Profile: American Express Co (AXP.N)
19 Dec 2014
American Express Company, incorporated on June 10, 1965, is a global services company. The Company’s principal products and services are charge and credit payment card products and travel-related services offered to consumers and businesses worldwide. The Company operates in four segments: U.S. Card Services, International Card Services, Global Commercial Services (GCS) and Global Network & Merchant Services (GNMS). The U.S. Card Services segment issues a range of card products and services to consumers and small businesses in the United States and provides consumer travel services to card members and other consumers. The International Card Services segment issues consumer and small business cards outside the United States. GCS offers global corporate payment and travel-related products and services to large and mid-sized companies. GNMS operates a global payments network, which processes and settles proprietary and non-proprietary card transactions.
The Company’s range of products and services includes charge and credit card products; expense management products and services; stored value/pre-paid products such as American Express Serve, Bluebird and Travelers Cheques; network services; merchant acquisition and processing, servicing and settlement, and point-of-sale, marketing and information products and services for merchants, and fee services, including fraud prevention services and the design of customized customer loyalty and rewards programs. The Company’s various products and services are sold globally to diverse customer groups, including consumers, small businesses, mid-sized companies and large corporations. As a part of its card-issuing business, the Company’s United States banking subsidiaries, Centurion Bank and AEBFSB, issue a range of card products and services to consumers and small businesses in the United States. It issues its charge and credit cards in numerous countries around the globe. In its Global Commercial Services (GCS) segment, it provides expense management and travel services to companies and organizations worldwide through its Global Corporate Payments and Global Business Travel businesses.
Global Network & Merchant Services
GNMS acquires merchants, provides point-of-sale products and services, and leverages its closed-loop network to offer multi-channel marketing programs and capabilities, services, and reporting and analytical data to its merchants around the world. The Company’s Global Merchant Services (GMS) business provides the Company with access to transaction and merchant data through its closed-loop network, which encompasses relationships with both the Card Member and the merchant. This capability helps it acquire new merchants, deepen relationships with existing merchants, process transactions, and provide targeted marketing, analytics and other value-added services to merchants on its network. In addition, it allows it to analyze trends and spending patterns among various segments of its customer base. The Global Network Services (GNS) business has established 148 Card-issuing and/or merchant-acquiring arrangements with banks and other institutions in 136 countries. The Company’s GNS arrangements fall into three categories: Independent Operator Arrangements, Network Card License Arrangements and Joint Venture Arrangements.
The Company’s GMS business builds and maintains relationships with merchants, processes Card transactions and settles with merchants that choose to accept Cards for Card purchases (Charges). The Company sign merchants to accept Cards and provide marketing information and other programs and services to merchants, leveraging the capabilities provided by its closed-loop network. The Company also offers point-of-sale products and services, support for Card acceptance, fraud prevention and other value-added services. GMS is focused on understanding and addressing factors that influence merchant satisfaction, including developing and executing programs that increase Card usage at merchants, using technology resources and marketing tools such as social media, and applying its closed-loop capabilities and deep marketing expertise. In the United States, the Company also offers its merchants a range of point-of-sale solutions, including integrated point-of-sale terminals, software, online solutions and direct links that allow merchants to accept American Express Cards (as well as credit and debit cards issued on other networks and checks).
The Company’s global card network competes in the global payments industry with other card networks, including, among others, Visa, MasterCard, Diners Club International (which is owned by Discover Financial Services), Discover (primarily in the United States) and JCB and China UnionPay (primarily in Asia). Local regulations governing the issuance of charge and credit cards have not been a factor impacting GNS’ arrangements with banks and qualifying financial institutions, because such banks and institutions generally are already authorized to issue general-purpose cards and, in the case of its IO arrangements, to operate merchant-acquiring businesses.
