Equity Bank has bagged a lucrative deal with global plastic card company American Express (AmEx), stepping up the race for market share amid a growing battle among lenders for cashless payments income.

Equity Bank will be the exclusive issuer of AmEx-branded cards in Kenya, Uganda and Tanzania, in a partnership that will also see the lender design products for American Express holders and handle customer relations including managing clients’ billing and credit.

The regional lender will also sign up businesses that accept AmEx cards in the three countries issuing them with point-of-sale (PoS) machines that accept American Express debit and credit cards.

“Equity Bank recently sealed an operating deal with American Express, the world’s largest credit card company by purchase volume,” the bank said in a press statement.

Card business is emerging as lucrative revenue stream for banks, which are taking advantage of growing migration towards cashless transactions that is partly driven by new government regulations.

Equity Bank reported a 58 per cent growth in its payment processing and merchant business for the first three months of the year to a turnover of Sh1.8 billion, earning it commissions of Sh41 million.

“The partnership with American Express will also afford the bank a rare opportunity to serve American Express card members visiting the East Africa region.”

Barclays Bank also signed a merchant-acquisition deal with AmEx in 2005, which however, did not give it a mandate to issue the American company’s cards. By giving Equity Bank the right to issue its cards, American Express —which currently has over 107.2 million active cards worldwide— is looking to grow its customer base.

Other technology firms such as Google have also joined a fierce battle for the region's payments solutions market, which has gained momentum from the planned cessation of cash transactions in government, public transportation and the success of mobile money platforms.

The growth in cashless transactions has whetted the appetite of banks who stand to rake in billions in commissions they charge the merchants who use their PoS terminals. Global companies like Visa, MasterCard and American Express charge merchants a commission which is a percentage of the transaction value when customers use their systems.