American Express
AXP
Currently totalling $39.3bn for 2023, the B2B cross-border payments market globally is expected to climb considerably over the rest of the decade, growing 43% by 2030 to reach $56.1tn, according to market sizing data from my own company FXC Intelligence.
With the B2B landscape offering such growth potential, Amex has launched a number of products and solutions aimed not only at capturing the business cards market, but the broader B2B payments market – particularly when it comes to cross-border.
Recent products include Global Pay, Amex’s online cross-border payments solution for small businesses. The company has also launched Business Blueprint, an end-to-end digital platform for SMBs to access a line of credit, business checking account, and manage their cash flow by analyzing business data in one place, including bank accounts from both third parties and Amex itself.
The company’s services also cover merchant services, including through Amex’s Multi-Currency Merchant Account, which enables merchants to accept payments in 100+ currencies, with automatic conversion to the settlement currency.
However, with the B2B payments space still in the middle of a digital transformation, and considerable global shifts in payment behavior underway, how does Amex see itself in the wider market and where does it expect to gain growth? I spoke to Dean Henry, EVP and General Manager, Global Business Financing, Payments & Digital Experiences, American Express, and Colleen Taylor, President of Merchant Services – U.S., American Express, to find out more.
Daniel Webber: Let’s start from the top: What are Amex’s priorities in the B2B cross-border payment space?
Dean Henry: Let me start this way: B2B payments is a big part of Amex’s existing payment flows today. If you think about all the money that’s moving over across our network, about 45% of Amex’s total billed business (Card Member spending) comes from commercial payments. So it’s a big component of where we are today.
70% of the commercial billings are payments between businesses. What we are keenly aware of in the market is that Amex, and the services that we offer, have to expand beyond the card. We’re not just trying to facilitate card-based payments, but we really want to be a provider for any business, of any size, to pay anybody, anywhere.
To do that, we have been on a multi-year journey where we’ve been trying to build capabilities in-house to make sure we facilitate cross-border and domestic payments. We’ve been buying solutions to automate those payments and then we’ve been partnering. We need to go where our customers are already transacting and take our capabilities into those digital environments. So we’ve done that as well.
Most recently, our multi-rail strategy and capability set has included the launch of Global Pay. That is a completely digital cross-border payment capability that allows a business of any size – but is really focused on small businesses – to have a seamless digital payment capability that can move money cross-border, in seconds in some instances, to pay their supplier base or pay anybody associated with their business. So we’ve really tried to lean into Amex as a one-stop shop for payments.
Webber: How has Global Pay evolved from the historical FX International Payments (FX IP) product? I understand your new product approaches it quite differently.
Henry: It does. Global Pay is the modern, digital version of FX IP, intended to allow a user to log in digitally, see all of the capabilities in an intuitive way and execute a payment. But what we’re not losing is that service ethos. So we’re making sure that we have a solution where a customer, if they have a question or have a problem, knows that they can call Amex and get the Amex service. So it’s really just the next evolution of FX IP as a capability.
Webber: If we move to merchants, it’s an ecosystem that Amex has built. So where does merchant services fit into B2B and the payment strategy?
Coleen Taylor: The merchant services business has been really focusing on acquiring merchants globally – we have millions of relationships with merchants around the globe.
It’s important that we consistently expand that network. So my team, along with partners around the globe, is expanding and getting more merchants to accept the card. That includes B2B suppliers that are accepting the card as a payment for business transactions, and we are increasingly focused on ensuring that businesses accept the card for B2B transactions. I think another important point to note is, with companies like Flywire for example, we partner with them because they are getting a request to expand their network and include Amex as a payment modality, and we do that.
Our job is to make sure that we accept payments and that merchants accept the payments, whether they are a B2C-facing merchant or a supplier. And we work very well together. We’re working on this stuff together to ensure that as buyer capabilities expand, we have someone to catch the ball on the other end.
Webber: That’s the difference when you compare yourselves to some of the other big networks; it’s different because of the products that you offer under your own brand and the merchant end. How have you seen the needs within the cross-border element change?
Taylor: The move towards digitization started before the pandemic but certainly the pandemic accelerated things. Whether it was for domestic payments or cross-border payments, when you couldn’t get into the office to print out checks or get a signature for a check, you had a lot of demand from small businesses, from medium-sized businesses – and large corporates were already there for transactions to flow in a digital way. We probably gained four to five years in the digitization journey because of the pandemic, and things haven’t really slowed down.
The other thing layering on top of the pandemic was e-commerce generally speaking. We experience it as consumers that we get boxes at our doors every day, but businesses are transacting in e-commerce marketplaces etc. And so that’s another accelerant in the process.
