Fintech streamlines business payments across credit card, ACH and wire services

Dive Brief:

Fintech company Brex on Wednesday launched Brex Cash, a business cash management product meant to replace business bank accounts. The Brex Cash account will be integrated with a credit card, allowing businesses to pay invoices and bill their customers in one system, and earn rewards points and 1.6% interest. Rewards points can be redeemed for cash back, travel and air miles.
Brex is partnering on the project with Boston-based Radius Bank, which will provide payment processing services.
Brex Cash is aimed at companies looking to streamline their payments across credit card, automated clearing house (ACH) and wire services from one account, which many business bank accounts don't offer.

Dive Insight:

"When you're setting up a business bank account, you're primarily using it to make payments via ACH or wire," Brex CFO Michael Tannenbaum told CFO Dive on Friday. "You pay a vendor either with a credit card or through ACH or wire, and those are two different systems that finance teams have to manage."

Brex created Brex Cash to combine credit card, wire and ACH payments into one bank account.

"We also introduced a rewards program, meaning the points you'd normally get on a Brex credit card, you also get on a wire or ACH," Tannenbaum said, adding Brex Cash charges no fees on ACH or wire transactions, where other financial services companies do.

"We're doing this through one account, sort of like our operating or cash management account, that also accrues interest," he said.

Business banking account customers typically don't earn interest on checking, Tannenbaum said. But Brex Cash, combining all payment methods into one cash management account, invests excess cash into money market funds, and earns the payer a 1.6% yield.

All Brex products are targeted at LLCs and C corporations, Tannenbaum said. Brex, then, would not be a good option for sole proprietors, who use their Social Security Numbers to file taxes for their businesses.

Brex Cash's customer base is composed of fast-growing technology, e-commerce and life sciences companies, Tannenbaum said.