American Express is rolling out a digital checking account for small businesses that comes with the card network's first U.S. debit card and pays a 1.1% interest rate.
The Amex Business Checking app launches Thursday, and by early next year Amex credit card users will gain the option to convert their Amex Membership Rewards loyalty points to cash within the app, the New York card network announced.
"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.
The move demonstrates how Amex is using digital technology to modernize its legacy small-business credit cards, while expanding the product’s utility in an effort to attract new customers.
"We expect this product will appeal to a lot of existing and net-new customers," Henry said. The company is offering a $300 sign-up bonus to new and existing customers; Henry declined to say how long the sign-up bonus will be available.
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.
Amex's new checking account has no monthly maintenance fee or minimum balance requirement and offers a 1.1% interest rate. Paper checks are 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.
Amex’s Business Checking account marks the first proprietary debit card Amex has issued in the U.S. The company has debit products through bank partnerships in countries such as South Africa, South Korea and Georgia, Henry said.
