“ Our decision to move to a new industry-standard global payment services hub platform has been one of the most

vital steps in transforming our payments

capabilities.” Neha Patel, Vice President of Global Payments Transformation, Amex AMERICAN EXPRESS CASE STUDY American Express—Transforming Global
Customer Remittances with a Payment Services Hub Case Study FINASTRA 2 Owner of one of the world’s most valuable and widely-recognized brands, Amex
has total assets of US$159 billion, annual revenues of US$34 billion and over 112 million cards in use globally. When Amex cardholders make payments to their
accounts, its customer remittances department is responsible for receiving and processing the payment and ensuring the relevant internal systems are updated. This
operation is one of the most important parts of Amex’s business, with direct and immediate impacts on many millions of Amex customers worldwide. The customer
remittances department spans countries where Amex operates as a proprietary business in its own right, rather than under a partnership with another organization.
Amex currently processes over 450 million of these proprietary payments annually, with a total value forecast to pass the US$1 trillion mark this year. In 2012, Amex
launched a strategic global investment program targeted at delivering three key outcomes in customer remittances. First, it wanted to ensure that the business had a
standardized global platform and processes. Second, it aimed to put the customer at the heart of its payments strategy by ensuring customers using its services had
a consistent, compelling and efficient cross-channel experience. And third, it wanted to enhance control and compliance, by driving standardization and automation to
improve end-to-end visibility and its ability to recover from issues. Neha Patel, Vice President of Global Payments Transformation at Amex, explains the background:
“Before the program started, we were experiencing operational and systems issues internally, coupled with an increasingly demanding external environment.
Sometimes the internal issues caused problems for customers—and, more generally, ageing technology was limiting our ability to meet customers’ expectations.”
She adds that the challenges were increased by fragmentation of the company’s payments systems: “From a technology perspective, we had many systems across
our global markets, with a large number of banking partners across our proprietary markets. And many of the applications in our global portfolio were classified as
‘legacy’ applications, meaning we were no longer investing in them.” Alongside these internal issues, the external environment was equally challenging with the
introduction of new industry standards, including the Single Euro Payments Area (SEPA) American Express (Amex) is a global services company that provides
customers with access to products, insights and experiences that enrich lives and build business success. American Express Profile • Global services company •
Total assets: US $159 billion • Annual revenues: US $34 billion • Over 112 million cards issued Amex processes over 450 million proprietary payments annually, with
a total value forecast to pass the US $1 trillion mark this year 3 Case Study FINASTRA and advances in ISO standards. And Amex was facing intensifying
competition from new technologyenabled market entrants—often highly agile and innovative players with a core focus on the customer experience. These technology
and competitive pressures were compounded by ongoing changes in regulation and the expectation from regulators that firms respond quickly. To address these
challenges, Amex decided to launch a multi-year investment program to replatform its customer remittances operation, with the three goals mentioned above, by
boosting global standardization, customer satisfaction, and control and compliance. At the start of the project, Amex thought it would be able to achieve these goals
and expand globally into new markets using existing internal platforms. “As a first step, we started fixing issues and remediating legacy applications, while also
assessing what it would take to have a standardized global platform and processes,” says Patel. “It became apparent fairly quickly that our internal systems would not
stack up to support globalization. So we engaged independent industry consultants to help us examine the global payments ecosystem. That was when we were
introduced to the concept of a ‘payment services hub’ model“. Having decided that this model represented the optimal way forward for its customer remittances
business, Amex set about negotiating with fintech providers, including engagement in extensive procurement activity that included product Those four payment types
are ACH/ direct debit; credit transfers; checks; and debit card payments. Working with its consulting advisers, Amex developed a hybrid roll-out strategy that blends
the two traditional approaches of migrating country by country and payment type by payment type. “Once we’ve built the core foundation on the payment services
hub, then every market thereafter is configurable,” explains Patel. “So we decided to apply a combination of approaches where we phase the migration both by
payment type and simultaneously by market segment.” She continues: “We’ve segmented our 23 markets across the globe and all different payment types into 50
individual deployments by market and by payment type. So, after the full deployment in the U.S., we’ll be bundling the markets and payment types together into
groups where there are synergies available, configuring the code, and releasing it in a staggered, phased way.” A key element of Amex’s approach has been a
commitment to drawing on the lessons from previous payments hub deployments around the world. In 2014 Amex spoke to a number of existing clients supported by
