Corporate cards – a market full of opportunities

According to a report published by Beroe, the global corporate card market is expected to witness an annual growth rate of 7.3% between 2020 and 2026, while its projected market size in 2020 represented $32.3 billion. This considerable growth is due to multiple factors: businesses’ shift towards non-cash payment for a better visibility and control over their capital, but also merchants' acceptance of receiving globally adopted network providers such as Visa or Mastercard.

Breaking down the regional corporate card markets, the North American one is the largest with an estimated size of $14.1 billion in 2020, followed by $7.8 billion for the European one and $7.1 billion in the Asia-Pacific region. These markets are largely driven by high demand from the government and large corporations and expect a 7.5% growth for Europe and Asia and a 4% to 7% growth for North America. On the other hand, Latin America, Middle East, and Africa have the smallest estimated market share at $3.4 billion but is expecting an approximated 7% growth.

The report shows a high demand that needs to be satisfied: it creates an opportunity for issuers (from small to large and global financial institutions, banks, credit companies, retailers, and private card processing companies, etc.) to enter or reinforce their positioning in this growing and flourishing global corporate card market.  

Corporate card types - the difference between corporate, business, fleet, purchasing, and lodge card

Corporate cards represent great financing options for companies by offering easy access to capital, topped with multiple other benefits and rewards. Under the term “Corporate cards”, a large variety of card types exist to cover many use cases in terms of offer, eligibility, and requirements.

Business cards: According to American Express, a business credit card allows business owners or authorized employees to pay for company expenses, including office supplies, utility bills to travel or even dining expenditures. This type of cards also usually offers rewards such as cash back or earning points for specific purchases. Any type of business is eligible, irrespective of the size of the company, making this type of corporate card very accessible and flexible.

Corporate cards: On the other hand, although corporate cards deliver the same offer as business ones, the requirements to obtain one are stricter. Indeed, these cards are generally designed for corporations with high annual revenues. This is explained by the fact that there is a minimum spending expected and the annual fees are higher than for business cards. However, like business cards, corporate cards offer multiple types of rewards and cash back options.

Fleet cards: Commonly referred to as Fuel cards – they cover a specific use case: fleet cards are business gas cards, where money is only spent on fuel for the business's vehicles. It’s a smart and easy way to manage fuel and maintenance expenses. It not only allows to set control and limits for the spending but also provides tracking and reporting options, which considerably reduces the overall fuelling costs.

Purchasing cards: Purchasing cards, also called P-cards, Procurement cards or Payment Cards are a smart and controlled way to give employees access to company money in a defined environment. This a more flexible option for business cards as companies can find it sometimes risky to issue a business card for every employee. This type of corporate card is here to make the purchasing process of goods and services by the employees easy, quick and secure, with a built-in approving flow for managers.

Lodge cards: Unlike all of the above, Lodge cards are not physical. Indeed, this type of card, that is specifically designed for business travel expenditures, is de-materialized. Each company has a unique card number lodged with the company’s travel providers (agencies, suppliers, self-booking tools, etc.). The process of booking is made easier as it’s a centralized payment solution that provides one bill for all of the travelling purchases made over a specific period of time.

Benefits of corporate cards

No effect on personal finances (reduced personal risk): Corporate credit cards are issued based on the company’s financial capacities and not on the cardholder personal finances. Both the professional and personal aspects are kept separated for every credit card transaction.

Ability to set spending limits (more control): The issuance of corporate credit cards to employees is only successful by setting a specific and controlled environment. Indeed, multiple programs allow managers to set spending limits and rules about the type of expenses the employees can make. Therefore, personal use is usually completely forbidden.

Reduced expense fraud: Corporate credit cards have put a clear stop to employee's receipt manipulation and allow to prevent fraud attempts. Providing fake receipts or exaggerated expenses is no longer possible as every transaction is reported and can be reviewed. Companies can have clear visibility over the spending, preventing every type of fraud from employees.

Advanced security:  Corporate credit cards offer protection with multiple level of security. Cards are equipped with the relevant systems that allow to prevent theft, misuse, and react quickly in situations of loss or accident.

Simplified tracking and analysis: Expense management is made easier with all of the tracking and reporting options. Corporate cards offer businesses detailed reports on every work-related expense with the possibility to track and review. This certainly gives the company more visibility and control over the spending.

Credit card rewards: Finally, rewards are one of the benefits that are particularly enjoyed by employees. Indeed, companies get their money’s worth in the form of rewards: discounts on travels, rentals or specific shops, gift cards and or even cash back are all included.

Launching your corporate card offer

Today, issuers need to be able to provide for the increasingly growing demand. Indeed, the market is dynamic, and solutions need to be flexible and innovative.

HPS’ PowerCARD offers a modern, flexible and parametrizable solution to manage Corporate Cards for any type of organisation. Thanks to its capabilities around hierarchy setup, limits & restrictions, transaction processing, statement & billing, reporting and expense report management, PowerCARD allows any organisation to personalise their Corporate Card services based on their own needs/requirements. PowerCARD also offers the ability to issue any Corporate Card type: credit, debit, charge.

To know more about HPS and PowerCARD capabilities, please contact sales@hps-worldwide.com.