Small business owners increasingly expect their financial institution to provide more than credit products. They want a complete banking relationship that includes checking accounts, payment tools, debit cards, cash management features, and digital banking services. American Express took a significant step in that direction when it launched its first business checking account and Amex-issued debit card, expanding beyond its traditional role as a credit card provider. The move reflected a broader shift in small business banking, where companies are looking for integrated financial solutions from a single provider.
American Express launched a new card today. Normally this would be news, but today’s announcement is particularly interesting as it’s a proprietary debit card issued in the U.S., associated with a small business checking account. American Express has experience with debit cards, but this is the first-ever Amex-issued debit card. The American Banker reported:
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,” Dean Henry, Amex’s executive vice president of global commercial services, said in an interview.
Customers will receive a contactless Amex-branded debit card connected to the account within a few days of enrollment, he said.
American Express has spent recent years making technological upgrades to its network to support its debit card, Henry said.
Deposits for the checking accounts will be held by American Express National Bank, which Amex established 13 years ago as a way to stabilize the company’s funding during the recession.
“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.
Signing up for Amex’s checking account takes about 10 minutes through a streamlined process where existing Amex credit card users’ account data is automatically populated within the application, Henry said.
Prospective customers can sign up online or download the Amex Business Checking app for iOS. Android support will eventually follow, he said.
The product description on their website indicates American Express is going all out to attract new customer with some compelling benefits including:
- $300 deposit with qualifying activities
- 1.1% APY‡ on balances up to $500k
- No monthly maintenance fees
- The debit card is fee-free at participating ATMs
- ACH transactions are free
- A bill pay solution is included
If this goes well for American Express, they may want to consider their prospects in the consumer debit market.
The launch of American Express Business Checking marked an important milestone in the evolution of small business banking. By combining a business checking account, digital banking tools, rewards, and a business debit card under a single brand, American Express positioned itself to compete more directly with traditional banks and fintech providers. As small businesses continue to seek streamlined financial management tools, integrated business banking solutions are likely to remain a key area of competition and innovation.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