its solution vendor, Finastra. Patel recalls: “A number of the organizations that had already been through the process gave us the same advice: Standardize our
process rather than customize the application. A payment services hub stays pivotal and futureproof if you don’t change the platform, but change your process
instead.” testing through pilots and proof-of-concept exercises within its own payments environment. The tests confirmed that a payment services hub was the best
option. “I’m very proud that the company made this decision,” says Patel. “We needed to raise our game in money movement: this is a critical business function and
we needed to eliminate the risk involved for the organization and for our customers. Looking back over the past few years, our decision to move to a new
industrystandard global payment services hub platform has been one of the most vital steps in transforming our payments capabilities.” The transformation program
is now in its third year. The first year, 2013, was spent largely on addressing immediate issues whilst assessing the broader solution, and it was in the second year
that the focus switched decisively to implementing a global payment services hub. In the third quarter of 2014 Amex signed an agreement to implement Fundtech’s,
now part of Finastra, global payment services hub, Global PAYplus. Fundtech is now part of Finastra, a leading provider of technology solutions to financial
institutions and corporates globally. “Fourteen months on, we have moved into production,” comments Patel. “We have live payments volumes going through the hub.
Over the next nine months we’ll be ramping up to migrate all our U.S. volume into the new system. So we’re starting by moving across the market with the largest
volume and value of transactions while building the foundation on the payment services hub for all four of our payments types.” “ Decommissioning old technology
will reduce costs to the business, while automation of processes will reduce costly waste and manual work.” Neha Patel, Vice President of Global Payments
Transformation, Amex About Finastra Finastra unlocks the potential of people and businesses in fi nance, creating a platform for open innovation. Formed in 2017 by
the combination of Misys and D+H, we provide the broadest portfolio of fi nancial services software in the world today – spanning retail banking, transaction banking,
lending, and treasury and capital markets. Our solutions enable customers to deploy mission critical technology on premises or in the cloud. Our scale and
geographical reach means that we can serve customers effectively, regardless of their size or geographic location – from global fi nancial institutions, to community
banks and credit unions. Through our open, secure and reliable solutions, customers are empowered to accelerate growth, optimize cost, mitigate risk and
continually evolve to meet the changing needs of their customers. 48 of the world’s top 50 banks use Finastra technology. Please visit fi nastra.com Finastra and the
Finastra ‘ribbon’ mark are trademarks of the Finastra group companies. © 2017 Finastra. All rights reserved. North American headquarters 120 Bremner Boulevard
30th Floor Toronto, Ontario M5J 0A8 Canada T: +1 888 850 6656 US 291 / 0917 This isn’t an easy principle – with examples of processes that differ from market to
market and all 600 of its banks sending payments at different frequencies and in different formats. “To remove all this complexity, we needed to change our business
process and banking process, as well as rationalize our banking relationships,” comments Patel. “That way we could keep the payment service hub platform intact
and enable ourselves to keep pace with changes in the external market.” With these core principles in place, Amex identified six factors that it needed to focus on to
deliver a successful migration to the hub. These were: • Apply an organizational roadmap for managing the business through the change, addressing both technology
and process transformation. • Prioritize and sequence each market based on complexity and urgency. • Implement the solution in small chunks to speed up progress
and deliver benefits early to stakeholders. • Ensure clear understanding of the overall value case and benefits of a hub. • Engage with the right technology partner, in
a relationship that will extend far beyond the implementation itself. • Ensure the right resourcing approach, including the optimal balance and combination of
resources from Amex, the vendor and the implementation partner. Armed with its knowledge from previous migrations, Amex has been able to drive the
implementation successfully, at pace and with no disruption to its wider business. “We’ll address standardization of our business processes up front, changing them
to fit the new model rather than the other way round,” says Patel. “We’ve also designed with the end-to-end cycle in mind. The payment services hub is just one step
in a much longer process, all the way from the customer initiating a payment to us updating internal systems and transacting with the bank. We’ve made sure we
have complete visibility of the upstream and downstream processes, and involved these processes in the project at an early stage.” Other priorities have included
delivering value and return on investment quickly and iteratively, and setting up a dedicated team and leadership roles to drive the overall payments transformation
effort. “There’s a dedicated leader on my team who’s responsible for nothing but the payment services hub,” Patel explains. “We also made a conscious decision to
co-locate resources—technology, operations, project management, solution vendor resources— in one place, working together in the same office environment.”
