Just swipe your American Express credit card to buy… a non-fungible token of R&B singer SZA?
American Express is making its debut into NFTs, the digital media phenomenon that has excited collectors enough to spend as much as $70 million for rights to digital artwork anyone can search for online.
American Express wants in on the craze, and it has started with NFTs for images of “Good Days” singer SZA, who was recently featured in a virtual concert hosted by the credit card company.
Amex is selling 14 NFTs featuring the singer’s performance. It released 10 of the tokens, sold by NFT developer Fanaply, to concert attendees for a price tag of $100 a pop. The other four were put on sale the evening of July 12 to anyone with an Amex card for the same price.
The response was immediate. “The first drop sold out,” a company spokeswoman said in an email.
American Express had been watching the NFT space emerge over the last year as a way for fans to connect with artists and creators, according to the spokeswoman, who said that card members had also expressed interest in the space. The company doesn’t have any other confirmed plans right now for other NFTs, although it intends to release more in the future.
NFTs are one way that credit card companies are tapping into blockchain innovation—innovation that some say is a threat to their own business models. NFTs are essentially a blockchain-based certificate of authenticity for a digital asset—not the asset itself. Individuals can buy the rights to it, which will forever be stored on the blockchain, making it attractive to collectors.
Credit card companies including Amex, MasterCard and Visa have all been discussing ways to harness blockchain technology for years now. MasterCard recently said its customers could get crypto rewards on purchases, and it plans to start supporting certain coins on its network. Visa is leaning into crypto “in a very, very big way,” its CEO, Al Kelly, said on the company’s latest earnings call April 27. Currently, its customers can pay via digital currency, and it works with 35 platforms or wallets to enable its cardholders to convert digital currency to fiat, so they can use it to spend at merchants.
Credit card companies may feel an urgency to innovate in the space—to be part of the next iteration of innovation rather than have it emerge at their own expense. Ethereum founder Vitalik Buterin has said that blockchain and the tech built on top of it, like smart contracts, could steal business from, or even replace, major credit card companies in only a matter of years.
“I do think that [credit card companies are] being quite progressive in playing in these spaces that they didn’t a few years back because of that sense of risk,” says Carey O’Connor Kolaja, CEO of automated identity verification and fraud prevention company AU10TIX, which works with credit card companies and other financial institutions. “The pandemic was clearly an accelerant for a lot of industries that may have been playing around the edges,” she says, adding that the future of credit scores and lending isn’t clear.
Major credit card companies are evidently bullish on blockchain innovation—and so are consumers. Particularly for NFTs, there was nearly $2.5 billion spent on the tokens in the first six months of 2021, according to a DappRadar data.
NFTs have piqued Kolaja’s interest, too—particularly what she calls the “next generation” of athlete card trading that is happening online. Whether the valuations for these certificates can stay as high as they’ve been, “the jury’s out to me,” she says.
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