American Express Delivers On Small Business Plans With Kabbage Checking

What Happened: American Express AXP announced it would launch its first small business checking account, Kabbage Checking.

The development comes shortly after the firm’s acquisition of Kabbage, an online fintech lender.

Through Kabbage’s team and full suite of fintech products, data platform, and IP, the new American Express offer will consist of a no-fee digital account that pays 1.1% interest on balances up to $100,000. Also offered will be mobile deposits, debit cards, bill pay, and savings features, as well as ATM accessibility.

“The checking account is sort of the financial operating system for a business, it’s one of the first things a business gets” after being created, Kabbage co-founder Kathryn Petralia said. “With the record number of new businesses being created last year, we think it’s important to help them get products that a brand new business wouldn’t be able to get from a traditional institution.”

Why It Matters: For a long time, American Express had its sights set on small business banking. The purchase of Kabbage was meant to accelerate its plans to offer U.S. small businesses a better way to manage payments and cash flow, digitally.

With the new Kabbage Banking offer, American Express is looking to capture market share from other fintech leaders like Brex.

“That’s the beauty of having a suite of products that all work together to help customers manage cash flow,” Petralia added. Business owners “are not folks with finance degrees; they’re ordering inventory and making products and dealing with customers. We’re trying to simplify their lives.”

Photo by Anna Shvets from Pexels.