While the migration still has much further to run, Patel says the benefits are already starting to show. “We will see the benefits in three key areas,” she says. “First,
prevention of risk: in particular, being aligned with industry standards reduces our potential regulatory risks. Second, improved quality and control: features like end-
to-end tracking of payments, rigorous controls, and adherence to local standards are incredibly important. The enhanced control means that even if something goes
wrong, we can recover quickly.” Patel continues: “The third benefit is cost savings: the replatforming isn’t primarily a re-engineering effort aimed at cutting costs; by
keeping the customization of the platform to a minimum, it reduces the costs of rolling out the platform internally. And, more importantly, decommissioning old
technology will reduce costs to the business, while automation of processes will reduce costly waste and manual work.” So, all things considered, has Amex made
the right choice in deciding to migrate to a payment services hub model for global customer remittances? Patel has no doubts. “Absolutely,” she says. “And the thing
that reassures me of this on a daily basis is the way the payments industry is changing. Plus, there’s so much more change to come. For example, more countries
are adopting immediate payments infrastructures, including Australia, which will have an impact on our business.” She continues: “Given the pace and scale of
change, it was simply not viable for us to keep evolving and meeting our customers’ needs with our legacy platforms. Now we’ll have greater ability and flexibility to
respond effectively to industry and regulatory changes in the future.”

Case Study: Five Things American Express is Getting Right for the Mass Affluent Market
December 01, 2015 by Samuel Murrant
American Express is a brand well-known for providing high-quality service and generous rewards to wealthy clients, and it has leveraged this image to great effect in
its marketing to reach the mass affluent.
The defining characteristics of the American Express customer base are affinity with the brand and above-average card spending. American Express cardholders
tend to have sought out their cards – and to a far greater extent than holders of Visa, MasterCard or other scheme-branded cards. When asked about the most
important reasons for choosing their credit card, 15.5 percent of American Express cardholders in the U.S. stated that "identifying with the brand" was a major reason
for their decision. By contrast, only 8.5 percent of MasterCard cardholders and 7.3 percent of Visa cardholders stated this.
Here are five things the brand is doing right.
A primary relationship
As both a card issuer and a payment scheme, American Express has control over the features of all payment cards featuring its branding, as well as complete control
over the fees they charge merchants (unlike banks issuing Visa or MasterCard-branded cards, which must abide by the interchange fees set by the card schemes).
This status is both a benefit and a detriment to the company.
Unlike Visa and MasterCard, American Express holds the primary customer relationship on almost all cards bearing its branding, and gets all of the revenue and
customer data available from those cards. On the other hand, it also needs to deal with managing its entire payments ecosystem as well as creating direct customer-
facing products and services. The overall effect of this status is that American Express is a truly end-to-end service provider for its customers, which highlights the
level of service the company provides.
Exclusivity factor
American Express is widely known for its range of premium-branded charge cards, which exist in four tiers beginning at the Green card, which charges an annual fee
of $95 in the U.S., then moving up to Gold (annual fee: $195), followed by Platinum (annual fee: $450), which is the highest tier that can be applied for directly. Above
all of them is the Centurion card, also known as the Black card (annual fee: $2,500, with a $7,500 "initiation fee") – an invitation-only card whose full range of perks
are known only to its holders and American Express itself. The Centurion card is a powerful status symbol, and the fact that little is known about it aside from the
price tag makes aspiring to own one a major draw to the American Express brand for ambitious mass affluent customers.
