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American Express hopes to lure millennial and Gen Z users to use its first digital-checking account.
Credit card service provider American Express (NYSE: AXP) has launched its first digital-checking account to its US consumers. On the 9th of February, the company announced Amex Rewards Checking, which will be available to any non-business cardmember. According to the general manager for consumer banking, Eva Reda, the cardmember must be in good standing to enjoy the account, requiring no fee and minimum balance.
American Express Launches Digital-Checking Account
Ahead of American Express, several financial institutions, including banks and fintech firms, have been offering digital-checking accounts. In the highly competitive period of digital-checking account providers, American Express has added some unique features to entice customers. Customers who rack up points on transactions will be able to use the account’s debit card to earn a reward point one each $2 they spend. In addition, they will enjoy a 0.50% annual yield on their balances.
Reda commented on the enticement American Express attached to its digital-checking accounts. The executive explained:
“The reason we are putting together this really nice [annual percentage yield] and the rewards is to absolutely maximize the loyalty we can get from those customers. The time just feels right based on where customers’ heads are, who’s using the product and how mass this sort of a solution is quickly becoming.”
Furthermore, the account includes a debit card which holders can use for tap-and-go payments at participating merchants. Also, there is assured protection in case of theft or accidental damage.
American Express is continually rolling out different devices to satisfy its consumers. The new digital-checking account joins other American Express deposit product offerings. The other deposit product the company offers include savings accounts and certificate of deposits. In 2021, the company unveiled Kabbage Checking, a type for small business owners. The total number of cards the company had in circulation last year was 56 million. The number of cards in circulation includes both consumer and business users.
Amex Intends to Onboard Millennials and Gen Z with New Account
According to Reda, American Express hopes to lure millennial and Gen Z users to use its first digital-checking account. She added:
“There is no question in my mind that some portion of our customer base are going to decide this is their primary account, and others who are going to try it out and start out with this as their second or their third account.”
American Express stock is up 0.02% to $194.04 in after-hours trading at press time. Yesterday, AXP pained over 3% to close at $194. Impressively, the company has amassed only gains over the past year, soaring 53.14% in the last twelve months. Since the year began, the credit card service company has gained 18.58% since the beginning of 2022. In addition, AXP has added 7.86% in the last three months, 10.62% over the past months, and 5.70% in the last five days.