By the end of Q2, spending on Visa Business Cards, which are designed for small businesses, saw a return to pre-September levels. In June 2009 a record number of transactions were made on Visa Business Cards, up 19% on the previous year. The amount spent was also up 11% year-on-year in June 2009.
Two spending categories in particular have seen large increases in recent months according to Visa’s data. These are:
* Temporary Staff Recruitment: After falling 22% between Q3 and Q4 in 2008, and a further 17% in Q1, the value of payments on Visa Business Cards bounced back 23% in Q2 2009. Overall the number of transactions made on Visa Business Cards for temporary staff recruitment increased 72% in Q2 compared to Q1
* Travel Agency spend: Whilst travel has been widely reported as one of the sectors hit hardest by the recession, the number of transactions made on Visa Business Cards increased 10% year-on- year in June 2009. After a trend of decline in the value of payments of 26% between Q3 and Q4 2008 there was a pick up of 5% in Q1 and more marked increase of 13% in Q2
Interestingly, although payments to travel agents are increasing, travel and accommodation continue to be areas where small businesses are tightly controlling budgets. The number of Visa Business Card transactions made on air travel has returned to pre-October levels but the value of those transactions has stayed much lower – on average 3% lower in Q1 and Q2 2009 compared to the same period in 2008. The pattern is similar for hotel & accommodation expenditure but the value of transactions has declined much further – on average 19% lower during the first half of the year.
Other categories which continue to be a focus for cost cutting are Printing and Advertising; and Computer Equipment & Services. During January – June 2009, they remained respectively on average 27% and 11% below the same period during 2008 in terms of the value of transactions.
Nigel Eaton, Vice President, Visa Commercial said: “It’s too early to talk about a recovery in the small business economy but the last quarter has seen a marked reversal of the downward trend in spending. Whilst businesses are still aiming to cut costs wherever possible, uncertainty about the rest of 2009 is having a strategic impact on some areas of spending – for example a surge in recruiting for the short rather than long-term.
“Meanwhile, businesses are looking to take advantage of the benefits of cards such as helping to track and control cash flow and protect against potential losses when ordering goods and services which later on may not be received. This may also be one of the reasons the use of travel agents who can also help with managing costs, appears to be more popular.
“Businesses are seeking more secure, convenient, and quick to use payment options that allow them to plan, pay online, and control their business spending over the short and medium term. Visa Business Cards offer a number of ways to do this including debit, prepaid and interest-free charge cards”.
www.ukba.co.uk
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