Outside of the ultra-premium Centurion card though, the tiered system encourages aspiration to the next tier. Each successive level is a greater status symbol than
the last, and offers more generous rewards and higher levels of service.
Social media ties
American Express makes use of multiple channels to keep its customers engaging with the brand, with the aim of making it as easy as possible for cardholders to
communicate their issues directly and have them speedily resolved. It utilizes social media channels, particularly Twitter and Facebook, as part of its customer
engagement strategy, posting new deals and offers to its @AmericanExpress Twitter account and Facebook page.
American Express also uses social media for direct communication with cardholders. Its customer service-related Twitter account, @AskAmex (which is its U.S.-
based customer service handle; it has other accounts for other regions) is used to field questions from cardholders in real time during business hours. Combined with
the brand’s advertised 24/7 customer-service department, this contributes to the impression that the company is not afraid of complaints or difficult requests, and that
there is always someone available to help.
Retention-based loyalty
Focusing solely on financial benefits and rewards encourages price competition and switching (generally a poor way to ensure customers remain loyal in the long
term) but they do make a product attractive to an initial applicant. Due to its higher price point (both on the consumer side and the merchant side) American Express
is capable of offering more to its cardholders than other providers, and the company makes use of generous introductory offers.
However, in combination with its emphasis on customer service and engagement, the American Express rewards are some of the most retention-focused (and
therefore ultimately more valuable to the brand in the long term) in the market. By providing a combination of positive experiences (largely through direct interactions
and customer service) and generous financial rewards, American Express makes its cardholders feel that they are valued and that they are getting good value. This
prevents switching accounts to take advantage of introductory deals.
Partnering with merchants
Partnerships are of critical importance in modern loyalty schemes, and American Express makes heavy use of merchant partnerships to add extra choice (and
therefore value) to its point schemes. One of the most notable recent partnerships American Express has introduced is a deal allowing cardholders to redeem
Membership Reward points (accrued at varying rates on regular spending on American Express cards) directly at Amazon.com. It uses partnerships with big-name
retailers to provide additional convenience and value in its loyalty schemes. By making it possible for cardholders to spend points as they would money, the points
become more valuable to consumers, since they can be spent on exactly what those consumers want to buy.
Know your customers
American Express owes much of its success to a deep understanding of the wants and needs of the mass affluent. It aligns its brand with the values of aspiration,
long-term loyalty, and customer service, and uses all available channels to push that message out.
Case Study: American Express “Do More” Advertising Campaign
American Express had built its reputation as a prestigious charge card. In 1976 the company began its famed ‘‘Do You Know Me?’’ campaign in which celebrities
ranging from dancer Mikhail Baryshnikov to puppeteer Jim Henson appeared in ads that pictured them and an AmEx Green Card bearing their names. In 1987 the
‘‘Portraits’’ campaign followed a similar formula. By aligning the brand with stars, AmEx cultivated the notion that carrying one of its cards was more akin to joining an
elite country club than making a financial transaction. As later ads sniffed, ‘‘membership has its privileges.’’ In the 1980s, however, AmEx’s careful positioning began
to backfire. According to Brandweek, while AmEx ‘‘clung to its old, elite ways,’’ the credit card industry went through monumental changes. With so many cards vying
for consumers’ attention, Visa and MasterCard (specifically, the member banks that comprised the Visa and MasterCard consortia) began to cross-market with
various businesses so they could offer incentives to consumers. For instance, by teaming up with airlines, Visa and MasterCard could entice consumers to charge
purchases with the promise of frequent-flier miles. Moreover, companies such as AT&T and GM allied themselves with the Visa and MasterCard brands and began to
