American Express and Goldman Sachs announced a collaboration Wednesday to offer AmEx’s virtual cards through Goldman’s corporate banking platform, Goldman Sachs Transaction Banking (TxB).
The new digital offering aims to make business-to-business (B2B) payments easier and more streamlined for large corporate clients, by providing multiple payment options on one platform.
“A major pain point for our large commercial card clients is managing multiple platforms and myriad time-consuming, costly and complex processes to make, track and reconcile thousands of payment transactions every day,” said Dean Henry, AmEx's executive vice president of global commercial services.
The new payments service is available to select clients and is expected to expand in early 2022, the companies said.
Goldman said in a 2020 Investor Day presentation it wants to rely more heavily on transaction banking — the business of moving money around the world for large companies through services such as cash management and treasury. The bank said last year that it expected a $1 billion pretax loss from its consumer and transaction banking ventures but was confident those segments could yield $1 billion in annual revenue by 2025.
American Express holds relationships with nearly 60% of Fortune 500 companies, and this collaboration will allow Goldman to tap into that sizable group of AmEx business cardholders.
The AmEx-Goldman integrated payments service touts a “one flow” process that consolidates payment activity with a set of B2B payment instructions. This will eliminate redundancies in the payments process and cut bank fees incurred by multi-file initiation.
“We are pleased to partner with Goldman Sachs to modernize these outdated legacy B2B payment processes," Henry said in the release. "Together, we are setting a new standard in transaction banking for big business by offering access to faster payments and real-time tracking that can increase efficiency and reduce costs."
The TxB corporate banking platform offers Automated Clearing House payments, wire services and foreign currency payments. Payments can be routed through specific channels in accordance with the buyer’s preferences for speed and cost.
“We developed the Goldman Sachs TxB platform to provide our clients with a modern cash management platform that is digital, nimble, easy to use, and secure — bringing a consumer-grade user experience into the world of B2B payments," said Hari Moorthy, Goldman's global head of TxB. The bank will work with American Express "to expand our payment platform, enabling clients that are American Express Corporate Card Members to make card payments and drive efficiencies in their supplier payment experiences," he said.
Goldman launched transaction banking in the U.S. in June 2020 and, in its first year, attracted 250 clients and $35 billion in deposits. The bank expanded its transaction banking services to the U.K. in June. Goldman, earlier that month, inked a deal with AmEx rival Visa to give the bank’s corporate and commercial clients a cross-border payment upgrade — in the form of access to the card network’s channels.