services highlighted recovering consumer card payment volumes as well as offered an update into businesses’ card spend as lockdown restrictions ease.

“Considering a significant part of corporate cards spends is travel-related, both corporate travel and bulk purchase of airline inventory by travel agents were impacted due to lockdown and government restrictions,” SBI Cards and Payment Services said, according to Indian Express reported. “The corporate card spends have witnessed a moderate recovery with partial resumption of domestic air travel in the country since May 25.”

Visa Expands PTSB Collaboration

Visa is expanding its collaborative agreement with Permanent TSB (PTSB), an Ireland-based financial services provider, to connect PTSB Bank clients to Visa-issued cards. The agreement includes commercial debit cards, according to an announcement, with reports in Verdict.co.uk noting that the expanded agreement will enable PTSB Bank to expand its card offerings and features for both consumers and corporates.

“We have chosen to partner with Visa because of their combination of market-leading innovation, security and acceptance, building on a successful relationship that spans more than a decade,” said PTSB Retail Banking Director Patrick Farrell in the report.

Shopify Introduces Business Card

Launching a suite of B2B solutions, eCommerce company Shopify is now connecting its SMB users to a business card product linked to a business account and rewards program without monthly fees.

The solution aims to provide businesses with a cash flow management tool as many online sellers struggle to manage industry volatility. The cards are offered in physical and virtual form allowing SMBs to access their revenues more quickly.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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