American Express Has Regained Ground In The U.S. Card Market, But Competition Remains Fierce

by Trefis Team
-10.70%
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98.55
Market
88.00
Trefis
AXP
American Express Company
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American Express is gradually recovering from the setback it experienced in mid-2016, when it lost out to Citi for the right to issue Costco cards. The card giant has done well to hold on to its market share of 10% over recent quarters despite facing stiff competition from JPMorgan and Citigroup. While JPMorgan has been targeting American Express’ core affluent customer base over recent years, Citigroup has focused considerably on co-branding partnerships to grow its card portfolio.

The credit card purchase volume for individual issuers is taken from their respective quarterly earnings releases. Figures for American Express and Discover represent purchase volumes only for cards issued by them, with purchases made on AmEx or Discover-branded cards issued by other banks included in the total figure for the issuing bank. The total U.S. card purchase volume is as detailed by us in our previous article.

While JPMorgan has a sizable lead over competitors in terms of card purchase volumes thanks to its position as the largest issuer of credit cards in the country, Citigroup displaced American Express from the second spot in Q3 2016, when the transfer of the Costco card portfolio was finalized. Notably, the six largest card issuers accounted for almost 61% of the total credit card purchases in Q2, with the top four issuers garnering a market share of nearly 50%.

As detailed in the table above, the largest card issuers have seen their purchase volumes grow 11% y-o-y – better than the 10% growth witnessed by the overall industry. JPMorgan 15% growth figure stands out here, as it represents organic growth, and is very likely the result of strong growth in its affluent customer base.

The chart below captures the change in American Express’s average cardholder spend in the U.S. You can understand how changes to this figure affect our price estimate for the company by making modifications here.

See full Trefis analysis for JPMorgan ChaseBank of America | Citigroup | Capital OneAmerican Express | Discover

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