Fintech company Brex on Wednesday launched Brex Cash, a business cash management product meant to replace business bank accounts. The Brex Cash account will be integrated with a credit card, allowing businesses to pay invoices and bill their customers in one system, and earn rewards points and 1.6% interest. Rewards points can be redeemed for cash back, travel and air miles.
Brex is partnering on the project with Boston-based Radius Bank, which will provide payment processing services.
Brex Cash is aimed at companies looking to streamline their payments across credit card, automated clearing house (ACH) and wire services from one account, which many business bank accounts don't offer.
Brex is not the only fintech unicorn to launch a new platform in the past month or so. Stripe rolled out a no-fee, no-interest-rate corporate card and introduced Stripe Capital to offer instant loans to customers.
Brex created Brex Cash to combine credit card, wire and ACH payments into one bank account.
"When you're setting up a business bank account, you're primarily using it to make payments via ACH or wire," Brex CFO Michael Tannenbaum told Industry Dive on Friday. "You pay a vendor either with a credit card or through ACH or wire, and those are two different systems that finance teams have to manage.
"We also introduced a rewards program, meaning the points you'd normally get on a Brex credit card, you also get on a wire or ACH," Tannenbaum added, noting that Brex Cash charges no fees on ACH or wire transactions, where other financial services companies do.
Business banking account customers typically don't earn interest on checking, Tannenbaum said. But Brex Cash, combining all payment methods into one cash management account, invests excess cash into money market funds, and earns the payer a 1.6% yield.
The business model for Brex's latest product is not new, co-founder and CEO Henrique Dubugras told TechCrunch. "It's not that we are inventing this — this model exists with Fidelity," Dubugras said. "Fidelity isn't necessarily a bank — we are bringing that concept to businesses to give lower fees, better interest rates, better experiences and more security.
"There will always be customers that are skeptical, but I think by starting out with a card, we built a lot of trust," Dubugras said.