MastrCards commercial card business has been performing well in recent quarters, growing 20%-plus vs. market growth rates in the low teens since 2011. The company has signed a number of anchor partners in key geographies around the world (e.g., Bradesco in Brazil, Lloyds in the UK, China Everbright Bank in China), which it hopes to leverage as it advances in this large, still fairly untapped market. Although the T&E vertical within commercial card appears to be well penetrated, the B2B procurement business offers a vast multi-trillion payment opportunity.
MastrCards acceptance network is twice as large as American Express / AMEX (a leader in the commercial category), and we expect this to be a source of competitive advantage in the space. Importantly, commercial offers attractive transaction economics, and therefore, success in the category helps juice financial results for the overall company.
Commercial transactions are typically 126% higher in ticket size, have a 47% higher cross-border mix, and offer a 13% greater revenue yield than noncommercial transactions.
