Commercial Card Adoption Poised to Rise as Acceptance Costs Decrease

Commercial card adoption, long sidelined by businesses because of cost concerns, is experiencing a renewed interest in business-to-business (B2B) transactions. The primary drivers of this change in outlook include today’s higher interest rates that lower effective working-capital costs and the growing willingness among card issuers to negotiate fees. As the value proposition for commercial cards becomes increasingly hard to overlook, businesses are rethinking their B2B payment strategies.

PYMNTS’ latest research on the role of commercial cards in B2B payments finds that, with cost no longer the barrier it once was, businesses are focusing on the potential upsides of incorporating commercial cards into their payments lineup.

These are just some of the findings detailed in “The Treasury Management Playbook: Businesses Give Commercial Cards a Fresh Look,” a PYMNTS and Citi collaboration. This report delves into the trends driving commercial card adoption, evaluates costs and value propositions, and investigates its role in the broader B2B payments landscape.

Key findings from the report include:

Suppliers benefit as commercial card issuers negotiate fees.

Previously deterred by substantial processing fees, suppliers now see the appeal of commercial cards. This shift is primarily due to card issuers’ newfound flexibility in negotiating terms and fees. As issuers tackle the cost dilemma, the asymmetry in B2B payments cost lessens, positioning commercial cards as a stronger player in the B2B space.

Commercial cards optimize B2B operational efficiency.

Commercial cards streamline buyer and supplier reconciliation processes through straight-through processing and unique virtual card numbers. These cards offer real-time visibility into expenses by integrating seamlessly with existing accounts payable systems. This visibility contrasts sharply with the inefficiencies of traditional purchase orders and notably enhances the management of ad hoc payments.

Commercial card use builds B2B trust and streamline global transactions.

Commercial cards foster trust in business relationships, explaining the positive correlation between higher spend per account and increased business-banking satisfaction. These cards also minimize friction in cross-border B2B payments, enabling more efficient and compliant international transactions.

This playbook examines the evolving role of commercial cards in B2B transactions and offers readers valuable tools to help determine how commercial cards fit into the business payments mix. Download the report to learn how a more appealing value proposition and issuer flexibility drives commercial card adoption.