American Express Co (AXP) |
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American Express Co's Comment on Competitors and Industry Peers
Our 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). We are the fourth largest
general-purpose card network on a global basis based on purchase volume, behind
Visa, MasterCard and China UnionPay. In addition to such networks, a range of
companies globally, including merchant acquirers and processors and companies
such as PayPal, carry out some activities similar to those performed by our GMS
and GNS businesses. No other single entity engages on a global basis in the full
range of activities that are encompassed by our closed-loop business model.
Another aspect of network competition is the recent emergence and rapid growth
of alternative payment mechanisms and systems, which include aggregators (such
as PayPal, Square and Amazon), wireless payment technologies (including using
mobile telephone networks to carry out transactions), electronic wallet providers,
prepaid systems and systems linked to payment cards, and bank transfer models
such as ACH and wire transfers.
New technologies, together with the portability provided by smartphones and
tablets and evolving consumer behavior with social media and networking, are
rapidly changing the way people interact with each other and transact business
all around the world. Traditional and non-traditional competitors such as mobile
telecommunications companies and aggregators are working to deliver digital
and mobile payment services for both consumers and merchants. Competition remains
fierce for capturing and maintaining online and mobile spend in the ever-increasing
digital world, and alternative business models present a significant challenge.
For example, aggregators like PayPal have the ability to provide payment services
to merchants for multiple payment networks. In addition, new entrants to the
digital payments space such as online, social media, telecommunications and
technology companies represent additional competitive and potentially disintermediating
factors in the card payment industry given the scale of their customer relationships,
large cash reserves and other resources available to develop new platforms and
technologies, and their strategies to use payments as a tool to support other
sources of revenue.
To the extent alternative payment mechanisms and systems, such as aggregators,
continue to expand successfully, discount revenues and potentially other revenues,
as well as our ability to access transaction data through our closed-loop network,
could be negatively impacted. In the United States, alternative payment vehicles
that seek to redirect customers to payment systems based on ACH continue to
emerge and grow, merchants with recurring billing models actively seek to switch
customers to payment through direct debits from bank accounts, and existing
debit networks also continue to expand both on- and off-line and are making
efforts to develop online PIN functionality, which could further reduce the
relative use of charge and credit cards online.
Some of our competitors have attempted to replicate our closed-loop functionality.
JPMorgan Chase announced it would partner with Visa to develop Chase Merchant
Services. Efforts by some card networks, payment providers and non-traditional
competitors to replicate the closed loop reflect both its continued value and
the intensely competitive environment in which we operate.
Our proprietary Card business encounters substantial and intense competition
in the United States and internationally. As a card issuer, we compete in the
United States with financial institutions that issue general-purpose charge
and revolving credit cards (such as Bank of America, Capital One Financial,
Citibank, Discover Financial Services and JPMorgan Chase). We also encounter
competition from businesses that issue their own private label cards or otherwise
extend credit to their customers, such as retailers and airline associations,
although these cards are generally accepted only at limited locations. In recent
years, we have faced increasingly intense competition in the small business
sector, as competitors have targeted OPEN’s customer base and our leadership
position in providing financial services and other fee-based solutions to small
businesses.
The largest competing issuers have continued to grow, in several cases by acquiring
card portfolios, and also by cross-selling through their retail branch networks.
Competing card issuers offer a variety of products and services to attract cardholders,
including premium cards with enhanced services or lines of credit, airline frequent
flyer program mileage credits, cash rebates and other reward or rebate programs,
services for small business owners, “teaser” promotional interest
rates and rewards points for both credit card acquisition and balance transfers,
and co-branded arrangements with partners that offer benefits to cardholders.
Most financial institutions that offer demand deposit accounts also issue debit
cards to permit depositors to access their funds. Use of debit cards for point-of-sale
purchases has grown as most financial institutions have replaced ATM cards with
general-purpose debit cards bearing either the Visa or MasterCard logo. Debit
cards were historically marketed as replacements for cash and checks, and transactions
made with debit cards have typically been for smaller dollar amounts. However,
debit cards are increasingly perceived as an alternative to credit or charge
cards and used in that manner. Additionally, overdraft accounts can be used
by our competitors to extend credit to customers when transaction values exceed
monies available in a linked demand deposit account.
