Goldman Sachs (NYSE:GS) is partnering with American Express (NYSE:AXP) to upgrade its digital cash management offering.
The investment bank is leaning on the world’s biggest issuer of business charge cards in its quest to displace rivals that handle trillions of dollars in deposits and payments for corporations.
By integrating virtual card technology from AmEx into its platform, Goldman has automated the cumbersome process of sorting and paying bills to vendors and suppliers, according to executives of the two firms.
Cash management — the business of holding companies’ deposits and helping them make payments — is the commercial counterpart to Goldman’s better-known efforts to break into retail banking.
Introduced in early 2020 as part of CEO David Solomon’s plans to add more stable sources of revenue, the transaction banking business has already begun gaining traction. Goldman reached $50 billion in deposits by the third quarter this year, several years ahead of target, Solomon told analysts last week.
Built using cloud technology to offer a slick experience for users, Goldman’s platform employs algorithms to help decide which payment form is best to use — card, wire, or Automated Clearing House — to save companies time and maximize card rewards. It also offers greater visibility into the status of payments and levels of cash.
That’s an upgrade from the patchwork of decades-old systems used by competitors, which force users to shuttle between multiple programs to manage thousands of daily payments, according to Dean Henry, executive vice president of global commercial services at AmEx. Citigroup (NYSE:C) , JPMorgan Chase (NYSE:JPM)and other global banks are the dominant players in cash management.
GS shares gave back $2.53 to $409.63, while those for AXP dipped 81 cents to $176.50.
