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March 14, 2023 | By Audrey Bui Khac, vice president, small and medium enterprises segment

Small businesses are one of the most underserved segments in a bank's customer base. And credit cards are one area where banks have really struggled to connect with small businesses. Indeed, 59% of small businesses in Australia still use their personal credit card for business expenses.

Increasing the use of commercial payment products by small businesses can generate incremental revenue for the bank and give small businesses a payment product more tailored to their needs, according to a Mastercard study conducted in Australia.

It will take a personalized approach to increase the profitability of banks’ small business portfolios and drive incremental credit card usage. Not all small business cardholders have the same spend uplift potential. Nor will they react to the same messages. Considering the variety of small business profiles, one-size-fits-all customer engagement strategies are even less relevant than they are with consumers. Personalization is not only required to address specific expectations of small businesses, but it can also maximize the ROI of banks’ marketing campaigns.

To help banks build personalized approaches to engage with their business customers, Mastercard developed a new set of analytics (propensity models) and marketing capabilities that enable financial institutions to prioritize small businesses with the highest likelihood to respond to spend stimulation invitations.

After running these models in the Australian market, we estimate that about 32% of small business credit cards in the market represent an immediate opportunity to increase spending and bring potential additional value for banks and small businesses. Banks have a strong incentive to stimulate small businesses to spend on business credit cards. But what are the right strategies and recommendations to spark small businesses to use business cards? That’s where insights and the right engagement strategy play a role.

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Audrey Bui Khac headshot
Audrey Bui Khac Vice president, small and medium enterprises segment

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