American Express will partner with Intuit in order to provide customers of invoicing platform QuickBooks with access to working capital loans as part of its Working Capital Terms program.
Financing, which is open to Amex OPEN business cardholders that also use QuickBooks, will be targeted to help merchants with accounts payable bills. The product will consolidate payment and accounting transactions, so that merchants can request funds to pay vendors within QuickBooks, receive those funds, and complete the transaction without leaving the application, therefore adding convenience. The 30- to 90-day loans range from $1,000 to $750,000 and carry a fee of 0.5-1.5%, according to the firms.
The new program could quickly attract favor from eligible QuickBooks merchants. Amex has already partnered with the firm in several areas.
- Small businesses need financing. BI Intelligence estimates that there was $96.5 billion in unfulfilled small business loan demand in the US in Q4 2015 — as of late 2015, only 49% of businesses with $100,000 to $1 million in revenue that tried to borrow from large banks received some financing. That’s a stat that goes down among smaller merchants, indicating that there is considerable demand that Amex could meet.
- And focusing on accounts payable could help these businesses in an under-attended segment. Accounts payable is a massive segment — in 2013, the medianorganization processed 43,000 invoices per year. The new partnership could help simplify an already tedious process while providing merchants with much-needed funding, which might be a draw for potential users.
Amex has been reaching into small businesses in a number of ways as part of a move to grow. Amex has been working to extend relationships with small businesses through its OptBlue program, which makes it easier for small merchants to use and accept Amex cards. Once the card network partners with a merchant, it can then extract revenue from it through additional services like Working Capital Terms, especially if it’s the most convenient option relative to competitors.
Investing in small businesses and services that could help bolster those partners could help Amex recoup the losses it will feel following the sale of the Costco portfolio, which represented 8% of the firm’s $1 trillion in billed business and 20% of its outstanding loans in 2015.
Evan Bakker and John Heggestuen, analysts at BI Intelligence, Business Insider's premium research service, have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends.
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- 2016 will be a watershed year for the payments industry. Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices.
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- Uncovers the key themes and trends affecting the payments industry in 2016 and beyond.
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- Analyzes the alternative technologies, including blockchain, which could further disrupt the ecosystem.
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