peddle cards that tied in to phone service or car purchases. But while the entire industry became hyper-segmented, AmEx continued to sell itself on its reputation
alone and lost market share as a result. Also damaging was Visa’s 1987 launch of an attack campaign that stressed Visa’s global acceptance by featuring countless
businesses that declined to take American Express. Further limiting AmEx’s appeal was the fact that the company continued to charge its hefty $55 membership fee,
while Visa and MasterCard offered fee-free cards and low interest rates. Taken together these factors weakened AmEx considerably. In fact more than 2 million
AmEx cardholders canceled their memberships in the early 1990s, and the company’s share of the domestic credit card market sank from nearly 20 percent in 1990
to 16 percent in 1995, according to Fortune. In 1995 AmEx began to explore new ways to stanch the flood of cardholders abandoning AmEx and to persuade existing
cardholders to use AmEx more often. After negotiating an agreement with Delta Airlines, AmEx was able to offer a frequent-flier program like those of its rivals. The
company also debuted its Membership Rewards program, which gave consumers points for each AmEx purchase made. These points could then be redeemed for
bonuses such as gift certificates, travel vouchers, or car rentals at an array of participating businesses. AmEx also introduced the Optima card, a revolving credit
account similar to Visa and MasterCard in that consumers could carry a balance on it from month to month rather than having to pay it in full at the close of each
billing period (as the Green Card required). Moreover, AmEx pushed more retailers to accept its cards. This effort was punctuated by the inauguration of the ‘‘Do
More’’ campaign in June 1996. ‘‘This company has had a great history of reinventing itself,’’ Hayes told American Banker. ‘‘This is the next logical step.’’
Target Audience
Because AmEx wanted to use ‘‘Do More’’ ads to gain new cardholders, the company crafted individual ads to appeal to distinct groups, especially those that it had
not targeted in its previous advertising. One of the key approaches AmEx used to broaden its customer base was to employ spokespeople who counteracted the
company’s image as ‘‘a stodgy, premium brand that caters to older customers,’’ according to the Wall Street Journal. In 1997, for instance, AmEx signed Woods, who
had won the Masters Tournament that year. As a 21-year-old phenomenon of mixed race, Woods provided AmEx an opportunity to reach younger consumers as well
as African-American consumers. It was essential to AmEx’s future that it garner younger consumers because they ‘‘tend to stick with the first credit card they use,’’
explained USA Today. Furthermore, Woods was able ‘‘to cross every demographic line . . . and appeal to an audience that makes $250,000 a year as well as an
audience that makes $25,000,’’ an industry analyst told American Banker.
Seinfeld, who pitched the Green Card in spots that aired during such high-profile events as the Super Bowl, was another figure that transcended the traditional AmEx
audience. ‘‘The Seinfeld advertising has attracted a new and younger group to the franchise and has also helped promote everyday usage, which is key,’’ Hayes told
Brandweek. While AmEx was typically associated with the travel and leisure retail sector, the company wanted to increase the routine purchases consumers charged
each month to their AmEx cards. Instead of presenting Seinfeld in the same sort of glamorous settings that permeated ‘‘Portraits’’ or ‘‘Do You Know Me?’’ AmEx
showed Seinfeld wielding his Green Card at grocery stores and gas stations. One commercial paired Seinfeld with the animated figure of Superman and portrayed
Seinfeld (rather than the caped hero) rescuing Lois Lane at a grocery store by pulling out his AmEx card. (She had forgotten her wallet; Superman’s costume had no
pockets; Seinfeld paid for the food.)
Similarly, in the 1998 series of spots for AmEx’s Small Business Services division, the company focused on African-American, Latino, and female entrepreneurs. ‘‘We
have represented the three groups who represent the strongest growth in new business starts,’’ an AmEx spokesperson told Brandweek. In the 1998 ads that did
present wealthy and prominent businesspeople, AmEx chose the likes of Jake Burton, a snowboarding pioneer, and Earvin ‘‘Magic’’ Johnson, a basketball hall-of-
famer who had been diagnosed with HIV, both of whom Hayes classified as ‘‘people who have challenged the status quo and appreciated the service we give . . .
