Amex Targets Startups With Bank-Linked Cards

American Express is introducing a suite of new commercial card products targeted at startups and entrepreneurs in a move that is aimed at competing with industry newcomers like Brex, Bloomberg reports said on Thursday (Oct. 17).

According to reports, American Express plans to roll out the new cards in the coming months, targeting startup owners with an offering that does not require them to offer a personal guarantee or security deposit. Dubbed the Corporate Program for Startups, the new cards will integrate with a range of services to support expense management while offering startups “dynamic” spending capacity that adjusts based on a company’s bank account, the company said in an announcement.

American Express will have access to the business owner’s bank account data – which, according to American Express President of Global Commercial Services Anna Marrs, will enable the company to provide card products to startups that normally would not have a strong enough financial footing to obtain one.

“It’s a new data source and a new lens on underwriting,” Marrs told the publication. “We acknowledge that for a younger company, with a younger set of founders, the traditional corporate program wasn’t meeting their needs.”

American Express currently stands as the globe’s largest commercial card issuer by spend, reports noted, and the company is pushing for an even greater position in the B2B payments market. But competition is on the rise, too, as Visa, Mastercard and other credit card giants similarly expand their B2B payments offerings.

At the same time, industry newcomers like Brex, which has now reached a $2.6 billion valuation, are stepping in to offer commercial cards and other financial services to startups struggling to obtain such products and services from traditional incumbents.

Amex’s Marrs added that friction in the corporate spend space means the industry is ripe for innovation. “Business-to-business payment offerings feel too clunky,” she said. “There’s no one on the planet who gets excited about filing an expense report.”

Reports noted that American Express will continue to expand its commercial card footprint, with Chief Executive Officer Steve Squeri naming the market segment as an important growth strategy for the firm when he took up the position last year.