U.S. Card Services
The Company’s consumer travel business, which provides travel services to Card Members and other consumers, complements its core Card business. The Company offers individual consumer charge Cards such as the American Express Green Card, the American Express Gold Card, the Platinum Card and the Centurion Card, as well as small business charge Cards. The Company also offer revolving credit Cards such as Blue from American Express, Blue Cash Everyday Card from American Express, Blue Sky from American Express and, for small businesses, Blue for Business Credit Card and SimplyCash Business Card. The Company’s charge Cards, which generally carry no preset spending limits, are primarily designed as a method of payment and not as a means of financing purchases of goods or services. The Company issue Cards under co-brand agreements with selected commercial firms in the United States.
On certain Cards the Company charge an annual fee that varies based on the type of Card and the number of Cards for each account. The Company also offers many revolving credit cards, on which it assess finance charges for revolving balances. Depending on the product, it may also charge Card Members an annual program fee to participate in the Membership Rewards programs and fees for account performance ( late fees) or for certain optional services. The Membership Rewards program from American Express allows Card Members to earn one point for virtually every dollar charged on eligible, enrolled American Express Cards, and then redeem points for a array of rewards, including travel, retail merchandise, dining and entertainment, financial services and donations to benefit charities.
American Express Travel & Lifestyle Services is focused on delivering premium travel and related services to Card Members and other consumers in the United States and internationally. Services are provided through travel counselors, consumer travel websites in nine countries and the United States American Express Travel Representative Network (which consists of independently-owned travel agencies that license the American Express Travel brand). The United States consumer travel Website, amextravel.com, and its international websites offer a range of travel rates and discounts on airfares, hotels, car rentals, cruises and vacation packages, with offline customer service available. The Company also provides Card Members benefits in some countries, such as earning one extra Membership Rewards point for each dollar spent when booking eligible travel using an American Express Card enrolled in the Membership Rewards program.
International Card Services
The Company offers programs and services in its international card-issuing business as it does in its United States issuing business. Also, as in the United States, it issue cards internationally under distribution agreements with financial services institutions. As in the United States, the Membership Rewards program is a strong driver of Card Member spending in the international consumer business. The Company’s redemption options include travel, retail merchandise, entertainment, shopping and recreation gift certificates, experiences, financial services and donations to benefit charities. The Company also offers the flexibility of payment for travel services by allowing International Consumer Card Members to use their Membership Rewards points to pay for their travel purchases and other charges in 15 countries outside the United States.
Global Commercial Services
American Express is a provider of corporate payment solutions and a travel management company for businesses worldwide. Global Corporate Payments (GCP) offers a range of payments and expense management solutions to companies worldwide through our Corporate Card Programs and Business-to-Business Payment Solutions. The American Express Corporate Card is a charge card that individuals may obtain through a corporate account established by their employer for business purposes. Through its Corporate Card Program, companies can manage their travel, entertainment and everyday business expenses and negotiate more effectively with suppliers, among other benefits.
GCP offers companies and individual Card Members the ability to manage their Corporate Card Programs, and offers companies the ability to manage their Business-to-Business Payment Solutions, on a round-the-clock basis through a suite of secure Web-based online tools. American Express Global Business Travel (GBT) offers globally integrated online, offline and mobile travel solutions, which are designed to help its clients service their traveling employees and manage and optimize their travel expenses. GBT provides the services to its corporate clients, which include small to mid-size businesses, and large, multinational and global companies: full-service online and offline travel booking and reservation services and support; travel program management services; consulting services; and meetings and events management services.
Corporate & Other
Corporate & Other consists of corporate functions and auxiliary businesses, including the Company’s Enterprise Growth Group, as well as other company operations. Its Global Services consists of divisions, which include World Service, Global Business Service, Global Credit Administration and Technologies. The Company’s U.S. and international service organizations are consolidated under World Service. The Global Business Services division is a shared services organization that includes procurement, real estate, financial operations and processing, and business transformation. Global Credit Administration (GCA) is responsible for the management of its credit, collections and fraud operations around the world.
The Company competes with Visa Inc., MasterCard International, Inc, Discover Financial Services, Discover, JCB, China UnionPay, PayPal, Bank of America, Capital One Financial, Citibank, JPMorgan Chase, Banco Santander, U.S. Bank and HSBC.
American Express Co
50TH FLOOR, 200 VESEY STREET
NEW YORK NY 10285-0001