Abstract
NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP
This report examines recent developments in the highly competitive small
business credit card marketplace. Small business credit, charge, and debit
purchase volume is approaching an estimated $300 billion annually in the U.S.,
and the market offers the potential for above-average growth for issuers
targeting the segment. In this desirable segment, intensified competition for
small businesses is emerging on four fronts:
- Reward points programs
- Cash back and discounts
- Trade credit offers
- Vertical segment positioning
The potential combination among these four dimensions are nearly unlimited.
Credit card issuers and other lenders may use them to offer segmented
offerings to capture the attention of small businesses and engage them in
using the product.
Highlights of the report include:
- 1. The small business credit card market continues to offer above average
growth opportunities to issuers.
- 2. The complex segment structure of the small business universe is
spawning segment-oriented products, with more such offerings to come.
- 3. The value of trade credit to cash-flow-affected small businesses is
significant, and lenders are increasingly offering trade terms in their
programs.
- 4. Future marketing directions are likely to pursue narrower segment
interests, as well as offering user-selected trade terms.
Ken Paterson, Director of the Credit Advisory Service at Mercator
Advisory Group and the author of this report comments that, "there are some
key product developments in the industry that may well cause small businesses
and lenders to re-discover credit terms, and in particular business-oriented
trade credit that is not just a re-packaged consumer offering. Trade credit
terms in various incarnations are becoming available through small business
programs, and may well make an impact on future product directions."
View Cart
