Sunday , August 14, 2022

AmEx Will Offer A Crypto Rewards Card Later This Year in Tandem With Abra

Abra, a financial-services company specializing in digital assets, and American Express Co. have announced they will offer a rewards credit card that will let users pay with U.S. dollars but earn rewards in cryptocurrency. The new card, expected to debut late this year, will feature benefits such as Amex Offers, early access to event tickets, dining benefits, and purchase protection, the companies said.

The new card represents another step toward cryptocurrency services on the part of the major card networks. “Our partnership with American Express will now make it even easier to access and earn crypto,” said Bill Barhydt, chief executive and founder of Austin, Texas-based Abra, in a statement. “The news also represents another step toward Abra’s goal of eventually offering an instant line of credit directly at the point of sale. This is the future of payments.”

AmEx has supported Abra as an investor and sees backing the new card on its network as an extension of that link. “We have a longstanding relationship with Abra through our Amex Ventures investment portfolio, as they have deep expertise in both crypto and traditional financial services, and we are now pleased to extend the American Express brand and benefits to their customers as the payments network for their first card,” said Mohammed Badi, president of AmEx’s Global Network Services unit, in a statement.

The news of a card featuring cryptocurrency rewards comes as crypto continues to gain prominence in payments and among the big payments networks. Both Visa Inc. and Mastercard Inc. have in the past year announced major initiatives to support digital currencies on their networks, and companies like PayPal Holdings Inc. and BitPay Inc. have announced services allowing wallet users to spend crypto at stores and online. In most of these instances, the spent crypto is immediately converted into dollars or other fiat currencies.

AmEx’s latest venture also represents a turnaround of sorts for the company’s view of crypto. Chief executive Stephen Squeri has in the recent past expressed deep skepticism about the idea of supporting digital currencies. “We watch crypto more as an asset class,” Squeri told equity analysts in January during a morning call to discuss AmEx’s fourth-quarter 2021 results. “It’s not an intermediate-term threat to our business.” 

At the time, he said cryptocurrencies like Bitcoin are far too volatile, to form the basis for a payments product. “In the payments space, that’s a hard thing,” he said. “We’re probably not going to offer a crypto card.”

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