How Innovative Banks Use Cards to Grow Revenue, Earn Loyalty

There are 3.6 million opportunities for banks
to acquire new customers and deposits by providing access to credit designed
specifically for startups.

That’s because there are over 3.6 million
small businesses in the U.S. that have five or fewer employees, and unique
needs that traditional corporate cards just don’t meet. One bank worked with a
fintech to address those shortfalls with a new credit card aimed at startups –
a strategy that could help other banks unlock immediate revenue and long-term
deposits from niche customer segments.

Mid-sized banks typically rely on legacy technology providers or correspondent banks to issue credit cards, and larger banks often run their own programs in-house. But last month, Bank of the West and Brex – two San Francisco-based organizations – rolled out a co-branded commercial card program designed specifically for small companies.

The $91 billion asset institution partnered
with Brex instead of going it alone because the fintech offered some unique
advantages, says Dominique Fracchia, managing director and head of commercial
card for Bank of the West. Fracchia adds that, because Brex itself is a
startup, it has “a deep understanding of startups and their unique needs.”

Some of those needs are simple. For example,
new businesses need to build their own credit instead of relying on the
personal finances and guarantees of their founders.

Other needs are more complex. Businesses expect expense management tools, the ability to issue and manage multiple cards quickly and automatic receipt capture. Adding rewards into the mix can further complicate a community bank’s efforts to create a compelling commercial card program.

But running programs
like this is all Brex does. Its hyper-focus means it can specialize in a
particular vertical or segment, and that positions them to help banks design
card programs that meet particular needs. In addition, fintechs are usually
able to deliver more flexibility and creativity in supporting focused card
programs. For Bank of the West, that produced a small business product with a
laundry list of features, and fewer restrictions than a typical commercial

Fintechs can also provide access to customer
segments that the bank didn’t have previous relationships with. Brex refers its
startup clients to Bank of the West for more traditional services, so the bank
benefits from the fintech’s unofficial “seal of approval.”

When it comes to revenue growth, Bank of the West leverages the commercial card to capture interchange revenue while giving startup customers a concrete reason to move their deposits. If a business customer needs a higher credit limit, that can be underwritten based on the cash balance in the business’s deposit account at Bank of the West.

“There are thousands of startups, and many of
them will have more classical banking needs that we can support,” says
Fracchia. “Being able to provide full service from the beginning is very

It’s not lost on banks that business accounts
usually lead to other opportunities, yet most community institutions are
missing out, as big banks are already using commercial cards to acquire

Creating a new card program can serve as a defensive play. Brian Riley, director of credit advisory service for Mercator Advisory Group, says community banks without their own plans are “vulnerable” to Citigroup or JPMorgan & Chase Co. offering small businesses a high-balance credit card before “moving into other functions.”

“One of the good things about a small business
card is that you should be managing the growth of that company,” he says. This
often includes wealth management for the owner and treasury services for the

Banks of any size can issue new credit card
products to potential small business customers through fintech partnerships.
Customized card programs allow banks to tap into new markets and earn long-term
loyalty from segments that might be difficult to cater to without the right
technology partners.

Potential Technology Partners


The Brex corporate card was designed specifically for startups and features high credit limits, automated expense and receipt tracking and rewards. Brex has partnered with Bancwest Corp.’s Bank of the West and Boston-based Radius Bancorp, and plans to expand its bank relationships.


This New Zealand-based company was acquired by Visa in 2018. Its white-labeled commercial card platform allows a bank’s business customers to manage expenses and reporting. The company says its partners experience a 25% uplift in annual card spend as a result of the solution.


Deserve’s “card-as-a-service” platform can be leveraged for everything from issuance to chargeback management. It has been used by institutions like Sallie Mae to create unique cards focused on areas like student loan repayment.


Based in Denver, QRails helps banks issue prepaid cards and payroll cards that provide users with access to their wages as they’re earned. These products are particularly helpful for unbanked consumers that may not qualify for a traditional account.

Learn more about the technology providers in this piece by accessing their profiles in Bank Director’s FinXTech Connect platform.


Amber Buker

Amber Buker is the program director of FinXTech Connect, a curated online directory of bank-friendly fintech companies. She conducts interviews with senior bank leaders and technology executives, writes profiles on fintech companies and maintains a database of information that helps banks source potential technology partners. Prior to Bank Director, Amber served as the Program Director for the Arts & Business Council of Greater Nashville. She earned her Juris Doctor with honors and a certificate in intellectual property from Lewis and Clark Law School in 2015 and holds a bachelor’s degree in Psychology from Northeastern State University. Amber is a member of the Tennessee Bar Association, where she serves on the Executive Council of the LGBT Section of the state bar.