The corporate payments sector is dynamic and highly competitive, with much
overlap between corporate and consumer payment cards and services and competition
increasingly intense at both the payment provider and network levels. We are
seeing increased product and price competition from payment providers, including
larger regional and national banks. Customers are increasingly seeking payment
products that integrate with their expense management tools and support electronic
payment methods. With respect to competition at the network level, both Visa
and MasterCard continue to support card issuers such as Citibank, JPMorgan Chase
and U.S. Bank, including by improving data collection and reporting to meet
customers’ requirements. In addition to product and price competition,
other key competitive factors in the corporate payments business include global
servicing capability, quality of data, and access to additional services, such
as reporting and program management tools, and customer experience.
GBT continues to adjust to the shift of its clients’ preferences, and
the resulting shift of some volume, from high-touch personal service to online
channels and automated servicing tools. GBT also continues to face intense competition
in the United States and internationally from numerous traditional and online
travel management companies, as well as from airlines’ direct-to-consumer
business, other travel suppliers, accredited in-house corporate travel agents
and new entrants to the travel industry. Competition among travel management
companies is mainly based on price, service, value creation, convenience, global
capabilities and proximity to the customer.
For many years, consumer and business travel agencies (including travel management
companies) have faced pressure on revenues from airlines, as most airlines have
stopped paying “base” commissions to travel agents for tickets sold
and significantly reduced other forms of travel agent compensation. Airlines
have also made efforts to increase the number of transactions booked directly
through their websites. These trends have reduced the revenue opportunities
for travel management companies because they do not receive distribution revenue
from transactions booked directly with the airlines. In recent years, the airline
industry has undergone bankruptcies, restructurings, consolidations and other
similar events including expanded grants of antitrust immunity to airline alliances.
This antitrust immunity enables otherwise independent airlines to closely coordinate
their international operations and to launch highly integrated joint ventures
in transatlantic and other regions. These types of structural changes may result
in additional challenges to travel management companies.
Overall company Market Share Q4 2023 |
*Market share is calculated based on total revenue.
News about American Express Co Contracts |
American Express Opens Largest Centurion Lounge at Atlanta Airport, Reports Strong Financial GrowthAmerican Express (NYSE: AXP) is set to open its largest Centurion Lounge at Hartsfield-Jackson Atlanta International Airport (ATL) on February 14. Spanning nearly 26,000 square feet, this lounge will become the largest in the Centurion Lounge network. The new facility will offer a locally-inspired menu curated by Atlanta-based Chef Deborah VanTrece, an array of seating options, outdoor terraces with views of the airfield, and The Reserve.The decision to expand the Centurion Lounge network at Atlanta Airport, which is the busiest airport in the world, comes as a strategic move by American Express to enhance thei...
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American Express Expands Partnership with Argentine National Teams, Showcasing Strong Financial PerformanceIn an exciting development, the Argentine Football Association (AFA) and American Express (NYSE: AXP) announced the expansion of their sponsorship agreement at a celebratory event held at Amex's headquarters in New York. American Express has now become a Global Sponsor of the Argentine National Teams until 2026, encompassing the Men's National Team, Women's National Team, and Youth National Teams. This milestone agreement was marked by the presence of none other than the esteemed coach of the Argentine National Team, Mr. Lionel.In addition to this remarkable partnership, American Express has garnered si...
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American Express Returns to Miami with PLAY by American Express Platinum, A One-of-a-Kind Interactive Gallery during Art Week This year, American Express is making a splash in Miami with an immersive and interactive gallery called PLAY by American Express Platinum. The one-of-a-kind gallery, in collaboration with PlayLab, Inc. and Mattel Creations, features reimagined iconic toys as limited edition collectibles and art pieces. Visionary artists including Salehe Bembury, Eny Lee Parker, Surin Kim, Serban Ionescu, and Kumkum Fernando have contributed their unique creations to be showcased and available for sale in the gallery. American Express is known for its innovative approach to engaging its c...
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