AmEx will give you up to $50 if you shop at small businesses

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.

Need an incentive to shop small?

Small businesses in particular are still reeling from the sudden onset of the virus-induced recession. They saw revenues plunge 40% in the U.S. between March and April compared to average sales in January, according to one economic data tracker assembled by Harvard and Brown University researchers.

Now American Express is trying to get this segment of the economy—representing 46% of U.S. GDP, and an increasingly important subset of AmEx customers—back on its feet. On Monday, the Wall Street mainstay said it would offer a new perk to each of its cardholders as a way to juice consumer spending at small businesses.

Shop small, earn $50

Here’s how the program works: Every time a participant spends $10 or more at a small business, they are entitled to $5 back. People can earn the reward up to ten times in a three month period for a maximum payout of $50. You can sign up till July 26th and the deal is valid until September 20.

AmEx has pledged $200 million to the effort, its largest ever such “shop small” campaign to date. The program is rolling out in the U.S., Australia, Canada, and the UK, and there are plans for similar offers to follow in France, Germany, Italy, Japan, Mexico, Spain, and elsewhere, the company said.

In addition, American Express said it would create a $10 million fund to support Black-owned small businesses in the U.S. as well. The demographic represents some of the hardest hit by fallout from the pandemic.

“The impact of this pandemic on small businesses has been especially hard,” said Elizabeth Rutledge, American Express’s chief marketing officer, in an email to Fortune. The company decided to implement the incentives because the return of customers to small merchants “is what they need most right now.”

Reprising prizes

AmEx has thrown its weight behind small business recovery before.

In 2010, in response to the housing related economic downturn, AmEx helped coax a new holiday into being, akin to Black Friday, called Small Business Saturday. Through an advertising blitz and rewards program, AmEx encouraged people to shop locally at small business on the Saturday after Thanksgiving.

After five years, AmEx phased out the rewards. But the spirit of the holiday persisted, bringing in $120 billion in reported consumer spending at local businesses in the U.S. on the day over the past 10 years, the company said.

During today’s crisis, AmEx saw an opportunity to take action just as it did during the Great Recession. While the company’s efforts usually coincide with the holiday shopping season, “we knew this year we couldn’t wait for Thanksgiving to get people spending at small businesses,” said Melanie Backs, an AmEx spokesperson, in an email.

Small businesses are big business

Small businesses have become an increasingly important part of American Express’s business.

In addition to being the U.S.’s biggest business card issuer, the bank makes money by processing transactions between shoppers and merchants. When people pay with AmEx cards, the company charges interchange fees that have historically been among the highest in the industry.

AmEx’s fees have recently fallen more in line with rivals. In 2018, the company charged an average of 2.3% per transaction versus Visa and Mastercard’s 2.26% and Discover’s 2.15%, according to data from Nilson Report, an industry tracker.

Due in part to its higher fees, American Express’s footprint historically lagged behind its rivals. Fewer merchants tended to accept its payments. That changed earlier this year.

In January, AmEx CEO and chairman Stephen Squeri boasted that the company has achieved “virtual parity” in terms of merchant acceptance as its biggest rivals, Visa and Mastercard. The company said that partnerships with third party payment processors and lower interchange fees helped incentivize more merchants to join AmEx’s network.

Given that AmEx takes a cut of payments that course through its network, it’s no wonder why it would wish to boost spending at small businesses.

Nearly two-thirds, or 62%, out of a total of 500 respondents to a recent AmEx study reported that, to stay in businesses, they need consumer spending to return to pre-coronavirus levels by the end of the year. Sales remain down about 17% today versus January’s average, according to the Harvard and Brown economic data tracker.

Government officials face a challenge in reopening economies state by state and country by country. They must balance public health against economic outlook, as the virus takes lives and businesses with it.

A recent JPMorgan study found a troubling link between consumer spending and virus infection rates. As economies have started to reopen and people have begun spending more money at restaurants, reported infection rates rise in tandem.

More must-read finance coverage from Fortune:

• Why black-owned businesses were hit the hardest by the pandemic
• George Floyd protests force Britain to reckon with its role in slavery, leading some companies to pay reparations
• This influential crypto CEO warns that hyperinflation will be “the next big problem”
• Looking to invest in companies that care about equality? This NAACP-backed ETF may be the answer
• 6 reasons Boeing’s financial picture may be brighter than most assume