Webber: In terms of cross-border payments particularly, who is your customer using as the alternative? What then brings them in to use Amex for cross-border payment services?
Henry: The landscape in cross-border payments is incredibly complex. If you’re a small business, you have a choice to use a global bank, a regional bank, a small bank, a myriad of new technology companies that have come out over the last decade. What we know about Global Pay is that it’s a digital experience that is leading in terms of how easy and how seamless it is to use. And it comes from a brand like American Express that people trust. So I think ‘digital-first meets a known brand’ is a differentiator in this market of so many options.
Then in the US, when you’re a new business and you’re starting, one of the first things that you do is you put your website out as maybe a component of your bricks-and-mortar operation or in lieu of a bricks-and-mortar operation. Almost from day one, your customer base is cross-border and frequently your supply chain is cross-border. So you’re sourcing inputs from different countries, and that’s a normal course for any business of any size at this point. We see the demand for having Amex be a one-stop payment shop to provide your payment needs and solutions. We need to be able to facilitate those cross-border payments and we’re doing that with Global Pay.
Webber: How are you thinking about credit evolving with cross-border payments?
Henry: We provide a whole line of credit solutions. We launched a platform called Business Blueprint, which integrates some of our credit capabilities with our payment solutions. What I will say is that a lot of small businesses that are sending the volume that we’re going after don’t actually need super-complicated forwards and contracts. They really just need a solution to pay somebody right now, with an affordable solution with a set of fees that are very transparent and known. And so that’s what that’s really trying to do, is this simple, fast, easy solution from a brand you trust.
Taylor: It’s really just about the simplicity of getting it from a brand that’s trusted, that’s actually in the wallet and it’s providing working capital through the ability to actually charge things, etc. So I think it’s working and certainly, this idea of being knowledgeable about a transaction that you may only do a couple of times a month or even a year, you want to go after a trusted bank brand for that.
Webber: We’ve talked about a few projects already but how do partnerships fit into your strategy?
Taylor: I think partnerships are important for a scaled company like ourselves. If you can take the agility of a small fintech and the scale of a big provider like American Express, that’s magic for getting growth, right? Scale plus agility equals innovation and growth. In the merchant business, we have a partnership team that actually goes out to look for value-added services that are out there being created by founders and innovators. We vet them to make sure that they actually are going to work and are aligned with our brand, and then we bring them in and either have a very strong referral relationship or some other version of partnership.
So on the merchant side, we’ve been very focused in the last couple of years on using partnerships as a way to extend capabilities. And I think in the commercial business where Dean resides, they’ve actually been doing it a lot longer. So it’s a really important part of our strategy going forward.
Henry: I would add on to that, we’ve also been pretty active in acquisitions in the last few years. Two acquisitions I’ll point to: one in 2019 that was acompay, which really rounded out our ability to provide automation for accounts payable departments and lean into our buyer solutions. Then in January we announced the acquisition of Nipendo in Israel, which is a solution set that really allows suppliers to have a richer experience with our network about what kind of payments that they receive, getting data about the payments and automating much of the reconciliation capabilities.
Together, that partner plus Amex leading and providing a proprietary solution and trying to have competition on both fronts – where we need to provide a great internal proprietary solution but we’re not afraid of making sure that our cards and our capabilities work and lead competitors in the market – hopefully yields the best customer experience. And that’s what we’re really focused on.
Webber: We know from our own data that we forecast B2B cross-border payments to continue to grow. Where do you see the growth coming in your part of the cross-border world?
Henry: It’s in small businesses. If you look at the banking landscape and how big businesses tend to operate with their treasury banks, we think that our opportunity is to really lean into the incredible scale of our small business franchise and provide that solution that is automated, easy, clear and trusted, where fees are known and it’s a fair solution backed up by the brand and the service. So that, hands down, is where we’re leaning into with Global Pay and that’s where we intend to continue to scale. And there’s tremendous opportunity, as we talked about earlier, just with the fact that those small businesses are so globalized these days that they have many of the same cross-border payment needs that multinationals have.
Webber: Coming from the merchant side, where are you expecting the growth to come from?
Taylor: It’s small businesses where suppliers are getting payments either from big buyers or from other small companies. Also, one of the things that we’re pretty focused on is making sure that we bring solutions to segments and are working through segment solutions, whether that’s healthcare or construction or courier payments. We have organized around those segments because there are unique needs in those segments and we see the growth as we get smarter and are more focused on solutions that matter for those segments. We see the growth coming in.
The conversation has been edited and condensed for clarity.
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