Citizens Debuts First Card Out of Mastercard’s Middle Market Accelerator Program

Citizens Bank has launched a new commercial card in partnership with Mastercard that’s aimed at helping middle market companies grow their businesses.

The card, callerd Citizens Edge, is the first commercial credit card to come out of Mastercard’s middle market accelerator initiative, which links middle market businesses with solutions that can help them grow and optimize their operations.

Mastercard earlier this year rolled out its accelerator program, which focuses in part on lower middle market businesses defined as those with approximately 50-250 employees and between $10 million and $100 million in annual revenues. 

The new product from Citizens provides credit card issuers with an example of what a payment tool that targets the unique business needs of mid-sized firms can look like.

Middle market companies may not always be the focus of new product development programs. But issuers shouldn’t overlook this segment of the market.

Middle market companies may not have access to tools larger enterprises use to help manage their money.

In the U.S., middle market businesses account for $6 trillion of B2B spending and one-third of gross domestic product, according to the Citizens press release.

The bank said in its release that middle market companies can lack access to the more sophisticated tools that bigger enterprises use to manage their finances.

“Growth-stage companies want scalable credit that offers speed, ease of integration, and control,” Michael Cummins, Head of Treasury Solutions at Citizens, said in the release. “Citizens Edge delivers all three, helping middle market companies manage payments, expenses, travel booking, and cash flow more effectively, while earning top rewards.”

Credit card issuers that don’t have middle market companies on their radars can turn to research to get up to speed on the ins and outs of what businesses in that segment are looking for in terms of payments solutions.

Mastercard released a study that looks at the opportunities middle market companies can bring to businesses that design solutions for them. The payments leader interviewed nearly 300 executives at middle market companies as well as leaders from top credit card issuers to inform its findings.

The study reveals that the U.S. is home to 275,000 companies Mastercard classifies as middle market. The card network considers 80% of those businesses to be lower middle market companies. 

“These companies generate $5.4 trillion in annual revenue and represent a total addressable card market of $334 billion,” the study’s authors wrote. “In addition, these companies represent one of the most profitable segments for issuers.”

Credit card issuers that overlook this group may be missing out on serving businesses that are just waiting for the right financial provider to knock on their doors.

Nearly 64% of companies in the lower middle market category have one primary relationship with a financial institution while also working with two or three other banks, Mastercard reports.

The study reveals that many of these businesses maintain relationships with multiple banks because they aren’t able to get everything they need from a single financial provider.

But 40% of lower midmarket businesses are likely to switch to another financial provider if that institution can offer them services that better suit their operations.

Lower middle market companies desire commercial credit card providers that offer them card limits that not only give them enough room to grow but also adapt to their needs as they expand, Mastercard indicated in its study.

They also desire integrated spend management solutions, virtual cards, and personalized customer support.

When it comes to rewards, lower middle market outfits have a greater preference for cash back than other perks.

Credit card fraud remains a significant problem in the U.S., and Mastercard reports that lower middle market businesses seek card providers that are dedicated to security and reducing fraud.

Fall is proving to be a busy season in the business credit card arena. The new card from Citizens hits the market just days after Truist became the first super-regional institution to launch a Visa Business Infinite product.

Truist has geared its new product toward small businesses that desire a premium credit card, but the market it’s going after will likely overlap at least in part with the group Citizens seeks to serve with its new card.

Given the relationship between Mastercard and Citizens, it isn’t surprising that Citizens Edge offers many of the features and benefits that Mastercard identified in its study as being important to middle market companies.

The Citizens Edge card includes flexible credit limits that can help businesses scale, cash back rewards, and a virtual card option that aims to mitigate fraud, according to the company’s press release. 

Partner-company Navan powers expense management and travel booking capabilities for Citizens Edge, and the bank promises around-the-clock, personalized support for cardholders.

Citizens Edge offers businesses features including cash back rewards and flexible credit limits.

Citizens brings business cardholders tools to help them administer their card programs, including a self-serve digital solution that allows them to keep an eye on card spending in their organization and access reporting on a single platform.

The card also connects cardholders with value-added services from Mastercard, such as a tool offering protection from identity theft.

Issuers that take advantage of services that partners extend to them may be able to increase the value of their card programs in the eyes of cardholders. 

In the press release covering Citizens Edge, Ginger Siegel, North America Lead for Small and Medium Business at Mastercard, stressed the importance of the card network’s partnership with Citizens in meeting the needs of middle market companies.

“Together, we are bringing forward the tools, technology, and innovation that help businesses access flexible solutions they need to scale with confidence, streamline operations, and safeguard their future,” Siegel said.