Corporate Cards – Procurement Best Practices & Sourcing Strategies

DESCRIPTION

Corporate Cards Market Global Size:

As today’s businesses and individuals are adopting digitization or online methods for transactions, the corporate cards market is continuously evolving, which caused a growth rate of approximately 7.3% until 2026. However, this sector was evaluated at nearly $40 billion in 2022, as per ELINT Market Research’s latest corporate card procurement market research.

Further, some of the substantial factors such as the advent of mobile payments, the extension of open banking efforts, the ongoing development of e-commerce, governmental advancements, and the long-term viability of payments are all responsible for this growth during the predicted period.

Moreover, a few other significant trends that are anticipated by 2026 in this industry include the rise in cashless transactions, the use of digital wallets, the integration of cryptocurrencies, biometric verification, and subscription and periodic payments.

Market Definition:

The corporate card industry takes care of the worldwide digital financial segment for businesses; so they can keep track of employee spending, corporate journey costs, procurement, and other business-related trades. The banks or financial organizations provide diverse cards like debit, credit, charge, and prepaid, which can be used for food, health, medicines, groceries, restaurants, customer electronics, travel, entertainment, and more. Hence, these advanced payment approaches offer greater efficiency and transparency in financial operations and also meet the changing needs of contemporary businesses.

Corporate Cards Market Drivers:

1. Rise of Digital Payments in Corporate Sector –

Corporate card procurement intelligence companies increasingly embracing digital and cashless transaction systems in their office environments, which drives the adoption of corporate cards. These cards offer companies a practical and effective method for monitoring expenditures in real time and controlling employee spending.

2. Expanding Globalization and International Trade –

As intentional trade activities and globalization are rising, the need for corporate cards is also expanding since they can help in efficient online transactions and currency conversions.

Corporate Cards Market Challenges:

1. Security Concerns –

Besides easy digital transaction benefits, corporate cards also brought security concerns like fraud, theft, data breaches, etc among businesses, which is a major challenge in this sector.

2. Difficulty in Managing Corporate Card Expenses –

Organizations also experience trouble managing corporate card costs and negotiating trades since they become time-consuming. As multiple businesses employ manual methods for expenditure reporting and receipt handling, there are chances for errors and delays.

Corporate Cards Market Opportunities:

1. Rise of Mobile Technologies –

Increasing utilization of smartphones and mobile applications caused worldwide businesses and individuals to employ digital payment solutions, which is a great opportunity for industry participants.

2. Benefits of Customized Corporate Cards –

Today’s corporate card manufacturing organizations are offering tailored solutions to consumers so they can align cards with their precise requirements, choices, and industry conditions.

Corporate Cards Market Segmentation:

1. Various Card Types –

The global corporate cards procurement intelligence market exhibits different card types like debit cards, credit cards, reloadable debit cards, etc., which provide specific benefits depending on customers’ individual needs.

2. Different Corporate Card Issuers –

Segmentation based on diverse corporate card issuers and providers include banks, finance companies, credit card firms, techfin foundations, and more.

Sourcing Strategies in the Corporate Cards Market:

Sourcing strategies help organizations fulfill their particular corporate card solutions needs. The global sourcing strategy allows organizations to acquire corporate cards from a single supplier to facilitate their financial operations. With this method, they can do bulk goods purchasing and lower costs. Contrarily, the regional sourcing method helps businesses to trade corporate card solutions from multiple service providers; thus, they can get a broader range of card options from suppliers living in varied countries.

Card Network Acceptance/Adoption in the Corporate Cards Market:

The diverse card networks experienced different levels of acceptance and adoption in the international corporate cards market. In this list, the first one is MasterCard, which relishes high acceptance among corporate businesses. Likewise, VISA also operating as dominant in this sector as multiple industries and terrains employ this card. Moreover, Amex possesses a medium level of leadership in the international market since its acceptance depends on region and vendor choices. However, still this card attracts corporate card procurement market intelligence companies that looking for significant expense management solutions.

Engagement Models in the Corporate Cards Market:

Organizations and card distributors can establish their relations with the help of engagement models. In this context, the single global supplier model allows different regions’ consumers to partner with single card issuers in a streamlined and centralized manner. On the other hand, the global multiple-supplier model offers flexibility to users to connect with multiple card issuers as per their regional or functional necessities. This method also offers the facility for customization in terms and conditions.

Potential Cost Savings/Rebates Offered in the Corporate Cards Market:

The potential cost savings and rebates are significant factors in the global corporate cards market, which generally assist in the adoption and selection of appropriate card issuers. Thus, rebates typically account for 30bps-150bps or 0.30%-1.5% that display a portion of the total transaction volume. This rebate or incentive factor could influenced by several factors including the total volume of spend, count of cards in circulation or active use, early payments, geographical dynamics, companies’ powers to negotiate, etc. Consequently, collectively these factors help organizations optimize their corporate card purchasing programs and reduce high expenses.

Technology Strategies in the Corporate Cards Market:

This corporate card procurement intelligence market research report illustrates that efficient technology strategies are crucial for businesses to ensure flawless integration of card data with the company’s existing ERP and P2P infrastructure systems; this way, they can facilitate expense management operations, and also enhance transparency into spending structures. Further, companies can utilize features like automatic data collection, pacification, reporting, decreasing manual errors, and more. Moreover, if businesses adopt stand-alone infrastructure solutions, they get benefits such as real-time cost tracking, guideline implementation, and separation from their P2P or ERP systems.

Contract Models in the Corporate Cards Market:

The two major contract models of the corporate card global industry are short-term and long-term. In this sense, short-term contracts generally last for one to two years, which gives consumers quarterly price revisions and sufficient time to judge card providers’ services. Whereas,  long-term contracts last for three to five years; so customers can make enduring relationships with card suppliers.

Leading Suppliers in the Corporate Cards Market:

Some of the leading suppliers of the competitive corporate cards market are CITI​, American Express​, AirPlus​, Barclaycard​, US Bank​, ING Bank​, HSBC​, and Bank of America​.