Increasing use of commercial card payments with virtualization


Current Challenges

Banks are well placed to generate revenue growth from commercial payments, but growth will only be unlocked through innovation. Virtualization offers a way to do this.

The reality is that Commercial Cards players struggle to realise growth and profitability through a low share of spend and nimble tech-savvy and sharply focused Fintech companies stealing market share.

With commercial interchange in Europe now up to 6 times higher than interchange on consumer cards, they offer the best option for revenue growth for cards operations in Europe.

Suppliers are resistant as accepting cards is economically unattractive for suppliers above a certain transaction size. Because of this Corporates face practical difficulties in implementing cards for higher value procurement.

The Opportunity                      

Ixaris presents four ways a Commercial Cards business can take advantage of recent advances in product and technology to sustain and expand the business.

1. Increase share of spend through supplier enablement, better plumbing

  • ‘Automatic’ Acceptance – Buyer initiated payments
  • Enhanced Data – tighter payment integration onto existing business networks
  • More Cost Effective – Interchange schemes
  • Faster Payment – better cash flow & reverse factoring


2. Beyond Purchasing – new cases for virtual commercial cards

There are business activities, common across a wide range of industries where virtual commercial cards can displace currently used methods of payment. For example:

  • Incentives and Rewards
  • Disbursements
  • Payroll
  • Insurance


3. Value-add through specialized in verticals

Traditional commercial cards and even standard virtual card solutions are often not fit for purpose. This is an opportunity for commercial cards operators to extract value by delivering vertical-specific solutions.

As an example, in the travel sector, beyond the issuing of ‘virtual’ cards for purchasing, Online Travel Agents (OTAs) require support for very use-case specific requirements. Similarly specialized requirements are evident in other verticals: Online Media, Insurance, Real Estate Management, Construction, etc.

4. Re-writing the economics of the cards model

Using virtualization you have the flexibility of virtual accounts to inject additional services, such as credit lines, foreign exchange sourcing, supplier chain finance and even exotic services like ESCRO.

Taken as a whole these changes have the opportunity to completely transform the world from commercial cards to a broader world of commercial payments that will use a variety of rails to have richer data, better economics and easier controls for both buyers and suppliers.

Meet us at the CPI European Summit, March 15-16


Watch our indepth webinar

Ixaris recently presented an indepth webinar on commercial card payments and virtualization as well publishing an accompanying whitepaper.

Watch the webinar here