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01/12/2009 -
Despite positive performance throughout the beginning of the economic downturn, small business credit card processing may take a dip in 2009 before rebounding in 2010, according to a report from payment processing and banking research firm Mercator Advisory Group.The report found that the small business credit card market grew in 2008, despite the major downturn in the fourth quarter, but that the weak economy will drag down business credit card purchase volumes by the end of 2009.
However, as evidenced by JP Morgan Chase's new line of small business credit cards and a renewed focus on credit card offerings by American Express, 2010 will likely bring a comeback for credit card processing, said Mercator.
"The road ahead is certainly uneven, and as an industry, we are in new territory," said Ken Paterson, vice president for research operations at Mercator Advisory Group and the primary author of the report. "But in the end, small business credit cards, the dominant lending vehicle to firms with fewer than 100 employees, will be key to fueling the recovery."
This trend of renewed interest in credit cards may already be underway, as evidenced by a recent study from Mintel Comperemedia which found that in the U.S. in October, mailed credit card offers reached their highest monthly total since December 2008.
