Commercial card programmes are seeing a popular resurgence among corporates, encouraging banks and card issuers to develop new products and services.
Corporates want to solve a number of issues to better weather the tough economic environment, including shortening working capital cycles, protecting supply chains, increasing efficiency while cutting costs, and significantly improving reconciliation, which has long been a pain point on both sides of the transaction.
Commercial cards can help solve these problems by allowing corporates to pay their suppliers early; eliminating paper and manual interventions; and providing richer data than other payment types. The data is also more actionable, whether for supplier negotiations, compliance or a better understanding of employee behaviour.
Additionally, a global card programme can be used to help manage foreign exchange (FX) risk. Corporates can negotiate with their banks an agreed spread for low-value payments, which removes the unpredictability around FX, and settle in the currencies of their choice.
The industry is investing in new technologies that provide enhanced security and payment efficiencies. For example, the introduction of virtual cards for all types of spend, effectively replacing the classic purchasing card, has been key to driving greater commercial card programme adoption.
Tokenisation, which substitutes the real credit card number with a separately generated identifier, is also a significant development. Together these innovations allow corporates to use unique numbers for one-off secure payments, reducing the possibility of card details being compromised and again delivering much richer data for each payment. Additionally, many banks are exploring new possibilities in the mobile payments space, such as digital alerts and SMS capabilities.
The digitisation of commercial cards opens up self-service opportunities, allowing corporates to manage and change strategies as needed. Through digitisation, products are becoming more flexible, adaptable and customisable down to an individual user level.
