Credit and Debit Cards: Marketing to Small Businesses - US - March 2008

Table of Contents

• Scope and Themes
• What you need to know
• Scope of this report
• Consumer research methodology
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Market size and trends
• Small businesses are a large and growing sector of the U.S. economy
• The small business market is not monolithic
• Small business credit card use is growing
• Small business cards are an attractive target for credit and debit card issuers
• Debit card use has risen spectacularly among U.S. consumers, but businesses have been slower to adopt debit cards
• Major competitors
• Change in focus for advertising and promotion
• Small business payment methods
• Debit card use
• The Market Size
  • Figure 1: Employment size of employer and non-employer firms in U.S., 2004
  • Figure 2: Growth in number of firms, by employee size in U.S., 2002 and 2004
• Demographic Trends in the Small Business Market
• Small Business Card Usage Increasing
  • Figure 3: Small business credit card spending, 2002-09
• Usage increasing for the smallest businesses
• Reasons for growth--now and later
• Economic Outlook and Small Business Credit Availability
• Level of optimism and credit trends
  • Figure 4: Small business optimism and credit trends, 2003-08
• Payment trends
• Debit rewards and decoupled debit
• Changing purchase categories
• Fraud protection and payment acceptance
• Competitive Context
• Competition is increasing
• Acquisition mailings
  • Figure 5: Business card direct mail acquisition offers--share of direct mail pieces and campaigns, Q4 2007
• American Express
• Overview
• Products
• Major card features
• Specific offerings
• Chase
• Overview
• Products
• Major card features
• Specific offerings
• Capital One
• Overview
• Products
• Major card features
• Specific offerings
• Citi
• Overview
• Products
• Major card features
• Discover
• Overview
• Products
• Major card features
• Specific offerings
• Bank of America/FIA
• Overview
• Products
• Major card features
• Advanta
• Overview
• Products
• Major card features
• WaMu
• Overview
• Products
• Major card features
• Wells Fargo
• Overview
• Products
• Major card features
• Advertising and Promotion
• American Express
  • Figure 6: American Express Gold Card
  • Figure 7: American Express Plum Card
• MasterCard
  • Figure 8: Mastercard Ad
• Visa
• Discover
  • Figure 9: Discover Ad
• Capital One
  • Figure 10: Capital One Ad
• The Small Business Consumer
• Small business payment usage
• Payment methods used by annual revenue
  • Figure 11: Small business payment methods for business expenses, by annual revenue, March 2008
• Payment methods used by home-based vs. non-home-based business
  • Figure 12: Small business payment methods for business expenses, by home-based versus non-home-based business, March 2008
• Payment methods used by type of purchase
  • Figure 13: Primary small business payment methods for categories of business expenses, March 2008
• Small Business Consumer -- Primary Debit or Credit Card Type
• Primary card type used by number of employees
  • Figure 14: Primary card used, by number of employees, March 2008
• Primary card used by annual revenue
  • Figure 15: Primary card used, by annual revenue, March 2008
• The Characteristics of Small Business Owners
• Demographic profile of small business owners by primary card used
  • Figure 16: Demographic profile of small business owners, by primary card used, by gender, age, race/ethnicity and education, March 2008
• Card used by number of employees
• Primary card used by other characteristics
  • Figure 18: Company profile of small business owners, by primary card used, March 2008
• Primary card used by type of business
  • Figure 19: Types of small businesses, by primary card used, March 2008
• Small Businesses -- Employee Use of Business Cards
  • Figure 20: Share of small businesses that authorize employeees to use credit or debit cards, March 2008
• Small Businesses -- Reasons for Primary Card Choice
  • Figure 21: Reasons for using primary card, by primary card used, march 2008
• Small Businesses -- Factors in New Card Acquisition
  • Figure 22: Ranking of inffluencers in credit card acquisition, March 2008
  • Figure 23: Most important consideration, by annual company revenue, March 2008
• Small Businesses and Debit Cards
• Use of debit cards for business expenses
• Receipt and activation of debit card when opening a primary business checking account
  • Figure 25: Receipt of debit card when opened primary business checking account, by annual company revenue, March 2008
  • Figure 26: Activation of debit card when opened primary business checking account, March 2008
• Profile of Debit Card Users
  • Figure 27: Demographic profile of debit card users and non-users, by gender, age, race/ethnicity and education, March 2008
  • Figure 28: Company profile of debit card users and non-users, by business location, annual revenue, number of employees, age of business, business structure and region, March 2008
  • Figure 29: Profile, by industry type, by debit card users and non-users, March 2008
• Payment Methods Used by Business Debit Card Users
  • Figure 30: Small business payment methods for business expenses, by debit card users and non-users, March 2008
• Main payment methods used by debit card holders
  • Figure 31: Primary small business payment methods for categories of business expenses among debit card users, March 2008
• Key Influencers in Credit Card Acquisition Among Debit Card Users
  • Figure 32: Most important influencer in credit card acquisition, by debit card users and non-users, March 2008
• Reasons for using primary card
  • Figure 33: Reasons for using primary card, March 2008
• Small Business Debit - Rewards Valued by Business Card Users
  • Figure 34: Rewards valued by small business owners, 2007
• Non-card Users
  • Figure 35: Share of small businesses that use no credit or debit cards, by number of employeea, revenue and region, March 2008
  • Figure 36: Reasons for not using credit or debit cards, March 2008
• Appendix: Trade Associations