LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global corporate purchasing cards market is expected to grow at a CAGR of 9.5% over the next five years due to the growth in spending on corporate purchasing cards, which is driven by lower fixed costs in the payment cycle, effective cash management, transparency and management control, and long-term process efficiencies.
The research report titled ‘Global Corporate Purchasing Cards Market: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The rising adoption of electronic payments across different businesses and industries is a key driver for the market,” says lead Technavio procurement specialist Suraj Kumar for category spend intelligence. “Purchasing cards have slowly been adopted by businesses due to increasing cost savings per transaction, faster pay-to-procurement process, better cash forecasting, and ease of managing and tracking such transactions,” adds Suraj.
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Cost saving opportunities in the global corporate purchasing cards market
The adoption of various cost-optimization levers helps buyers of the global corporate purchasing cards market realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio’s procurement experts have segmented the cost saving opportunities in the global corporate purchasing cards market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology
Corporate purchasing cards service providers adopt technologies such as fraud and malware detection software, mobile and web-based quick pay solutions, EMV, smart cards, and virtual payment cards to save up to 9% of the total category spend to buyers.
Suppliers use sound data analysis to make informed decisions on procurement processes using spend amounts, frequencies, and timeframes.
Supplier competition
Buyers usually consider the value of discounts, number of cards, value-added services, and customization levels offered before enlisting the services of a supplier.
A strong credit management system is another key factor that helps enterprises to obtain external financing for large projects and assignments within the realm of the organization's expertise.
Bundling of services
Service providers may offer other Fintech and financial products and services along with cards. For example, cash management and current accounts are offered as a single service to buyers at a lower average price point. Adopting the bundling strategy can save up to 15% of the total category spend to buyers.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, resellers, and end-users.
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