The global corporate purchasing cards market is projected to grow at a CAGR of 9.5% over the next five years due to the growth in spending on corporate purchasing cards, which is driven by lower fixed costs in the payment cycle, effective cash management, transparency and management control, and long-term process efficiencies.
According to ‘Global Corporate Purchasing Cards Market: Procurement Market Intelligence Report 2017-2021’ by Technavio, purchasing cards have slowly been adopted by businesses due to increasing cost savings per transaction, faster pay-to-procurement process, better cash forecasting, and ease of managing and tracking such transactions.
The adoption of various cost-optimization levers helps buyers of the global corporate purchasing cards market realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Corporate purchasing cards service providers adopt technologies such as fraud and malware detection software, mobile and web-based quick pay solutions, EMV, smart cards, and virtual payment cards to save up to 9% of the total category spend to buyers. Suppliers use sound data analysis to make informed decisions on procurement processes using spend amounts, frequencies, and timeframes.
Buyers usually consider the value of discounts, number of cards, value-added services, and customization levels offered before enlisting the services of a supplier. A strong credit management system is another key factor that helps enterprises to obtain external financing for large projects and assignments within the realm of the organization’s expertise.
Service providers may offer other Fintech and financial products and services along with cards. For example, cash management and current accounts are offered as a single service to buyers at a lower average price point. Adopting the bundling strategy can save up to 15% of the total category spend to buyers.