Amex adds B2B tech to address clients' economic pressures

American Express has added several new business payment tools as part of an ongoing strategy to help clients battle economic challenges by providing them with more modern payment options.

"Historically, B2B payments have been cumbersome and time-consuming due to complex financial and administrative processes. But that's starting to change as B2B payments are digitizing." said Mohammed Badi, president of global network services at American Express. 

This week, the card network launched Amex Business Link, a B2B payments ecosystem designed for Amex's network issuers and acquirers to broaden their appeal to clients that are adopting digital processes, often after years of working largely manually. It's the latest in a series of business-oriented product launches and investments from Amex, which faces growing competition from payment technology companies in addition to its traditional rivals like Visa and Mastercard.

Amex and its competitors are trying to reach businesses that are working to manage overhead in a tough economy. That can mean cutting costs through supply-chain finance systems that permit more flexible payment terms and more visibility between accounts payable, accounts receivable and other parts of the business that rely on the flow of funds in and out of the company. 

Amex Business Link offers access to working capital, access to new clients across the Amex network, multiple payment methods such as cards, ACH, wires and checks. There's also digital connections with third parties that are part of Amex's network. Link has more than 500 businesses live in five countries at its launch. 

Business Link includes an application programming interface that enables connections to a business' enterprise resource planning and customer relationship management, addressing a trend toward payment companies offering an easy way for payment data to be accessible in a company's back end system, Badi said. The API can also digitally connect different parts of the payment flow, helping to cut paper-based processes for purchase orders, reconciliation, payment processing and reporting. Business Link supports local and cross-border transactions. 

Building on its acquisition of business-lending fintech Kabbage in 2020, Amex has expanded its supplier network in construction, health care, technology and other business categories over the past two years. Amex added business checking accounts and entered partnerships with Billtrust and Versapay to expand Amex's virtual card reach for business payments. Amex additionally added digital checking for small businesses, allowing users to convert Amex Membership loyalty points to cash within the small-business app. 

Amex Business Link runs in parallel to these other products, and includes training, onboarding and other support. 

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"Businesses are looking for ways to be more efficient and effective, especially when it comes to navigating macroeconomic pressures," Badi said. 

Amex is operating from a position of strength relative to some payment-focused technology companies, which have suffered declines in their valuations. Amex recently reported earnings that beat analysts' expectations, and also said it's not yet noticing an impact on payments volume due to inflation and a potential economic slowdown. That's allowed Amex to expand in several areas, such as hiring several thousand technology workers and offering credit cards to fintechs — in addition to its active B2B pipeline.

Amex's internal research found 56% of U.S. businesses plan to expand automated payments to suppliers and 63% want to expand accounts receivable automation. 

"From small and mid-sized businesses to large global companies, there continues to be a growing need for the digitization of payments, and for better and more customizable payments," Badi said. 

Amex's rivals have also been busy. 

Visa in November partnered with Singapore-based payment company Thunes to support international connections between banks and other parties to streamline international business payments, hoping to reach small businesses that are seeking international suppliers and consumers. Visa wants to reach the 82% of small businesses in the U.S. that plan to expand into markets outside the U.S., according to AirWallex. 

Mastercard recently added a feature that allows small businesses to pay suppliers instantly through virtual cards. Called Mastercard Track Instant Pay, it uses machine learning to evaluate and approve supplier invoices that contain information that allows users to reduce payment cycle times. 

Several other payment companies and banks, such as Global Payments, Rapyd, Capital One and Goldman Sachs, have also introduced products designed to digitize B2B payments over the past year. 

There is rising demand for B2B digital payment technology. Gartner predicts 80% of B2B sales will take place online by 2025, attributing the long-term trend to millennials rising to take senior-level positions at companies. 

"Between increasing buyer demand for digitalization in B2B and the market opportunity for fintech, the trend for more B2B payment technology is likely to continue and grow stronger in the coming years," said Ralph Dangelmeier, CEO of BlueSnap, a digital payment company. "This strong trend will necessitate the continued accelerations of B2B digital payments. Buyers will want easier ways to pay, and suppliers will be looking for efficient ways to capture payments to increase cash flow."