It represents a significant break from the agency’s typical travel management offering. Not to be confused with Neo, Amex GBT’s booking and expense tool, Neo1 has been built for smaller companies that probably don’t care that much about travel.
The Ultimate Credit Card Play
Neo1 wants to cover all bases for smaller companies, offering budgeting, purchasing, expense management, reporting and reconciliation under one roof.
“If we’re going to be successful, we have to give clients what they need,” said Fiona Hastings, Neo1’s general manager. “And smaller businesses do not differentiate between travel and general business spend. They want a solution that covers both. They do not prioritize a trip to Boston over a new laptop. For them it’s spend.”
As a result, there’s ready-made integration with Amazon Business, while it’s built to plug into other ecosystems, including suppliers like Staples. And of course it comes with Amex GBT’s online travel booking and consultant support.
It can also integrate different credit cards, but there’s clearly affinity with the agency’s credit card namesake. There’s a lot activity in the travel and financial services space currently, and many companies see an opportunity to step in and help small business recover after the pandemic. Smarter, more digital procurement platforms will be in demand as companies look to streamline the way they run their business.
Cashflow comes into the equation too. Danish startup Pleo, for example, is targeting small companies and could offer them extra liquidity to gain market share.
“The line of credit and liquidity for smaller businesses, especially off the back of last year, it’s going to be a buoyant marketplace right now, and I think I would like to see the dust settle before any financial propositions are tighter integrated,” Hastings said. “And for smaller business, you’re banking relationship is still the lifeblood of your business, so they are still quite personal.”
Neo1 won’t stipulate that customers use American Express. “Forcing a payment tool on small and medium-sized companies, without giving them options, is probably not what our strategy is right now,” Hastings said. “We need to be open to payments, and we are open, but obviously we have close relationships with Amex and that continues to be the case with Neo1.”
American Express, meanwhile, offers Working Capital Management, which allows businesses to “supercharge” their cashflow, and offers access to up to $150,000 in funding. In August 2020, the credit card company bought Kabbage, a SoftBank-backed startup that provides cash flow management solutions to small businesses in the U.S.
Although Neo1 was launched in the UK in July 2020, it was in development before Amex GBT acquired KDS in 2016, and with it the Neo online booking tool. It took more than three years to build from scratch as Hastings said she didn’t want to repurpose any technologies. The UK provided a testbed.
“Our core bread and butter is travel, and as a travel business, in a year of Covid, it just took a little longer to get the statistics through the front gate to be able to report back,” Hastings said. “And we’ve got pretty tough governance, and rightly so because that’s our brand and reputation. We don’t just chuck stuff out there and hope that it works.”
On Monday, the Neo1 platform was officially launched in the U.S. “on a really solid footing.”
It’s a crowded marketplace, with the likes of TripActions Liquid also aggressively expanding. But where Neo1 could stand out is by helping customers with a different approach to pricing. Neo1 remains free in the UK until the end of the year, partly because it’s still being tested, while in the U.S. it will offer the first year’s subscription for free to the first 500 companies that sign up.
It will charge for the platform once the market conditions and customer experience of the platform has been validated, Hastings said, but she then wants to experiment, inspired in part by American Express’s Shop Small initiative.
“I’m trying to entertain and run some tests on how do we create a more ethical and environmntally driven pricing model where companies can see the direct contribution,” she said, echoing Emburse’s own push in that direction, although there’s been no formal launch as yet.
“I don’t have the answer, but we all need to challenge ourselves and be a lot more creative about how we interject a social and environmental play when it comes to subscription pricing,” she added. “It’s not just pounds on users per month that gets cheaper as you get bigger, because there are bigger problems we can all contribute to solving, and especially in travel.”