With the nation's personal credit-card market becoming saturated, MasterCard International sees commercial payments by small- and medium-sized enterprises (SMEs) as a market segment with great potential.
Citing statistics for the Asia-Pacific region, including Taiwan, China, Japan and South Korea, MasterCard said 59.8 percent of the US$700 billion exchanged in business-to-business transactions consists of cash and checks.
This proportion is believed to be bigger in Taiwan, a massive but underdeveloped market which the company is eager to tap, Peter Gordon, MasterCard's vice president for commercial payment solutions, told reporters yesterday.
Operating in a similar fashion to personal credit cards, commercial cards allow cardholders -- who are owners or employees of businesses -- to make payments when purchasing office supplies and stationery or purchasing business trips and meals.
This saves businesses the trouble of making advances and applying for reimbursement, and can help corporations and the public sector lower costs, streamline procurement processes, reduce paperwork and increase operational efficiency, according to MasterCard.
Moreover, it is a lucrative business for card issuers, Gordon said, citing MasterCard's global figures showing that an average of US$6,664 per year is spent on commercial cards, four times that spent on personal cards.
Banks can design loyalty programs to build better ties with their corporate customers, he added.
Visa International is also upbeat about the under-penetrated market.
"The transaction volume made through commercial cards shows strong growth. The opportunity is huge," said Christopher Clark, Visa's country manager in Taiwan.
By cooperating with 16 banks to target large-sized enterprises and SMEs, Visa had issued 17,000 commercial cards in Taiwan by the end of last month, generating over NT$5.3 billion in transactions in the year ending March, or 150 percent growth year-on-year, Clark said.
While the idea might be new to some business operators, American Express Bank Ltd took the lead by issuing the nation's first "corporate card" in 1989, targeting big corporations and foreign companies, followed by the issuing of a "business card" in 2000 to serve SMEs, said Kelly Yang (
Although the market development sounds enticing, an academic pointed out that the lack of a rating reference system on SMEs would make banking institutions bear higher risks.
"Card issuers have less access to understanding the nature of a company, whose success or failure is closely related to the economy," said Thomas Lee (李桐豪), professor of money and banking at National Chengchi University.
But if a scoring system is established, banks instead would garner better information about how their corporate customers spend money with the help of commercial cards, he said.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
Micron Memory Taiwan Co (台灣美光), a subsidiary of US memorychip maker Micron Technology Inc, has been granted a NT$4.7 billion (US$149.5 million) subsidy under the Ministry of Economic Affairs A+ Corporate Innovation and R&D Enhancement program, the ministry said yesterday. The US memorychip maker’s program aims to back the development of high-performance and high-bandwidth memory chips with a total budget of NT$11.75 billion, the ministry said. Aside from the government funding, Micron is to inject the remaining investment of NT$7.06 billion as the company applied to participate the government’s Global Innovation Partnership Program to deepen technology cooperation, a ministry official told the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s leading advanced chipmaker, officially began volume production of its 2-nanometer chips in the fourth quarter of this year, according to a recent update on the company’s Web site. The low-key announcement confirms that TSMC, the go-to chipmaker for artificial intelligence (AI) hardware providers Nvidia Corp and iPhone maker Apple Inc, met its original roadmap for the next-generation technology. Production is currently centered at Fab 22 in Kaohsiung, utilizing the company’s first-generation nanosheet transistor technology. The new architecture achieves “full-node strides in performance and power consumption,” TSMC said. The company described the 2nm process as
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS