How Big Is American Express’ Commercial Card Business?

by Trefis Team
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AXP
American Express Company
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American Express (NYSE: AXP) is a global financial services company and its principal products and services include charge cards, credit cards, and travel-related services to consumers and businesses. The company operates a closed-loop payments network, where it acts as an issuer of cards as well as an acquirer (or payment processor) for these cards. Trefis highlights the key sources of American Express’ Revenues in an interactive dashboard along with the forecasts for 2020. The company’s Global Commercial Services segment contributed just over 30% of Amex’s $40 billion in total revenues in 2018

 

Total Revenue growth of about $5.2 billion over 2019-20 to be driven by $3.5 billion from the Global Consumer Services division and $1.4 billion from the Global Commercial Services division

  • American Express has added $5 billion to its total revenues over the last two years.
  • In 2018, the company generated $40 billion of total revenues from its three operating segments.
  • Moreover, the company’s Consumer, Commercial, and Merchant Services divisions contributed 53%, 31%, and 16% of total revenues, respectively.
  • Revenue growth was primarily driven by the growing non-interest income from the Consumer and Commercial services divisions.
  • Interestingly, the non-interest income contributes nearly 94% of the Commercial Services segment.
  • This could largely be due to the higher use of charge cards by institutional customers.
  • Going forward we expect the Global Commercial Services segment to grow at a low single-digit rate to $14 billion by 2020.
  • A description of the products and services offered by each segment is available in our interactive dashboard.

 

Comparing American Express With Its Competitors In The Payment Processing Industry:

  • Closed-Loop: American Express and Discover are closed-loop payment processors. In 2018, payments volume of American Express and Discover were around $1.2 trillion and $376 billion, respectively.
  • Open-Loop: Visa and Mastercard operate an open-loop payments network. In 2018, Visa and Mastercard recorded $8 trillion and $4 trillion of payments volume, respectively.

Our interactive dashboard includes data about trends in revenues for competitors Discover, Visa and Mastercard over the years.

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