Credit card and financial technology company American Express (NYSE:AXP) announced a new product launch Tuesday that is helping send shares to new highs.
What Happened: American Express announced the launch of its new American Express Rewards Checking Account. The launch marks the first all-digital U.S. checking account from the company.
The checking account will be available for all eligible U.S. Consumer Card Members. Customers will earn rewards points on all debit card purchases and get an annual percentage yield that is 10 times higher than the current national rate.
The new checking account comes with no monthly maintenance fees or minimum opening balance.
“Our members want more banking products and services from us,” American Express Executive VP Consumer Banking Eva Reda said. “And they want more from their checking account, without giving up the benefits that are important to them.”
Reda called the American Express Rewards Checking Account “digital checking without compromises.”
Related Link: American Express Global Business Travel Announces SPAC Deal
Why It’s Important: American Express continues to offer new items to grow its customer base and also expand the number of products used by existing customers.
The company reports that it found that 81% of Gen Z and Millenial consumers use debit cards as a substitute for cash. The company is hoping to appeal to those age demographics by offering rewards points on every debit card purchase.
American Express also found that important considerations for consumers when opening a new bank account are trust (48%), reputation (35%) and rewards (35%). The company believes it hits on all three of these key items.
American Express reported fourth quarter revenue of $12.1 billion, up 30% year-over-year. The company attributed record card member spending seen in the quarter among the reasons for the growth.
The company said in the earnings release it wanted to deepen digital engagement with customers.
Price Action: AXP shares are up 3.11% to $193.72 on Tuesday afternoon, hitting new 52-week highs. Shares had traded between $125.63 and $189.03 over the last 52-weeks prior to Tuesday.
Photo: Courtesy of The.Comedian on Flickr
