Commercial payment cards with rewards are going through a renaissance. A new report says smaller companies with smaller programs working with regional and second tier commercial card issuers began a resurgence of offering and adopting corporate card with reward programs.
Smaller companies with smaller programs are mostly shut out from rebate eligibility by the bigger issuers, according to the new research from Mercator Advisory Group’s Commercial and Enterprise Payments Advisory Service. Additionally, regional and second tier issuers don’t have deep enough pockets to be able offer smaller programs cash incentives for spend. This has caused a resurgence of commercial card rewards.
Mercator says there are pros and cons between rebate and rewards for companies to consider.
For rebate programs the pros: additional revenue stream and it can be used to fund projects, FTE or make up shortfalls. The con is receipt of fund may raise tax and accounting implications.
For rewards programs the pros: offers benefits at the individual employee level and provide flexibility in redemption. The con is it may encourage out-of-policy spend to achieve rewards.
Companies mentioned in the Mercator research include Chase, MasterCard, U.S. Bank, and Visa.
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