Nilson Report

Issue 1181 | Aug 2020

FEATURED COMPANIES

Companies featured in this issue include:

Top 7 Acquirers in Latin America—2019 vs. 2018

10 Largest General Purchase Acquirers in Latin America

45 Largest Visa/Mastercard Merchant Acquirers in Latin America

U.S. General Purpose Cards—January 1-June 30, 2020

Market Shares of Purchase Transactions

U.S. Credit and Debit Cards at Midyear 2020 vs. 2019

U.S. Store Credit Cards—2019 with Change vs. 2018

Investments and Acquisitions—July 2020

U.S. General Purpose Cards

The table on page seven shows Visa, Mastercard, American Express and Discover card credit and debit card purchase volume (spending) for cards issued in the U.S. for the first six months of 2020. Figures for credit card purchase volume are shown here.

1. Visa, Credit
$909.38 billion purchase volume, -9.2%
2. Mastercard, Credit
$395.58 billion purchase volume, -8.2%
3. American Express, Credit
$329.55 billion purchase volume, -18.0%
4. Discover, Credit
$64.71 billion purchase volume, -7.0%

Full access to the U.S. General Purpose Cards results is available when you subscribe to the Nilson Report.

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POSTED AUG 31, 2020 | PRINT

Amex Buys Kabbage, Deepens Connections to Small Businesses

American Express has signed a definitive agreement to purchase most of the assets of Kabbage, operator of a cash flow technology platform that supports small businesses (SMBs) in the U.S. Terms were not announced. 

Kabbage is best known for its fully automated lending platform. It has also provided its technology and data platform to alternative lenders in other countries. In the U.S., Kabbage customers received $2.90 billion in loans last year and a total of $16 billion over the last decade. However, in April of this year, Covid-19 effectively closed down millions of small businesses. Lack of revenue meant they could no longer qualify for loans under Kabbage’s risk management underwriting criteria. Kabbage’s technology analyzes dozens of real-time data points in a business’s operation to deliver an automated lending decision in minutes.

Kabbage switched over to offering Paycheck Protection Program (PPP) loans backed by the U.S. government. It initiated almost 300,000 PPP loans valued at more than $7.00 billion, which ranked it second largest among all PPP lenders by the number of applications handled.

American Express is acquiring Kabbage’s intellectual property, employees, data platform, and the technology that supports access to working capital, cash flow management, and other products and services, including card and ACH payment processing and checking accounts. It is not acquiring any of Kabbage’s loans. Small business loans originated prior to Covid-19 had already been securitized, and the PPP loans, which are backed by the U.S. government, are designed to be forgiven. A separate entity will service accounts not transferred to American Express.

Amex, the largest issuer of credit cards to small businesses in the U.S., in recent years has been building its suite of payment and working capital products and services for those SMBs. American Express offers small businesses cash advances against their credit card receivables. It has a partnership with online lender GreenSky to provide installment loans to customers of small businesses that offer American Express credit card acceptance. 

American Express has made several moves to deepen its role in business-to-business payments involving small and midsized businesses, including partnerships with Bill.com and Invoiced. Most recently, it launched American Express One AP, its first proprietary end-to-end automated accounts payable (AP) service. That platform, which is a virtual AP department, is 

built on technology Amex acquired when it purchased Acompay last year. Acompay had expertise integrating with accounting systems.

American Express One AP, which is initially available only in the U.S., is aimed at businesses with annual revenues that range from $10 million to $30 million. The software processes a payment file from a company’s accounting system using a card, check, or ACH. A benefit is easier facilitation of payment by virtual card, which helps a businesses’s cash flow. 

INTERVIEWED FOR THIS ARTICLE

Trina Dutta is VP and General Manager B2B Payments Automation at American Express in New York, trina.dutta@aexp.com, www.americanexpress.com.

Prior issues: 1176, 1148, 1139



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