Finance

The head of Amex Digital Labs lays out the card giant’s innovation strategy, and explains why the future is partnering with tech giants like Apple and Google

  • Amex Digital Labs sits at the center of the credit card company’s innovation strategy.
  • Increasingly, Amex’s has leaned into non-card payments, like peer-to-peer and QR codes to pay.
  • While historically, Amex had a “build” mentality, now it’s more open to partnering with — and potentially acquiring — startups, Luke Gebb, head of Amex Digital Labs, told Business Insider.
  • Visit Business Insider’s homepage for more stories.

Credit card giants like American Express look a bit different than they used to. Not only have payments become more digital, consumers are increasingly looking for new ways to pay and get paid — not all of which involves a physical card.

That evolution hasn’t gone unnoticed by Luke Gebb, head of Amex Digital Labs, who spoke to Business Insider about how the card giant is trying to keep pace.

“Five or 10 years ago, as a company, we were all about getting people to use credit cards more,” he said.

“But now, we’re really recognizing — and this is one of the core areas of my team’s work — all the types of payments that our customers want to make that may or may not be on credit card rails,” Gebb added.

Amex Digital Labs is the company’s internal innovation hub. Its some 150 employees are responsible for driving new products and partnerships to further the organization’s digital strategy. 

Outside of cards, that means leading Amex’s peer-to-peer products through partnerships with the likes of PayPal and developing open-banking platforms. And for cards, Gebb leads the continued roll out of contactless payments and QR codes as a way to pay.

If anyone can speak to Amex’s evolution it’s Gebb, who has spent over 20 years at the company. His previous roles included working on the launch of the Amex Offers reward program and running its website and mobile app before starting Digital Labs in 2017.

Read more: POWER PLAYERS: Meet 11 American Express execs driving the card giant’s digital strategy for everything from payments to dining and travel partnerships

Amex is innovating through M&A and partnerships

Amex, like many financial institutions, is constantly weighing the build vs. buy routes when it comes to expanding its product suite.

“Historically, we used to default to building everything,” Gebb said. 

But increasingly, through partnership with Amex Ventures, led by Harshul Sanghi, the company has been more open to startups, both as partners and possible acquisitions. By making minority stake investments in startups, Digital Labs can explore use cases for those startups’ tech, and potentially look to acquire them, Gebbs said.

Read more: Payments giants like PayPal and Amex are making hundreds of startup bets to transform how we shop and pay —  and it’s part of a $1 billion-plus wave of VC investment

Mezi, for example, was a personal travel app that enabled users to submit flight requests via chat. Amex initially held a minority stake in Mezi through its venture arm, before acquiring the company in 2018.

Mezi’s tech is being rolled out through new chat functionality called AskAmex, where customers can resolve issues with their cards, book travel, and make restaurant reservations through the chat.

“Expanding mobile membership in that way has been one of our big pushes,” Gebb said.

Amex partners with larger tech companies, too. Apple and Google, both of which offer mobile wallets, partner with Amex to integrate its card network in those wallets. 

Gebb pointed to more of those types of deals being key to the continued progress Amex looks to make in payments.

“There’s a partnership to be had with every single significant big tech company, and with a ton of startups,” he said. “Sometimes, those lead to M&A.”

Working on both sides of the payments ecosystem

While Amex is a payments processor similar to Mastercard and Visa, it’s also an issuer, meaning it works directly with consumers and businesses to issue credit.

With touchpoints on both the back-end processing and the user-facing side, Amex’s digital strategy is often consumer-focused — like building its mobile app to partnering with big brands like Delta and Marriott.

Managing both the consumer side and the merchant side can be an advantage when it comes to things like rewards, Gebb said. Amex can coordinate directly with merchants to create offers, and then target customers based on the data they have around their spending habits.

“It’s hard data to get if you don’t have both sides of the equation, both network and issuer,” Gebb said.

Through its mobile app, Amex has been rolling out different promotions and features to appeal to its card members, like the ability to book restaurant reservations using Resy (which Amex acquired last year). In response to the coronavirus pandemic, Amex’s Resy has adapted its platform to include features like mobile waitlists for restaurants that can help minimize lines and crowds.

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