American Express officially launched its digital checking for businesses on Thursday, designed for small and mid-sized (SME) businesses with the option to receive a business debit card – Amex’s first ever debit option, according to Bloomberg.
The AmEx Business Checking application will allow credit card users to convert membership rewards points to cash. Once enrolled, customers will receive their debit card within a few days.
“Checking accounts are essential to small-business owners, and to deepen our relationships with our customers we’re now giving them a checking account so they don’t have to go to another bank for that,” AmEx EVP of global commercial services Dean Henry told American Banker.
Checking account deposits will be held by American Express National Bank, with the account having no monthly maintenance fee or minimum balance requirement, and a 1.1% interest rate. The account is set to include a $300 cash bonus for new users.
While the new application is available for iOS, with Android support expected to follow soon, paper checks will also be available upon request.
“This is a full-service checking account so although we expect many people will be using its digital features, paper checks are still a part of the product,” Henry said.
In tandem with the product launch, American Express released its Amex Trendex survey today, which found that 48% of U.S. consumers agree they started their holiday shopping earlier, citing supply chain issues and shortages.
Approximately 75% of consumers surveyed also agree that shopping in-person at a small business brings them joy and excitement for the holidays, and 67% agreed that they are looking for offers and deals through their credit card when shopping for the holidays. 57% said they plan to use their credit card points for holiday shopping.
It will be interesting to see the adoption of AmEx’s business checking account, especially in blue collar industries and younger populations. AmEx recently stated that card acquisitions hit a record level in the third quarter for US small-business and consumer Platinum and Gold cards, according to the Wall Street Journal.
AmEx is already the largest provider of small-business credit cards in the U.S., and this move looks like part of a larger goal to capture customer’s business needs.
The company noted that goods-and-services spending by global SME’s in the third quarter rose 21% compared to 21%, and that millennial and Gen Z consumer spending was up 38% in the quarter compared to 2019 as well.
“The competitive landscape and its expansion of digital financial tools made it somewhat easy for us to introduce a checking account, and given our role as the largest issuer of small-business cards, we think we have a lot of room to grow here,” Henry said.
In other recent fintech news, Bill.com partnered with Marqeta, putting a squeeze on Ramp following comments they planned to focus on Bill.com customers. Polly also is working to speed up loan originations with its new Blend Integration.