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Credit Card Companies Pursuing Small Businesses

Discover is rolling out a new credit card today that will offer high frequent-flier miles rewards and few restrictions to small business owners. MasterCard and Visa are also targeting small businesses -- and for good reason. Less than 5% of the $4.9 trillion that small-business owners spent in 2006 was with the aid of a credit or debit card, according to Visa USA research.

The competitions is checks, says Raghav Lal, senior vice president of small-business products for Visa USA. "That's what we are trying to dislodge from the small-business owner's wallet."

Discover's new products, its first commercial cards ever, come with checks that allow small-business owners to pay vendors, the majority of whom don't accept credit cards, by tapping their Discover credit. Visa, offers a similar program.

MasterCard, which has offered a small-business card for years, last year launched its first industry-specific card -- one for construction companies that allows longer payment cycles. Visa, which says its small-business card sales jumped 32% to $103.5 billion in the 12 months ended June 30, recently added its third small-business card product. It has a higher spending limit of $25,000.

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