Visa Commercial today released the global Commercial Consumption Expenditure (CCE) measurement for 2006 that shows steady growth in business and government spending worldwide.
Using the CCE index, a standardized metric to track business and government spending globally, Visa Commercial calculates global CCE in 2006 to be US$66.7 trillion, which represents an increase of 8.0 percent over 2005 expenditures of US $61.8 trillion.
The CCE index provides the global payment industry, including Visa and its member financial institutions, an unbiased and consistent way to monitor global business expenditures. The Visa CCE index includes all commercial spending with the exception of payroll and other select expenditures.
“Since its inception by Visa Commercial more than three years ago, the global Commercial Consumption Expenditure index has become the de facto metric for tracking business and government spending and the continued transition to electronic payment systems, including the full suite of Visa Commercial products and services,” said Aliza Knox, senior vice president, Visa Commercial, Visa International. “Updated every year, the global CCE index benefits the entire financial services industry by providing an unbiased and consistent way to monitor global commercial expenditures and identifies new growth opportunities for our stakeholders by measuring the traction of various payment types with corporate and government entities.”
Commenting on the latest CCE results, Kamran Siddiqi, General Manager for Visa International CEMEA in the Middle East said: “The increase in commercial spending globally, according to the CCE global index, benefits the financial industry as a whole and the results for the CEMEA (Central Europe, Middle East and Africa) region of US$4.5 trillion are significant. For Visa and its member financial institutions, both globally and regionally, this positive data provides useful insight into the growing commercial sector and will help us to provide innovative and customised payment products which meet the differing needs of this sector.”
“The pace at which the region is developing is giving rise to increased commercial activity, with increased numbers of small to medium enterprises in operation. These businesses are seeking payment solutions which will provide an easy, convenient way to purchase goods and services as well as manage business expenditure. Visa can meet the needs of this important sector through its portfolio of commercial products,” continued Siddiqi.
As part of its global efforts to promote the use of commercial cards - the benefits to the small business segment and the opportunities which lie ahead for banks offering commercial electronic payment solutions - Visa is conducting forums across the globe to highlight their benefits to banks. In the GCC, Visa Commercial has recently held such forums for local and regional banks including Kuwait and the UAE.
CCE Methodology
Utilizing methodology developed in-house by Visa and unveiled in 2004, CCE draws upon government data using methods similar to those employed for the Personal Consumption Expenditure (PCE) index, which monitors consumer-related spending. Global CCE is measured using four key data elements: the amount of business-to-business purchases to acquire goods and services used in production; wholesale and retail purchases of final goods; some business capital expenditures; and government spending on goods and services. Adjustments were made to exclude capitalized expenditures, such as construction and durable defense spending. The calculations measure transactions at basic prices, which include taxes (less subsidies) on production. Retroactive adjustments are made to account for any revisions in officially published statistics and economic data in current and previous years. Many types of transactions included in CCE can be captured on a variety of Visa products including Visa Corporate, Visa Purchasing, Visa Business, and Visa Fleet.
Commercial Expenditure Regional Breakdown
The overall 2006 measurement for electronic and paper-based business and government spending within Visa’s six global regions breaks down as follows:
Region 2005 2006
Europe US$21.2 trillion US$22.5 trillion
United States US$16.2 trillion US$17.3 trillion
Asia Pacific US$15.9 trillion US$17.0 trillion
Central/Eastern Europe, Middle East and Africa US$3.9 trillion US$4.5 trillion
Latin America/Caribbean: US$2.9 trillion US$3.4 trillion
Canada US$1.7 trillion US$2.0 trillion
Total Global CCE US$61.8 trillion US$66.7 trillion
Visa Commercial provides payment products with information management and services designed to help businesses and government achieve greater efficiency, control and convenience. The global CCE index establishes a valuable baseline for measuring segment penetration growth and effectiveness for Visa and its member financial institutions.
Visa will continue to provide global CCE measurements annually.
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Notes to Editors:
Complementary CCE Analysis Available: Today Visa USA is providing a detailed segmentation analysis of commercial spending in the US market broken down by small, mid-sized and large companies, and government agencies associated with the release of the latest global CCE data. For more information, please visit the newsroom at www.usa.visa.com. In April, Visa Europe plans to provide a localized version of the CCE announcement containing data specific to their region. For more information, please visit their press and media site at www.visaeurope.com.
About Visa Commercial: Visa Commercial payment solutions — Visa Business, Visa Corporate and Visa Purchasing — combine payment with information to create intelligent payment solutions that are designed to enable business and government organizations of any size and type to reduce costs, streamline operational and payment processes, and make more informed business decisions. Backed by Visa's unsurpassed acceptance, Visa Commercial products and services are designed to provide a complete way to manage payment-related processes, including travel and entertainment and procurement expenditures, payroll distribution, and information management. For more information, visit www.visa.com/visacommercial.
About Visa: Visa connects cardholders, merchants and financial institutions through the world's largest electronic payments network. Visa products allow buyers and sellers to conduct commerce with ease and confidence in both the physical and virtual worlds. Visa is committed to the sustained growth of electronic payment systems to support the needs of all stakeholders and to drive economic growth. Visa products currently generate more than $4 trillion in sales volume worldwide. Visa enjoys unsurpassed acceptance around the world. In addition, Visa/Plus is one of the world’s largest global ATM networks, offering cash access in local currency in over 170 countries. For more information, visit www.corporate.visa.com.
Contact: Sabine Middlemass, Visa International, Tel: +1 650 432 8307 / Cell: +1 650 533 4106 globalmedia@visa.com or Carolyn Krytzer, Burson-Marsteller, Tel: +1 415 591 4022 at carolyn.krytzer@bm.com.
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Camilla d’Abo, d’Events - Tel: +971 4 3311104 Email: Camilla@devents.ae
