Fintechs in sectors like ride-sharing and food delivery increasingly offer their own credit and debit cards leveraging Visa and Mastercard’s digital rails, and now American Express wants a piece of that action.
One problem has been creating on-ramps for fintechs to easily issue Amex cards, but the card network hopes to solve that through a new partnership with i2c, Amex announced on Thursday.
Redwood City, California-based i2c operates a digital card platform that competes with rivals like Marqeta and Galileo, enabling fintechs to quickly craft payment card programs at a pace Amex has previously been unable to match.
“With i2c, we’re slashing the time for a company of any size that wants to issue cards riding on our network,” Mohammed Badi, Amex’s global network services president, said in an interview.
Competition in digital card issuance is fierce, with companies like Uber and DoorDash already entrenched with their own debit and credit cards. But Amex hopes to grab a bigger share of fintechs' card spending by making its card perks available to all types of startups using its network, beginning with Amex Offers, early ticket access and dining reservations through Amex’s Resy service, Badi said.
“The gig economy is still expanding and with the ongoing expansion of services in emerging markets and the U.S., we’re getting interest from a number of fintechs that would like Amex card perks to set themselves apart,” Badi said.
Fintechs that offer Amex cards could provide any of these card perks, he said. And working with i2c, Amex will be able to customize card-acceptance programs using data it gets through its merchant relationships.
“We can capture data at the point of sale through our role as an acquirer that isn’t available to other card networks, including insights in consumer habits,” Badi said.
Fintechs that don’t already offer cards would need to line up a BIN-sponsor partnership with a bank to get on Amex's network through i2c, and neobanks could connect directly to Amex through i2c, he said.
Amex has already tested the path for rapidly enabling fintechs to issue its cards via i2c through integrations with a handful of neobanks and with some fintechs and banks in Latin America and the Caribbean, according to Badi.
One example is Keo, a fintech that operates across Latin America. Keo last year launched an Amex card in Mexico through a rapid underwriting process via i2c’s platform.
Amex and i2c also worked together recently to launch the Black American Express card for Puerto Rican bank Bancredito's high-net-worth customers. Amex is also working with i2c to launch the Covalto American Express Card via Credijusto in Mexico.
Same-day and real-time payment products are designed for basic transfers that don't meet the more complex needs of Lyft's ride-sharing service, contends Ashwin Raj, Lyft's vice president of payments.
While working together on these various initiatives over the last couple of years, Amex and i2c pre-certified one another’s payment systems to streamline connections, which led to establishing a partnership, according to Badi.
“After doing a series of one-off deals, we realized it made sense to formalize our partnership as we prepare to expand similar solutions to the U.S. and other global markets,” Badi said.
In addition to gig-economy fintechs adding card acceptance, Badi sees opportunities with insurance companies and other nonbanks that need two-way digital card programs to send and receive funds from customers.
What remains to be seen is whether U.S. fintechs — typically looking for streamlined solutions to cut card-acceptance costs — are particularly interested in extending Amex’s various perks and offers to users.
“We’re in talks with several U.S. fintechs that are interested,” Badi said, declining to disclose the names of those companies.
