Amex takes aim at card startups through founder perks

American Express

American Express is courting founders with corporate card perks on an invitation-only basis.

According to Courtney Kelso, senior vice president and general manager of commercial card products at Amex, the new benefits will appeal to founders who want to grow their businesses.

In addition, with tailored benefits, Amex is offering startups an element of exclusivity that rivals the best of premiere card programs. Amex is pitching startups a distinctive set of rewards, including access to Dropbox Business, Snapchat ad credits and access to Centurion lounges at airports.

With the new benefits, Amex is entering into a field with nascent competitors like card startups Brex, Extend and others. It’s also competing with digital-only banks such as Revolut and N26, which seek to differentiate through perks like lounge access, use of co-working spaces as well as software and ad credits. American Express’ value proposition is the rich roster of benefits and the capacity to grow loyalty points over time.

According to the company, after speaking with startup founders about what rewards could help their companies, it noticed that cloud services and advertising perks were in high demand. Amex’s long history of reward benefits programs puts it ahead of competitors, Kelso noted.

“We’ve been supporting small businesses for decades with our small business cards,” Kelso said. “It’s time to sharpen [the products] even further and create a unique and bespoke way to help [founders] grow their business.”

Rewards are an important customer acquisition driver for Amex and a data play. For example, startups receive lines of credit based on their funding levels and other underwriting factors, such as how quickly the company is growing, along with cash flow data from business bank accounts. Startups must voluntarily give this data to Amex and the lines of credit will be available through the card. 

The company plans to open the program up more broadly in the coming months. Because the credit lines are tied to business bank accounts, founders won’t have to worry about effects on their personal credit scores.

Ted Rossman, an industry analyst at CreditCards.com, said Brex might have better perks for founders, but Amex still has certain advantages over upstart competitors. “The main downsides to Brex are that you have to make an exclusive commitment to them, and they don’t have the same name recognition as Amex,” he said. “Many business people would be more comfortable plunking down an Amex if they want to impress clients.”

The startup program is one component of a broader overhaul to Amex’s corporate card program. Corporate cardholders now get extra rewards points when they use their corporate card with Uber, along with credit for CLEAR, the biometrics security company that fast-tracks customers through airports. Amex also is expanding its partnership with Hilton Honors, offering corporate cardholders additional rewards when they use their card with the hotel chain. The CLEAR and Hilton benefits roll out in November and the Uber benefits will launch in December. 

See also: Amex and Mastercard Zeroing In on Businesses with New Partnerships

Amex’s new corporate perks are the latest in a string of recent moves by Amex to improve offerings to business clients. In February, the company partnered with Bill.com to provide a better accounts payable experience for business clients, and in August, Amex acquired business-to-business lending company Acompay. 

According to Jim Miller, vice president of banking and credit card practice at J.D. Power, what makes Amex stand out against competitors is its resilience as a brand. “Some of the newer competitors in this market have yet to go through a recession. American Express has a diversified business, has experienced many business cycles and understands the risks of lending to businesses of all sizes,” he said.

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