A Substitute for Cash that Improves Working Capital
Small and medium-sized enterprises (SMEs) are the driving force of the economy, accounting for 99% of economic units and generating over 70% of formal employment, according to Inegi data. However, most operate with cash, a practice that restricts their liquidity, planning capabilities, and access to formal financing.
Ricardo Medina, Vice President of Commercial Product Management & Account Development at American Express México, believes that business credit cards are a financial management tool and alternative to cash, as it overcomes the limitations of using only cash. Cash can hinder growth because it doesn’t leave a trace, doesn’t build credit history, and forces businesses to rely on immediate cash flow.
Flexibility and Control
Medina clarifies that American Express is not offering a conventional credit card but a financial management tool. “We are not a credit card with a minimum payment; we are a service card without a pre-set spending limit. We are a cash substitute that helps you finance your business.”
The model provides flexibility and control, crucial elements for any company. “There is a 30-day cutoff, along with a 20-day limit cutoff date. This means you can finance up to 50 days, which improves working capital, allowing you to collect sales before making payments, purchase assets or raw materials.”
This interest-free window of up to 50 days helps SMEs better organize their cash flows, take advantage of early payment discounts with suppliers, or invest in inventory without immediately compromising liquidity.
Moreover, it functions as a simplified form of factoring, since “you pay suppliers with the card and then pay the card.”
Financing for Growth, Not Just Paying Off Debts
Replacing cash with business card usage does not mean incurring debt but rather capitalizing on controlled financing that drives business growth.
We are a short-term credit that allows you to maintain financial discipline, which improves your credit standing because, as a cash substitute, what you spend must be paid, eventually granting you access to larger credit in the future.
This discipline not only enhances a company’s financial health but also enables access to larger credit products with better conditions in the future. Having a good track record with a service card is, in practice, a strong recommendation to any financial institution.
Control, Security, and Operational Efficiency
Medina explains that many SMEs already use cards for operational and business expenses, depending on the industry. They commonly use cards to pay road toll booths, airline tickets, hotel stays, transfers, meals, and business dinners. In offices, they use cards to pay for services like cable, phone, mobile, and cloud services.
The use of cards for advertising has also increased, as businesses previously hired agencies to handle ad payments. “Today, it’s a very affordable process, and any company can pay for advertising.”
Beyond facilitating payments, business cards centralize expenses, control budgets, and record transactions systematically. Unlike cash, each operation is recorded and verifiable, streamlining accounting and reducing risks.
Accompaniment Through Every Business Stage
The offering goes beyond just business cards; it’s about supporting SMEs throughout their growth. For example, when a company expands to multiple legal entities, they gain access to various services like additional cards that can be given to employees needing to make company-related expenses.
“We accompany you through your journey, from being an SME to becoming a medium or large enterprise. This way, financing isn’t just a line of credit but a growing system adapted to your structure and evolving needs.”
Benefits Extending Beyond Financing
Apart from credit, service cards offer additional rewards and benefits that can be reinvested in the business. These include cashback and travel benefits.
American Express also promotes networking and business development through initiatives like Amex Growth Sessions, workshops where entrepreneurs and SMEs learn from experts. This year’s specialists were Alejandra Ríos and Marcus Dantus, Shark Tank México investors, who shared tips on overcoming growth challenges.
For Medina, transitioning to business cards and modern financial services is not just a trend but a strategic necessity for Mexican SMEs. Replacing cash with business cards not only simplifies operations, enhances financial discipline, builds credit history, and expands growth opportunities.
