For decades, corporate purchasing cards were a stodgy and slow-moving sector of payments. Traditional top bank card issuers like American Express, Citibank, and Chase dominated the space alongside super-regional players like US Bank. In 2017, with the founding of Brex, a new era of corporate card innovation was launched. 

Six years on, the question is: Has fintech remade the corporate card?

Loads of funding and niches

Today, there are dozens of corporate card specialists. There are cards for truckers, cards for dentists, and so many more. In Julie’s 2020 Bloomberg article, “New Tech Startups Want to Remake the Corporate Card” she profiled Brex, Divvy, and Ramp. Each remains a major player in the fintech-enabled corporate card space, with the recent addition of Navan (formerly TripActions) and its Liquid Expense platform. For many companies, traditional bank issuers remain key players as well.

Massive amounts of investment (both debt and equity) have funded these key players, and the first round of acquisitions has already impacted the segment. Brex alone has raised $1.5B in capital. Ramp follows closely with $1.4B raised. Divvy raised $417M prior to being acquired by Bill.com for $2.5B in cash and stock in 2021. Despite its late entry into the card space, Navan has raised a total of more than $2.2B. 

Total Payment Volume

Yet, even with the combined $5B+ in investments, not a single one of these companies registers as a top 10 corporate card issuer, according to industry research leader Nilson. The issuers of these cards such as Sutton Bank, Emigrant Bank, and other fintech sponsor banks don’t appear in Nilson’s ranking list of top commercial card issuers. Startup card stalwart Silicon Valley Bank only clocked in at number 20 with $7.7B in volume in 2021. We expect the upstarts to grow in ranking. By email, Brex, Ramp and Divvy stated their annual total payments volume (TPV) exceeds $10B which probably places the companies in between positions 15 and 20. It’s clear these programs are growing, but there is a long way to go. Number 10 issuer Comerica Bank processes more than $32B in TPV each year.

Total payment volume metrics aside; these growing card programs are providing unique user experiences and winning wallet share for startups and small businesses, with a continued push towards gaining share with enterprises. In the payment realm, there are key differences between traditional procurement cards used by major corporations and cards for smaller businesses. A small business card like a Chase Ink or a Capital One Spark card is issued to a business and secured by the business owner’s personal credit. In many ways, these cards look and act similarly to a consumer revolving card. In the corporate card space, the cards are secured by the business’s revenue and credit itself, and often operate on a charge card basis - meaning the bill must be paid in full each period, with no revolving lending capabilities.

For small and unproven businesses, especially startups, the ability to access a high level of credit for ongoing payments without a personal guarantee is very appealing and was part of the initial appeal for companies like Brex. Today, the software layer provided as a part of the card program is a key differentiator.