American Express and Goldman Sachs announced a collaboration on 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 Executive Vice President of Global Commercial Services at American Express Dean Henry.
As a growing number of fledgling fintechs siphon clients from traditional financial institutions, innovation becomes increasingly important for industry stalwarts like American Express and Goldman Sachs. 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 new 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“We are pleased to partner with Goldman Sachs to modernize these outdated legacy B2B payment processes," Henry said in the release.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 already offers Automated Clearing House payments, wire services and foreign currency payments.
Goldman TxB payments system is part of the newly-announced digital solution, and routes payments 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, global head of TxB at Goldman Sachs. 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.
Several large U.S. banks offer similar digital treasury solutions to Goldman Sachs, including Bank of America, Citigroup and JPMorgan Chase. American Banker reports that Moorthy valued the U.S. corporate banking market at $80 billion, and the global market between $150 billion and $160 billion.
According to the press release, the new payments service is currently available to select clients and is expected to be released for general availability in early 2022