American Express company has a legacy of more than 150 years. It was started as an express mail company in 1850. This presentation gives a brief overview of the company, its history, its current business model and key products.

1. AMERICAN EXPRESS COMPANY
A Research by Hassan Khan
2nd February 2015

2. 1850
•Started as an express mail business in Buffalo, New York.
•Was an instant success throughout New York state primarily
because US Postal Service was slow and expensive.
1882
•Launched money order business to compete with the US Post Office’s
money order.
1891
•Introduced Traveler’s cheques in denominations of $10, $20, $50 and
$100. Travelers Cheques established American Express as an international
company.
•Within 10 years was selling more than $6 million in cheques annually.
1903
•Had assets of $28 million, second only to the National City Bank of
New York, among financial institutions in the city.
1914
•At the outbreak of World War I, American Express offices in Europe were
among the few companies to honor the letters of credit (issued by
various banks) held by Americans.
1917
•All contracts between express companies and railroads were nullified. This
ended American Express’s express business.
Early History (1850 to 1917)

3. Modern History
1940s
•In 1947, US Government licensed AMEX to provide banking services
to US military personnel and their families stationed abroad.
1950s
•Significantly expanded international banking operations, military
banking offices grew from 9 to 194.
•Issued first charge card in 1958. Elvis Presley was among earliest card
members.
1960s
•More than 1 million cards were in use at approximately 85k
merchants worldwide.
•Launched Gold Card in 1966.
1980s
•Shifted focus on core businesses and shed non core activities.
•In 1986, earnings exceeded $1 billion.
2000s
•Company celebrated its 150th anniversary.
•Became world leader in providing charge and credit cards to
consumers, small businesses and corporations.

4. Pre Cards 1950s 1960s 1970s 1980s 1990s 2000s
•Banks
•Businesses
•International
Travelers
•Upper Class
Businessmen
•One stop
Travel
shoppers
•Older,
Successful,
affluent
businessmen
•Young, Urban
professional
women
•Young men
•Students
•Seniors
•Small
Businesses
•Ultra High Net
Worth
•Shoppers at
mass
merchandisers
(middle class)
•Computer
owners &
users.
•Small &
Medium size
businesses
•Affluent
investor class
•Younger
minded, active
Urban adults
•JetBlue type
customers
Target Customers
•Money Orders
•Travelers
cheques
•American
Express Charge
Card
•American
Express Gold
Card
•American
Express
Platinum Card
•American
Express
Centurion
(Black) Card
•American
Express Blue
•Blue Cash
•Express Pay
•American
Express OPEN
•American
Express Red
Card
Product Offerings

5. 109.9
million
card-in-force
Fortune 500 RANKING: 90
$156B in total assets
$952.4B
worldwide
billed business
62,848
employees worldwide
$35 billion
in annual
revenue140+ countries
Net income $5.36B
Headquartered
in New York City
24% of Credit
Cards transactions
Volume in US
Among
30components
of DOW
Jones
industrial
average
Ranked No.1by J.D. Power and Associates in terms of overall customer satisfaction for last 7 years.

6. Cardholder
TransactionMerchant
American Express benefits from its
CLOSED LOOP MODEL
American Express is the Card Issuer, Card
Network AND Merchant Acquirer. They
have a direct relationship with both the
Cardholder and the Merchant.
VISA benefits from its
OPEN LOOP MODEL
Visa’s clients are primarily banks and
financial institutions, known as issuers,
who issue cards bearing the Visa logo to their
customers.
Cardholder data such as spending behavior and location
help in providing customized offers to retain customers.
Amex can also leverage the information provided by its
network to maintain relationships with merchants. It
offers merchant financing to selected merchants.
Transaction
Cardholder
Merchant
Acquirer
Issuer

7. American Express model is
SPEND CENTRIC
Primary source of revenue is the discount fee
charged to merchants.
VISA model is
TRANSACTIONS CENTRIC
These fees are charged as a percentage of the
charge amount processed for the merchant and
account for 65% of the company’s revenues
Also earns interest on loans issued to
cardholders, membership fees from its
cardholders and other revenues based on travel
services offered.
The revenue model does not depend on the
volume of transactions processed, but rather on
the total amount spent by the customer.
Targets affluent customers who are likely to
spend more.
Visa charges data processing fees and service
fees from its financial clients and is not involved in
the lending process.
Thus, it is not exposed to any credit risk and
earns revenue on the volume of transactions
carried out through its cards.