[They are] not just those that fit the traditional view of success.’’ Despite AmEx’s desire to broaden its consumer base, it was careful not to ‘‘move downscale,’’ as
Hayes described it in Brandweek. The company had considerable brand equity rooted in AmEx’s reputation for superior service, and it did not want to alienate its
core group of affluent card users. ‘‘Creating the balance where the brand becomes accessible, yet . . . remains special at the same time, is a real challenge,’’ Hayes
said. AmEx relied on its spokespeople’s ability to walk this tightrope. Though Woods was young, he was nevertheless a golfer, a player of a sport popular among
businessmen. Moreover, Woods was not a rebellious upstart. Though barely out of his teens, he was one of the best golfers in the world. Similarly, Seinfeld’s hit
sitcom was watched by a huge audience. Popular with many viewers, Seinfeld was not exclusively a Generation X hero, and the commercials featuring him also
appealed to AmEx’s older cardholders as well.
Competition
Industry leader Visa had persisted in its attacks on AmEx since the 1985 launch of its ‘‘It’s Everywhere You Want to Be’’ campaign. Although Visa’s share of the
domestic credit-card market fell to 48.8 percent from 49.2 percent in 1996, it continued to portray businesses, restaurants, and entertainment providers that would not
accept AmEx as a way to stress the universality of its own cards. Like AmEx, Visa also addressed specific new markets in its 1998 efforts. Under the umbrella of the
‘‘Everywhere’’ theme, Visa targeted Generation X consumers in ‘‘The Attic,’’ a commercial featuring a trendy used-clothing store. In ‘‘eToys,’’ a television spot for an
online merchant, Visa linked itself to the growing e-commerce sector by presenting itself as the credit card of choice for Internet purchases. With a commercial
highlighting Jack Nicklaus’s golf school (which only took Visa), Visa tried to reach more affluent cardholders. A cornerstone of Visa’s marketing strategy was its
sponsorship of sporting events. In addition to being the official sponsor of the National Football League (NFL), horse racing’s Triple Crown races (the Kentucky
Derby, the Belmont Stakes, and the Preakness), and NASCAR auto racing, Visa had been an Olympic Games sponsor since 1986. Visa used the 1998 Winter
Olympic Games as a platform to reinforce its message of global acceptance. As a Visa executive explained in the January 30, 1998, edition of American Banker,
‘‘nothing was better for a brand’’ than associating itself with the Olympics. Like American Express, Visa also endeavored to expand its empire—and its name
recognition—beyond credit cards. In 1998 Visa continued to promote its debit card, the Visa CheckCard, with big-budget advertisements depicting celebrities being
hassled for identification when writing a check. Visa touted its small-business cards as well. According to the October 5, 1998, issue of Advertising Age, Visa’s long-
term goal was to leverage ‘‘its brand equity into different kinds of payment.’’ MasterCard, too, vied to be consumers’ card of choice. Breaking free from a long period
of mediocre advertising and negligible growth, in 1997 the company debuted ‘‘Priceless,’’ which ‘‘became one of the industry’s most admired campaigns, creating an
almost nonstop buzz . . . [and] raising consumer awareness and consumer usage of the card,’’ Adweek raved. Using the tagline ‘‘There Are Some Things Money
Can’t Buy. For Everything Else There’s MasterCard,’’ MasterCard’s agency, McCann-Erickson, made an emotional appeal to its viewers. These print and television
advertisements showed scenes of various activities, such as a father and child at a baseball game and an older couple celebrating a wedding anniversary. The voice-
over announced the cost of various aspects of these endeavors, and the commercials all culminated in a ‘‘priceless’’ moment (such as ‘‘real conversation with 11-
year-old son’’ at the end of the baseball spot), followed by the campaign’s tagline. Buoyed by ‘‘Priceless,’’ MasterCard’s purchase volume rose 16 percent from 1997
to 1998 and its market share remained steady, increasing slightly to 27.8 percent from 27.6 percent, according to Credit Card News.
