Amex intensifies pressure in B2B cards arms race

In its most recent quarterly financial report, American Express showed the strength of its B2B payments proposition as its Global Commercial Services (GCS) segment saw revenue jump 8% in the three months to 30 June 2019 compared to the same time last year. This follows similarly strong mid-year commercial card filings from both Visa and Mastercard.

The American Express 10-Q SEC filing showed that GCS total revenues net of interest expense after provisions for losses for the quarter stood at $3.172 billion, up $241 million on Q2 2018.

The strong second quarter result enhanced the half-year standings of the GCS segment, which for the first two quarters of the year saw total revenues net of interest expense after provisions for losses increase by 7%. This figure for the first six months of the year hit $6.151 billion, an increase of $416 million on the first half of 2018.

Commenting on the results during an earnings call on 19 July 2019, Stephen Squeri, chairman and CEO of American Express, noted that scaling its B2B payment offerings is one of the company’s key growth strategies.

“Our commercial customers increasingly want payments integrated into their Procure to Pay infrastructure, and we’re developing a range of solutions, which do that for businesses of all sizes and complexities” said Squeri.

One tactic that Amex is pursuing is to expand its network of strategic partnerships. The company has partnered with providers such as Amazon Business, Tradeshift, and most recently SAP Ariba to help large and global companies track and reconcile payments within their ERP systems.

For the next tier of corporates, Amex’s larger SME customers, the challenge is finding ways to increase efficiency and cash flow. Again, Amex is taking the partnership approach here, as Squeri explained:

“We’re working with companies like Wax and MineralTree on payment solutions by integrating their accounting and procurement systems. And for our small business customers, who are offering an AP automation solution with that makes it easier for them to pay their suppliers using our cards”.

Providing payment capabilities and financing solutions to corporates of every size is a priority for Amex, with Squeri making it clear on the earnings call that they want to provide solutions across the range from a single proprietorship through to Fortune 500 organisations.

“We’re still in a relatively early stage of this journey, but we’re making good progress in building out our B2B offerings, and we’ll continue to invest in this area going forward” Squeri commented.