Discover announced their re-entry into the small business card market today; they left the business segment before the recession. Mercator projected their return when we covered the small business market earlier this year. We believe it is a high growth segment for the network and that discover will heighten competition, particular for the ultrasmall business market. It will be a while before Discover can address Fortune-500 companies, but for mainstream small business USA, this could be a home run. According to the US Census, 21 million Americans work at business with less than 20 employees.
The card looks competitive.
- “We’re looking forward to providing Discover’s unparalleled customer experience—from rewards, to security and customer service—to business owners so they can focus on the things that matter most, like serving their customers and growing their businesses.”
- The new card offers unlimited 1.5 percent cash back on all purchases, as well as free business and security features, all with no annual fee.
Competition is stiff with leading offers by American Express, Capital One, Chase and other top issuers which we cover in the small business report. We project card spend at almost $700 billion by 2022. Today, branded network cards carry $273 billion in small business spend and American Express services another $220 billion.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group