There is a common misconception that business credit cards are only for midsize to large businesses, as small business owners commonly use personal credit cards for their businesses. Furthermore, marketing for business cards has not traditionally been targeted at small business owners.

However, banks are starting to rethink that strategy. They see small businesses as essential for business card portfolio growth and are using innovative expense management tools to help attract small business customers.

To find out more about how business credit card management plays a role in driving business card portfolio growth, PaymentsJournal sat down with Surender Chuahan, VP Product Management at Fiserv and Brian Riley, Director of Credit Advisory Service at Mercator Advisory Group.

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Businesses’ Credit Cards as a Revenue Driver

Offering business credit cards represents an attractive revenue opportunity for financial institutions. The average ticket size of a business transaction is 2.4 times that of a consumer ticket.

Historically, financial institutions have focused on midsize to large businesses. Recently, the landscape has changed a lot with the gig economy in the picture, and we are seeing a huge growth of small businesses. As Chuahan noted, “there are 32.5 million small businesses in the US alone.”

Most of these small businesses need cash, liquidity, and lending. Arguably, the credit card is the best way to do that. Among other benefits, credit cards provide a grace period to make payments.

Research shows that many small business owners just use a personal Visa or Mastercard. This practice is convenient, but it also has drawbacks.

If you go through an IRS audit, you’re going to have to reveal all your [personal] purchasing habits to the IRS if they’re on your card. Having a separate business credit card for expenses keeps personal and business activities separate.

There are other drawbacks to using a personal credit card for business purposes. Chuahan described how it can be frustrating for employees who use their own credit cards for company purchases and then have to file for reimbursement through a cumbersome process.

“You don’t want to get stuck because there is somebody who’s waiting to ge...