AmEx launches debit card into war for small business customers

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(Bloomberg) – American Express Co. has unveiled its first-ever debit card as competition for small businesses intensifies.

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The card will be part of a new digital business checking account, New York-based AmEx said in a statement on Thursday. While other banks have long used AmEx’s network for their own debit cards, this is the first time the payments giant has issued a debit card itself.

“Our small business customers have emerged strong from the pandemic,” said Anna Marrs, president of the AmEx group of global business services, in an interview. “The debit card is also an opportunity for us to deepen our relationship with customers and get another product in their portfolio. “

The checking account should be accompanied by a cash bonus of $ 300 for new users of the account and an annual return percentage of 1.1%. Starting next year, customers of the product will also be able to earn AmEx membership reward points and redeem them for deposits to their accounts.

Throughout the pandemic, spending by small and medium-sized businesses – or those with annual revenue of less than $ 300 million – has been a surprising bright spot for AmEx, which has seen the overall volumes of its network suffer amid travel restrictions during the Covid -19 pandemic. That’s because those business customers are mostly found in industries that thrived during the pandemic, such as construction, professional services and healthcare, AmEx said.

The company is already the largest provider of small business credit cards in the United States. AmEx is looking to capture more of these clients’ business in the hopes of becoming a one-stop-shop for all of their financial needs.

As part of the push, the company launched its very first checking account in June and said it would start offering up to $ 150,000 in lines of credit to existing small business customers. The card giant followed suit with another announcement earlier this month that it would add new rewards to its Platinum card for business owners, including extra points for spending on items such as cloud services, building materials and shipping.

“Given the strength of our brand and our clients’ affinity with AmEx, they have told us over the years that we have permission to do more,” said Marrs. “Small businesses have been very clear about what they expect from their existing checking accounts. They wanted more.

A slew of startups with names like Ramp, Brex and Divvy have sought to capture much of small business banking in recent years, raising huge sums from venture capital firms and securing high valuations. AmEx itself got into the fintech frenzy when it bought online small business lender Kabbage late last year.

“I’m not going to overlook any of these – Ramp or Brex or Divvy. We never put anyone down, ”AmEx chief executive Steve Squeri said on a conference call with analysts last week. But with AmEx’s track record and some of its new capabilities, he said, the company believes it is “in a very good position to continue to compete in this space, to keep growing and to keep winning.”

AmEx shares slipped 0.3% to $ 177.43 at 9:37 a.m. in New York. They have gained 47% this year, more than the 36% increase in the S&P 500 Financials Index.

(Updates with the share price in the last paragraph.)

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