8. Share of Merchant Transactions
Visa Debit Cards 39.29%
Visa Credit Cards 22.78%
MasterCard Debit Cards 11.88%
MasterCard Credit Cards 14.95%
American Express 3.91%
UnionPay Debit Cards 2.86%
UnionPay Credit Cards 3.17%
JCB 1.05%
Diners Club 0.11%
•Visa has more than 2 billion cards in
use worldwide and processes more than
60 billion transactions per year, while
AmEx has just 110 million cards in force
and processes just 6 billion transactions
per year.
•Despite this disparity, American
Express has annual gross revenues of
$35 billion while Visa earns just $14
billion per year.
•Average Amount per transaction for
AMEX is $150 compared to $91 for Visa.
Source: Nilson Report 2014

9. INDEPENDENT OPERATORS (IO)
• Licensed to issue AXP CL cards, including
the classic Green, Gold and Platinum
Cards
• For markets in which they do not have a
proprietary card business
• Their IO partners also serve as AXP
merchant acquirer
• Ownership of customers remains with
Partner
• Support from AMEX product &
marketing teams to deploy and
communicate proprietary assets
• Licensed to issue AXP BBL cards
• Exist in markets alongside proprietary
business
• Ownership of customers remains with
Partner
• Card Face can be custom-designed to
partners’ preferences
• Only the Blue Box and hologram is
taken up with Amex Brand
• Support from product & marketing
teams
NETWORK CARD LICENSE (NCL)
Blue Box Line (BBL)Centurion Line (CL)
AMEX authorizes other banks to either acquire or issue on AMEX behalf,
primarily in countries where AMEX would have little or no presence.
BAFL will be the first Independent Operator for AMEX in Pakistan

10. Ultra High
Net Worth
High Net
Worth
Affluent
Mass
Affluent/
Mass
Centurion Line Blue Box Line
Customer
Segments
Premium Cobrands
BBL
[“Exceller”]
BBL
[“Platinum Plus”]
Charge Credit
Premium Product Range

11. Centurion Line products are the flagship products and the face of American Express. Each product
has a distinct positioning, particularly Centurion charge products.
Ultra High
Net Worth
High Net
Worth
Affluent
Mass Affluent
Mass
Charge Credit Positioning
Uniquely crafted & personally
delivered
An enhanced travel experience
and world of rewards for the
season traveler & their family
Open the doors to more
rewarding journeys
Fueling your passion for life
Centurion Line Products

12. Green Gold Platinum
Welcome Offer $0 Annual fee for
first year
$0 Annual fee for
first year
Earn 40,000 points
on spend $3,000 in
first 3 months
Annual Fee $95 $125 $450
Roadside Assistance Hotline YES YES YES
Car Rental Loss & Damage Insurance YES YES YES
Travel Accident Insurance YES YES YES
Baggage Insurance Plan YES YES YES
Priority PassTM Select YES
$200 Airline Fee Credit YES
International Airline Program YES
Extended Warranty on Shopping YES YES YES
Entertainment Access YES YES YES
Access to Once-In-a-Lifetime Events YES
Personal Concierge YES
Charge Cards
Products & Benefits

13. Product Offerings in nearby markets
Charge Cards Credit Cards Co-Brand Travel
India
Centurion
•AMEX Gold Card
•AMEX Platinum
Card
Platinum Reserve
Credit Card
Platinum Travel
Credit Card
Blue Box
•PAYBACK Credit
Card
•MakeMyTrip
Credit Card
Jet Ways
Platinum Credit
Card
Bangladesh
Centurion
•AMEX Credit
Card
•Gold Credit Card
•Platinum Credit
Card
Blue Box
Malaysia
Centurion
•AMEX Gold Card
•AMEX Platinum
Card
•Gold Credit Card
•Platinum Credit
Card
Blue Box
Singapore
Airlines KrisFlyer
Credit Card