Commercial Consumption Expenditure

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Visa Commercial and a team of internal Visa research and economic experts created a financial metric that standardizes how business and government spending is tracked globally. Called the Commercial Consumption Expenditure (CCE) index, the metric enables the financial industry to measure penetration of commercial payments products.

How CCE works
The index draws upon government data, using a methodology similar to that employed for calculating the Personal Consumption Expenditure (PCE) index, which measures consumer spending. The global CCE is estimated using four key data elements: the amount of business-to-business purchases to acquire goods and services used in production (called intermediate inputs); wholesale and retail purchases of final goods; some private fixed investment; and government spending on goods and services.

How CCE can be used
The CCE index is the first financial metric in the payments industry to standardize how business and government spending is tracked globally. It allows the payment industry, including Visa, to measure the penetration of commercial expenditures in an unbiased and consistent manner. CCE uses historic and current statistics.

The types of payment transactions represented in CCE can be captured on a variety of Visa Commercial products including Visa Corporate, Visa Purchasing, Visa Business and Visa Fleet.

Note: Adjustments are made for capitalized expenditures, such as construction and durable defense spending, and the calculations for all countries include transactions at basic prices, which include taxes on production. Retroactive adjustments are made regularly as needed due to revisions in officially published statistics and economic data for current and prior years.

Calculation Methodology
The calculation estimates Commercial Consumption Expenditure (CCE) by capturing business to business purchases to acquire goods and services used in production, wholesale and retail purchases of final goods, business capital expenditures and government spending on goods and services. Adjustments are made for capitalized expenditures such as construction and durable defense spending.

The CCE for OECD Countries, China, India, Russia and Brazil was calculated using a standard methodology developed by Visa. The calculation for all countries includes transactions at basic prices, which include taxes on production. Based on recognized, government-sourced metrics, such as gross domestic product (GDP), CCE offers an unbiased and consistent way of measuring global business expenditures. Retroactive adjustments are made regularly as needed due to revisions in officially published statistics and economic data for current and prior years.

A variety of data sources were employed in the calculation of global CCE. Data for Organization for Economic Co-operation and Development (OECD) member countries was provided by the OECD, while data published by the governments of China, India, Russia, and Brazil was used for those countries.

For countries in which data was unavailable, CCE was estimated using a model developed by the Economist Intelligence Unit. In these particular countries, where intermediate inputs were available, CCE was estimated based on the proportion of intermediate inputs to total CCE observed for the OECD member countries. Where intermediate inputs were not available, CCE was estimated on the basis of GDP, measured in U.S. dollars/nominal terms and GDP per capita.

The Economist Intelligence Unit1 performed all calculations and modeling, except for those pertaining to the United States, which was performed by Visa USA with forecast data from Moody's Economy.com.