Amex Opens Up Its Network To Fintechs

October 26, 2022
A new partnership between American Express and Cross River Bank will enable fintechs to offer Amex-branded credit cards to their customers.

A new partnership between American Express and Cross River Bank will enable fintechs to offer Amex-branded credit cards to their customers.

A new collaboration will enable Cross River, a fintech infrastructure and banking-as-a-service (BaaS) provider, to issue Amex credit cards on behalf of fintechs, Amex announced on Monday (October 24).

The partnership will give fintechs access to select Amex benefits and help them to innovate on the card network.

“With Cross River, we can offer more ways for fintechs to launch payment solutions on the American Express network,” William Stredwick, general manager of Global Network Services (GNS) North America at Amex, commented on the news.

Amex selected Cross River “for their full suite of products and services”, he added.

Although this is a big step for Cross River, Anthony Peculic, head of BaaS and cards, said the most exciting aspect “is the possibilities for the fintechs we support and the ripple effect of possibilities for cardholders”.

The collaboration will enable the fintech firm to offer its partners and customers access to a broader payment ecosystem and expanded optionality backed by Cross River’s compliant infrastructure, Adam Goller, EVP and head of fintech banking at Cross River, added.

Value proposition for Millennials

The announcement comes as the card network is trying to broaden its reach to new customers, particularly Millennial and Gen Z customers.

Millennials are often considered to drive fintech use, with Plaid estimating that around 95 percent of Millennials use fintech solutions. By enabling fintech customers to apply for an Amex card, the new partnership may further strengthen Amex’s position among this target age group.

Although historically Amex's main selling point to its merchants customers has been its upscale customer base, typically made up of higher net worth individuals and travellers, over the last several years the card network has increasingly sought to broaden its focus, including Millennials and Gen Z customers.

In February, Amex announced its first all-digital consumer checking account and rewards points for certain debit card purchases.

The checking account was a new addition to the company’s existing savings accounts and was intended to expand membership, in part to Gen Z and Millennials, who often use their debit card as a substitute for cash, according to the card network’s own research.

Later in October, San Fransisco-based fintech Cardless announced the launch of a new digital-first Amex card that consumers can use at retailers in certain malls. According to the company, the new product will add “great value that speaks strongly to the next generation of retail spenders”.

Amex's latest quarterly earnings, published on Friday (October 21), show that the new value propositions are playing well.

Millennials and Gen Z customers have become the fastest-growing demographic group on the card network and they comprised more than 60 percent of Amex’s consumer proprietary card acquisitions in the quarter.

Millennials and Gen Z spending on cards is also up by 39 percent compared with last year, while average US consumer spending grew only by 22 percent.

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