Small-business credit cards are uniquely primed for growth due to the similarities they share with both retail consumers and larger businesses.

Boston, MA, November 30, 2009 – A new report from Aite Group, LLC identifies the opportunity that exists for financial institutions interested in pursuing small-business credit cards. Based on a July 2009 Aite Group survey of 283 U.S. small businesses generating less than US$10 million in annual revenues, the report analyzes small businesses' current usage of credit cards, and discusses the opportunity for growth.

The U.S. small-business segment, comprised of more than 20 million businesses, represents a large opportunity for financial institutions. While most banks recognize this, the main challenges for many institutions are determining how to win business from this group, and which products will result in the greatest return on investment. Aite Group believes that small-business credit cards offer significant return to financial institutions. In fact, if small-business credit card spending increased from its current 4% market share to 14%, Aite Group estimates that interchange revenues from small-business credit card usage would increase more than 300%, or to more than US$10 billion.

"Small businesses have long fallen into a middle ground between retail and commercial banking," says Judson Murchie, analyst with Aite Group and author of this report. "While small businesses often mimic the personal banking habits of their owners, much of their payment behavior reflects their nature as a business, resulting in high check volumes. The increasing conversion of small-business check use to other payment vehicles is one of several reasons Aite Group believes small-business credit cards are primed for growth, and a definite opportunity for financial institutions."

This 34-page Impact Report contains 28 figures. Clients of Aite Group's Wholesale Banking service can download the report by clicking on the icon to the right.

Related Aite Group Research:

• Global Wholesale Payments Trends
• Insight Into the Online Banking Needs of Small Businesses
• The ROI of Small-Business Mobile Banking
• Procurement Cards: A Dormant Opportunity

To purchase this report or
for additional information,
please contact:
Aite Group Sales
Tel: +1.617.338.6050
sales@aitegroup.com