Innovations in business-to-business (B2B) payments in Singapore, which include GIRO, PayNow, real-time bank transfers amongst many others were triggered by the pandemic.
However, traditional commercial cards still have a standing advantage over these payment methods by offering extended payment terms and rewards. Yet, with the recent launch of virtual cards – they provide added benefits such as reconciliation and control that are beneficial to companies with larger or remote workforces.
Successful fintechs have also chosen to collaborate with SME funding platforms to venture into the credit card space and these pose as an emerging threat for banks. To stay ahead of the game, banks must offer more competitive FX rates to SMEs and solutions. By building on the capabilities of both fintechs and banks, there is potential to meet the needs of SMEs to improve their cashflow & savings.
What are some benefits to growing your business with commercial cards?
1. Commercial cards are exhibiting numerous innovations in recent times.
Ranging from flexible payments to virtual cards, B2B payment solution providers are developing innovative payment products to address issues associated with B2B payments. Major card networks are offering virtual cards to enterprises to enhance control over expenses. Cryptocurrency has been used for cross-border payments and settlements. New payment networks may also facilitate transactions between business parties. The commercial card is varied, with options ranging from flexible repayment plans for cashflow management to sustainability initiatives that offset carbon emissions from fleet vehicles.
2. APAC dominates global payments revenue with almost half of the global revenue pool.
More than 60% of payments revenue in APAC can be attributed to commercial payments. We expect Singapore’s B2B payments market to grow at a CAGR of 5% over 2021-2025. Commercial credit cards have one of the highest growth rates in the B2B space in Singapore and is expected to reach US$1.31bn by 2025, approximately 7.9% of Singapore’s total payments revenue. Digitalisation and the benefits of corporate cards such as cashflow optimisation, control, ease of reconciliation, and rewards are key drivers of growth.
For more key findings on how SMEs can benefit from commercial cards, click here to gain full access to the research paper.
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