Amex to Become Sugar Daddy to Digital Commerce Startups

With American Express Co. planning to grant early stage startup companies cash for their innovativeness, the fintech newbie world should celebrate: a formerly stodgy credit card company is openly embracing new players to become more of a giant in the ever-increasingly crowded digital commerce crowd.

Amex said today it plans to invest $100 million in companies in the digital commerce space, specifically targeting startups that focus on loyalty and rewards, mobile and online payment management, fee-based services, security and fraud detection, and data analysis.

“As we enter the next chapter in our history, we recognize the need to work with emerging technology companies to inspire change, encourage innovation, and ultimately deliver the best products and services to our customers,” said Dan Schulman, group president of enterprise growth, in a statement.

The digital payment multiyear initiative will be run out of the company’s newer Silicon Valley Office. Harshul Sanghi, who previously ran Motorola Mobility Ventures, will lead the endeavor.

With Amex creating this new initiative, it places itself more in direct competition with players like PayPal and Square.

Beyond creating this fund, Amex continues to develop its digital wallet Serve. When Bank Innovation spoke with David Messenger, executive vice president of Amex’s online and mobile unit, a few months back, he alerted us that forging partnerships for its digital wallet was key to its business plan.

Amex’s partnership and investment plans point to how important the credit card company believes new ideas are to the future of its business. Amex is willing to reinvent itself to make sure it’s relevant in the digital age.