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.
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
Artificial intelligence (AI) giant Nvidia Corp’s most advanced chips would be reserved for US companies and kept out of China and other countries, US President Donald Trump said. During an interview that aired on Sunday on CBS’ 60 Minutes program and in comments to reporters aboard Air Force One, Trump said only US customers should have access to the top-end Blackwell chips offered by Nvidia, the world’s most valuable company by market capitalization. “The most advanced, we will not let anybody have them other than the United States,” he told CBS, echoing remarks made earlier to reporters as he returned to Washington
RSS