Brex Applies For Bank Charter

Filed Under: Banking, Business
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Brex has just made an announcement that should allow it to offer even more services to businesses. This has the potential to be some exciting new competition in the business credit card space, especially with Brex having its own points currency.

Brex will have a wholly-owned subsidiary bank

Business financial services company Brex has submitted an application with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions (UDFI) to establish Brex Bank, which would be a wholly-owned subsidiary of Brex. Brex Bank would be an industrial bank located in Draper, Utah.

Up until now Brex has been focused on taking a new approach towards business financial services, by combining payment products with financial software. With this, Brex has become the operating system for thousands of businesses. Up until now Brex hasn’t had its own bank, but rather has used Emigrant Bank as the issuer for its Brex Card.

With this announcement, Brex has hired Bruce Wallace as the proposed CEO of Brex Bank. He previously worked at Silicon Valley Bank (SVB) as the Chief Operations Officer, Chief Digital Officer, and Head of Global Services.

Brex Card is currently issued by Emigrant Bank

What will change with Brex having its own bank?

With Brex Bank being formed, Brex plans to expand its existing suite of financial products and business software, offering credit solutions and FDIC insured deposit products to small and medium-sized businesses (and just to be clear, deposits with Brex’s partner banks are already FDIC insured).

The current Brex Card that’s issued with Brex Cash accounts is essentially a hybrid between a debit card and a credit card — it’s a World Elite Mastercard that earns rewards like a credit card, while your spending is automatically debited from your Brex account like a debit card.

With Brex Bank being formed, presumably Brex could start issuing actual credit cards with credit limits, financing, etc.

Brex has been innovative in terms of its offerings, and I’m just excited to see another competitor enter the market, with the potential to expand significantly over time. Brex is extremely well funded, having amassed nearly $500 million in venture capital funding to date. Maybe we’ll see the company go up against the likes of Amex and Chase with its product offerings.

What I appreciate about Brex is that unlike other fintech companies, Brex also has a focus on rewards, and even has a transferable points currency.

Brex has a transferable points currency, and we could see that expand further

Open a Brex Cash account and earn 110K points

One of Brex’s newest products is Brex Cash, which is a no-fee business cash management account. Opening a Brex Cash account is an incredible opportunity, given that you can earn up to 110,000 points (exclusively for OMAAT readers), there’s no credit pull, and again, the account has no fees. Points can be redeemed for one cent each, or can be transfered to several airline partners at a 1:1 ratio, so that’s potentially exceptionally valuable.

You can read all about Brex Cash in the below posts:

Ready to earn rewards for your business spend?

Open a Brex Cash Account for your registered business here

Bottom line

Brex plans on forming Brex Bank, which will be a wholly-owned subsidiary that will allow the fintech company to expand its product offering. It’s always great to see some innovation in the banking and credit card space, and I can’t wait to see what Brex comes up with over time.

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  1. The ACH number associated with my Brex accounts is with Radius bank in Boston. Perhaps they are changing associations.

  2. Last week I participated in a focus group interview for their upcoming credit card. Seems like it will be a similar reward structure as the current cash card.

  3. Re: bhcompy. The Brexit referendum took place 23 June, 2016 and Brex was founded January 3, 2017 – so you’re completely right. Very peculiar. BR maybe for Brazil (origin of founders) and Ex for what? Exchange? Excitement? Maybe the only four letter domain name they could muster?? Still waiting for approval (likely denial) on this.

  4. One would think the 777 grounding would be bigger news…but I guess you haven’t found a way to monetize that story yet…

  5. For some reason I can’t log in to Ask Lucky to respond to Tiffany, but BREX is unable to process a single in-person international transaction with its Mastercard product. Not one. The CS # on the back goes to Brex and they want you to whitelist the merchant. I was told that repeatedly. So forget about using this card when you’re out of the country. You’re a travel site with high-end clientele and the hassle of trying to use this product is utterly ridiculous. Getting your card declined at luxury resorts and restaurants is embarrassing. Calling in after EVERY attempt to unlock the card while you’re half way around the world is insane. The advice I was given multiple times was “call us and then go back to the merchant 24 hours later for processing.” Really? That’s your advice when dining out? Guess I’ll be washing dishes in the back.

  6. @Rafael, perhaps.

    The constant pushing of this product in spite of consistent reports from readers that the product is abominable in conjunction with trying to tamp down any discussion of the innumerable complaints by having Tiffany serve as a sort of customer service back channel is pretty bizarre.

    At the very least, all of these posts should carry a warning at the top regarding the freezing of accounts, slow approvals, and absent communication.

    Not sure if OMAAT doesn’t appreciate the reputational damage for people that operate businesses or if it’s a calculated move to monetize the blog and let it wither like many hedge fund takeovers in media that extract value without reinventing in the product…

  7. Brex is not ready for primetime yet. They need to invest more in their infrastructure and relaunch later this year.Lucky you should stop pumping them.

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