What’s Ahead For EU’s Commercial Card Market?

How will Europe’s commercial card industry evolve in the next few years? New analysis from Mercator Advisory Group that was published yesterday (March 23) hoped to find out.

Researchers published their “Commercial Cards in Europe: Stagnating or Growing?” report and found a key area of the industry in which players will want to capitalize.

“The major opportunity should be in the virtual card/SUA [single-use account] space, although starting from a small base, given the inherent advantages to this product,” said Mercator Advisory Group Director of Commercial and Enterprise Payments Advisory Service Steve Murphy, who also authored the report.

Regulations across the EU are also likely to bend the direction of the corporate card space, he added.

“The European Union’s new Interchange Fee Reform regulations will have some impact on corporate card growth, but whether that is a shifting of spending to other payment types or simply a redistribution of card spending share remains to be seen.”

According to analysts, the region has seen spending volumes in the commercial card space, traditionally fueled by corporate travel. But Mercator predicts that, through 2020, procurement-related spending is likely to shift the direction of corporate card payment spending trends.

Earlier this year, industry experts also pointed to another area of regulation likely to impact the commercial card market.

A debate continues regarding interchange fees, and the European Union has set a cap on these charges through its Payment Services Directive 2 (PSD2). But, last January, EU officials noted that the decision of whether this cap also applies to purchases made with a commercial card will be up to the individual Member States.

“The only category of payments that may be surcharged are payments with business/corporate credit cards and with cards issued by so-called three-party schemes, which are used in Europe mostly for business purposes,” stated European Commission Policy Officer of Financial Services Krzysztof Zurek in a statement to the press.