Packaged Facts released its annual report, U.S. Market for Corporate Credit Cards and Purchasing Cards. The report is based on primary research including interviews with industry participants and secondary research including articles appearing in financial, marketing, trade publications; government resources; company literature; independent financial reports; and product advertising.
The report notes that Visa emerged as the largest commercial card brand by charge volume and number of cards in 2004 and cites *Visa as setting the pace of the market*:
– “After years of losing share in a market it essentially created, *American Express finally relinquished the top spot* in the commercial card market in 2004, by Packaged Facts estimates… in the late 1990s Visa made a major move into the market, and today Visa is highly competitive with Amex-in some ways *the card association is even setting the pace of the market*.” (page 10-11)
– “Enormous gains by Visa in recent years – *especially in small business cards, purchasing cards, and business debit cards* – propelled the card association to the head of the pack both in number of cards issued and in transaction volume.”(page 10)
Estimates show Visa claimed the *industry-leading* share of commercial payments
– “Packaged Facts estimates that *Visa claimed a 35.8 percent share* of commercial card transaction volume in 2004, up from 27.4 percent in 2001, while American Express dropped from 42 percent to 35.4 percent.” (page 10)
– “While the two were practically tied in transaction volume in 2004…*Visa’s rising trajectory* is clearly much steeper than Amex’s and *seems unlikely to slip*.” (page 11)
*Visa leads *in the number of domestic commercial payment cards
– “Visa…continued to increase its lead over American Express in number of domestic cards serving the commercial market, at 16.4 million to 11.4 million.” (page 10)
Visa CEO *Carl Pascarella predicted Visa would surpass American Express* in small business volume by the end of 2004
– “Sure enough, bolstered by strong growth in Visa’s purchasing and corporate card programs – thanks in no small part to growth in the government’s SmartPay program and improved marketing efforts to mid-market companies – *Visa’s overall commercial business is now second to none*.” (page 122)
Packaged Facts estimates the *volume of transactions on all commercial credit cards* (corporate, purchasing and business) at *$495 billion in 2004*, up 23 percent from 2003. Commercial card transactions are estimated to grow at a rate of 25 percent annually during the next five years, topping $1 trillion by 2008.
*Packaged Facts Methodology*
The statistics noted in the report are based on an evaluation of available information on market sales and trends to include data from the top corporate card Issuers as reported by Card Source One 2004 and 2005; data from SEC company filings; and trends and figures reported by the trade press. Additionally, demographics and product usage rates are primarily derived from the Simmons Market Research Bureau spring 2004 consumer survey, which is based on 28,724 respondents.