AmEx Enters Consumer Lending Market with GreenSky

American Express partners with GreenSky to provide merchants with access to credit solutions. In turn, their customers will be able to instantly and digitally pay for higher amount purchases. This pilot experiment is currently carried out in five cities in the US.

The American start-up GreenSky began focusing on consumer lending in 2012 and mostly addresses companies dealing with home improvement and elective healthcare merchants. Their partnership with the US card scheme will provide AmEx-affiliated retailers with a way to feature financing solutions in-store.

Customers may apply for a credit line using GreenSky’s mobile app, online or via phone call. They are almost instantly (within 60 seconds) sent an answer, allowing them to proceed on with their transaction right away (if approved).

Also, with this agreement, GreenSky can benefit from AmEx virtual card issuing solution vPayment, allowing their customers to make secure payments on credit, using an American Express virtual card.

Comments – American Express bets on further diversification

For American Express, this partnership is a first step towards entering the consumer lending market. Until recently, the only options they proposed were credit cards and SME lending solutions. The goal for this issuer is two-fold: on the one hand, securing their cardholders’ loyalty with some more flexibility in terms of payments; on the other hand, securing partner merchants’ loyalty, through providing them with a tool their customers like, and a means to increase average cart amounts.

The industries selected for this experiment are of interest, too, especially the health sector. Customers are likely to have to pay high amounts and may have trouble relying on conventional payment methods: payment facilities are then relevant.

GreenSky is a well-established FinTech, listed since June. It now has roughly 2 million customers, for 12 billion in issued loans. They act as business providers enabling banks to lend money, in back office. They favour partnerships over direct competition.