My observations from the 2025 Commercial Payments International Middle Market Summit.
There’s an old temptation in banking: apply what works for your largest or smallest clients to the segment in between. The middle market, however, refuses to fit neatly into either mold.
That message came through loud and clear at the recent Commercial Payments International Middle Market Summit (CPI). Over 250 senior commercial card and payments leaders gathered to examine how banks can better serve this fast-evolving segment.
As the National Center for the Middle Market (NCMM) reports, the U.S. middle market is massive. It accounts for nearly 200,000 businesses employing roughly 48 million people and contributing a third of private sector GDP. These companies sit at a strategic inflection point: more stable than small businesses, more nimble than large corporates, and increasingly eager to optimize their financial workflows.
For commercial card issuers, this represents one of the most significant revenue opportunities in the coming years. With checks expected to plummet from one-third of B2B payment volume to just 10% by 2030, more than $8 trillion will shift toward modern methods like virtual cards. The issuers who crack the middle market code now stand to win big.
Virtual cards on the rise
Middle market businesses are ready for this change. They’re increasingly open to adopting new payment methods.
NCMM data shows virtual card use has jumped 35% over the past year alone, as businesses seek more flexible tools to manage cash conversion cycles, inventory, and payables.
Codat’s survey of 500 mid-market financial controllers reinforces this appetite, identifying the top drivers behind virtual card adoption as:
✅ Ease of use (37.2%)
⏱️ Time savings (35.4%)
🔒 Security features (33.2%)
💰 Cost savings (33%)
📊 Simplified reporting (32.6%)
💸 Rebates and cashback (32.4%)
Yet, while demand is growing, execution remains complicated.
The challenge: scaling virtual card programs effectively
The real hurdle isn’t convincing middle market businesses to embrace virtual cards. It’s rolling out programs in a way that meets their distinct needs and does so profitably.
What won’t work? Treating middle market businesses like large corporates. Traditional enterprise strategies like leveraging scale to negotiate payment acceleration/deceleration with suppliers fall flat here. Middle market firms typically lack the size and leverage to make these tactics effective, and their lower spend per supplier makes broad, resource-heavy campaigns less viable for issuers.
According to NCMM, 25% of middle market finance leaders rank customized financial solutions as their top banking priority. They expect advisory services and relationship-driven support that transcend the transactional, self-service experience designed for small businesses.
This is echoed by Codat’s findings: dedicated account management (30.6%), customer service and support (30.6%), and customized financial products and services (29.2%) all rank as critical factors influencing how middle market businesses choose their banking partners. These businesses want banks that understand their unique challenges and are willing to invest in tailored solutions to help them grow.
Why the middle market requires its own playbook
Winning in the middle market demands a tailored approach. One built on data, insights, and thoughtful execution.
Supplier enablement, one of the most talked-about topics at CPI this year, brings the issue into sharp relief. In our work with some of the world’s largest card issuers, Codat has seen a consistent pattern: the biggest roadblocks to growth in the middle market often trace back to a single source – poor data access and data quality. It’s a foundational issue that undermines everything from onboarding to relationship growth.
The visual below highlights several of the most common challenges and how data-driven solutions can address them:
Key takeaways from CPI panel discussions reinforced this need for better data-driven enablement. Speakers across multiple sessions shared examples illustrating how rich, real-time data is crucial for successful outcomes:
- Value beyond fees: Visa emphasized that showcasing benefits like fraud reduction, increased security, and enhanced collections could drive a 300 bps reduction in collections costs.
- Buyer engagement is critical: A top commercial card issuer underscored that engaged buyers deliver 25% higher supplier conversion rates. Enablement starts with activating internal champions, something only possible when issuers can accurately target and empower these buyers through actionable data insights.
- Addressing surcharging: One large merchant acquirer warned that surcharging trends are hurting supplier acceptance. They highlighted how better insights and buyer-funded models can mitigate these impacts, and how supplier education (when guided by the right data) can help preserve program volumes.
Rebate management is another area where data makes all the difference. I had the pleasure of speaking with Fifth Third and Bank of America on a panel discussing the challenges of evolving client needs and increasing rebate complexity, culminating in how banks can design smarter rebate programs.
The takeaway? The most effective programs are data-driven from start to finish.
By using data to identify high-opportunity spend categories, target the right supplier segments, and fine-tune offer structures, banks can deliver more compelling value propositions and drive greater adoption and retention.
Final thoughts
The middle market is not a compromise between large corporates and small businesses. It is its own unique, complex, and highly valuable segment.
Banks that recognize this and invest in building a middle market playbook, grounded in data and insights, will lead the next wave of growth in B2B payments.
The prize is clear. In the coming years, more than $8 trillion will move towards modern, easy-to-use payment methods, like virtual cards. That’s a massive revenue opportunity for card issuers, and the chance to become indispensable partners to businesses powering a third of the U.S. economy.
The banks who embrace this new middle-market mandate will be the ones who win.
How Codat helps
Codat gives commercial card issuers the real-time data they need to build programs that work for the middle market.
We help banks:
- Boost engagement and retention by spotting risks and growth opportunities early
- Identify high-potential buyers and suppliers using up-to-date spend data
- Accelerate onboarding and supplier activation with accurate financial insights
- Tailor value propositions based on each client’s goals and payment behavior
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