Agile card tools are key to business credit card growth

There is a common misconception that business credit cards are only for medium to large businesses because small business owners typically use personal credit cards for their businesses. Additionally, business card marketing has not traditionally been targeted at small business owners.

However, banks are beginning to rethink this strategy. They view small business as essential to business card portfolio growth and use innovative spend management tools to help attract small business.

To learn more about how business credit card management plays a role in business card portfolio growth, PaymentsJournal spoke with Abandon ChuahanVP Product Management at Fiserv and Brian Rileydirector of the credit advisory service at Mercator Advisory Group.


Agile and intuitive card and expense management tools are key to business card portfolio growth

PaymentsLog Agile and intuitive card and expense management tools are key to business card portfolio growth

Corporate credit cards as a revenue generator

Offering corporate credit cards represents an attractive revenue opportunity for financial institutions. The average ticket size for a commercial transaction is 2.4 times larger than that of a consumer ticket.

Historically, financial institutions have focused on medium and large businesses. Recently, the landscape has changed a lot with the gig economy in the picture, and we’re seeing huge growth in small businesses. As Chuahan noted, “there are 32.5 million small businesses in the United States alone.”

Most of these small businesses need cash, cash, and loans. Without doubt, the credit card is the best way to do this. Among other benefits, credit cards offer a grace period to make payments.

Research shows that many small business owners simply use a personal Visa or Mastercard. This practice is convenient, but it also has drawbacks.

If you go through an IRS audit, you’re going to have to reveal all of your [personal] buying habits to the IRS if they are on your chart. Having a separate business credit card for expenses keeps personal and business activities separate.

Using a personal credit card for business purposes has other disadvantages. Chuahan described how frustrating it can be for employees who use their own credit cards for company purchases and then have to request a refund through a cumbersome process.

“You don’t want to get stuck because there’s someone waiting to get approval because they have to, they have to go and get their money back,” Chuahan said.

Business Challenges of Using Credit Cards and Managing Expenses

Small businesses today face many challenges when it comes to using credit cards and managing expenses. These challenges include tracking expenses, controlling those employee cards, and file sharing risks.

Chuahan described the tools needed to make a business credit card work well for a small business. Small businesses need clear visibility into how much they’ve spent so far and how much credit and money they have available. In addition, the management system must be mobile.

An ideal business credit card system would provide payment flexibility and transparency of what has already been purchased, but it could also allow the bank to offer small businesses different options for different products.

Chuahan said, “If my bank knows how much I spend [and] where I spend, the bank might be able to leverage this information to provide competitive offers to customers. »

For example, suppose a bank sees that a small business customer is buying supplies from company XYZ at a particular price. The bank may have many other companies buying similar things elsewhere at a lower price. The bank could then provide this information to this small business, which could then adjust its purchasing habits.

The effect of AI on small businesses through expense management and small business cards

Artificial intelligence (AI) is revolutionizing many sectors of the economy, enabling the optimization and automation of various types of systems. Expense management will be no different. AI will help small businesses with business credit cards spend less time managing expenses, freeing up time for other tasks.

In the case of business credit cards, AI will most likely be applied to expense management. An AI tool could be programmed to learn a business owner’s spending habits and use that information to create a categorization system that will aid in accounting later. Chuahan explained, “The tool can automatically categorize different expenses into the correct tax category so that at the end of the year, when you record your expenses, you just click a button and send the data. to your accounting system.

Fiserv has created a tool that can help small businesses manage all of their expenses automatically. The tool learns the pattern of what small businesses do, eventually does it for them, and frees up small business owners to focus on other tasks.

The future is bright for business credit cards. New features will make running a business easier, and the benefits will make these cards a no-brainer for small business owners. For more information on all of these topics, listen to the podcast in which Chuahan talks in more detail about these issues.

About Shirley L. Kreger

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