Amex is coming for Brex's market with the launch of corporate credit cards for startups - Business Insider

Amex 2.0, uses a startup's financial data, including corporate account information and fundraising history, to determine creditworthiness. Likewise, Amex will look to new technology to analyze spending behavior to qualify and determine limits for startups. This approach is similar to Stripe's for its own recently announced corporate credit card product, though the company will be using data gained from transactions made on its payments platform.

This approach also helps firms solve a crucial pain point for their target market. Typically, startup founders are required to provide a personal guarantee or security deposit for credit cards, forcing them to take substantial risk to access revolving capital. Amex, like Brex, will offer startups the option of full corporate liability without personal guarantees, by leaning on its access to these players' transactional data.

Credit cards for startups have become a hot market for fintechs, and Amex's move is unlikely to change that for the likes of Brex and Divvy. These fintechs have been successful in the space because they've developed novel and innovative solutions. There's no doubt that Amex's foray into the segment will offer a new and more substantial challenge for these players. After all, a firm that generates revenue of close to Yet, the fact remains that Amex is simply copying their approach. So, more than simply being flattered by the imitation, these players should be galvanized further to action.

To move the innovation needle and avoid simply playing catch-up with fintechs, Amex needs to identify and solve new pain points. Its latest product makes no mention of providing spending Features like that, in addition to solutions that can help its target market cut costs, such as transactions for transfers, can help the firm close the gap on its fintech peers.

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