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Despite the economic downturn, significant growth opportunities loom in the small-business credit card sector, a new Aite Group report suggests. For its report "Small-Business Credit Cards: An Opportunity for All," the consulting firm in July conducted an online survey of 283 U.S.-based small businesses with less than $10 million in annual revenues. The nation's 20 million small businesses generate $4.8 trillion annually, or 23.8% of all commercial spending, but credit cards account for only about 4% of business-to-business transactions among small businesses, the report says. Checks account for about 65% of small-business transactions, while cash and other types of payments comprise 31% of transactions. Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. together account for an estimated 36% of all small-business credit card spending, while American Express Co. accounts for 38% and other banks, including regional and community institutions and credit unions, account for the remaining 26% share, Aite says. Some 72% of small-business owners surveyed said credit cards are "easier and more secure" than are cash or check payments, while 58% said they prefer credit cards to other instruments for paying bills. Some 31% of respondents said they routinely use credit cards to make online purchases. And 14% of respondents said they use credit cards instead of other payment instruments to accumulate reward points. Only 9% said they routinely use credit cards to defer payments.