Advertising Strategy
Because the primary goal of ‘‘Do More’’ was to establish the brand’s relevance to diverse consumers, AmEx used a targeted strategy to pair specific messages with
specific groups. For instance, the print executions portraying small-business entrepreneurs ran almost entirely in publications such as Success, Entrepreneur, and
Forbes. The initial Tiger Woods ads touting American Express Financial Advisors favored major newspapers (especially the Wall Street Journal, the New York Times,
and USA Today) and newsweeklies (including Time and Newsweek) over lifestyle publications. AmEx chose to air the Seinfeld commercials on mainstream, high-
profile television programming because the company hoped the comedian could connect a mass audience of credit-card users to the Green Card. ‘‘Superman’’ first
appeared during NFL playoff games, which reached viewers across demographic lines.
The message of ‘‘Do More’’ was that AmEx—not Visa or MasterCard—could improve one’s ventures and that AmEx was a global solution always available to make
things better (or easier). Part of the way AmEx delivered this message was by making its ads attention-getters. The spokespeople chosen to represent the various
facets of the brand were not only well known but also had a certain renegade charm. Certainly Johnson was one of the greatest basketball players of all time, and his
excellence was intended to mirror AmEx’s reputation for service and prestige. But Johnson had also shocked the nation when he announced he was HIV-positive.
Pundits had decried him, and some fellow basketball players even shunned him. Using him in the AmEx spots was a daring choice and attracted much notice.
Similarly, the ‘‘Superman’’ spot was designed ‘‘to break through commercial clutter,’’ Hayes said. Instead of banking on Seinfeld’s celebrity, AmEx created a
commercial that juxtaposed him with a comic book character and spoofed the notion of any credit card (or personality) being able to ‘‘save the day.’’ As he took his
AmEx card out of his pocket, Seinfeld spun around in a blur. An onlooker asked, ‘‘What’s with the spinning?’’ ‘‘He idolizes me,’’ Superman wryly explained. ‘‘It’s
embarrassing.’’ Again, the notion was to twist the genre slightly, to prompt viewers to sit up and take note that American Express was not quite what everyone
assumed it to be. In 1999 AmEx extended its association with Seinfeld. One noteworthy spot showed the comedian embarking on a cross-country road trip after
observing that he needed to ‘‘get some kind of real life.’’ In keeping with his persona, his adventures were simultaneously largescale and trivial: among other
activities, he saw Mount Rushmore, held a cup of coffee that was too hot, had a conversation with an attractive blond woman, and visited the Saint Louis Arch.
American Express updated the ‘‘Do More’’ concept in 2000, adapting the tagline to a subcampaign dubbed ‘‘Moments of Truth,’’ the first phase of which consisted of
five TV spotsfeaturing ordinary people. Each of these commercials focused on the fact that AmEx offered ‘‘more’’ services than its competitors. For instance,
American Express’s travel-assistance benefits were touted in one spot that showed a woman waiting fruitlessly at an airport baggage claim. Another spot
emphasized American Express’s partnership with the bulk-sales supermarket Costco; yet another focused on the company’s online-banking offerings via the
juxtaposition of a ‘‘wired’’ young woman with her ‘‘analog’’ father, who was paying bills by hand. The tagline’s flexibility was further demonstrated by that year’s
highest-profile and most imaginative spot, which featured Tiger Woods playing an outsized game of golf on the streets of Manhattan. Woods was shown swatting a
ball over the Empire State Building and then from Central Park all the way downtown to Wall Street, before sinking a putt in a paper cup positioned on the Brooklyn
Bridge. In this case ‘‘do more’’ was intended as a suggestion that American Express could help cardholders realize their most ambitious hopes.
American Express Company’s ‘‘Do More’’ campaign truly was a global one, running in 23 different countries simultaneously. Although the same basic ads were used
everywhere, the ad agency Ogilvy & Mather changed small details when appropriate. ‘‘We’ve created an overall platform for positioning,’’ John Hayes, the company’s
head of global advertising, told Advertising Age. ‘‘We make modifications and customizations everywhere to make sure what we do is right.’’ Golfer Tiger Woods
proved an especially valuable global representative—particularly in Japan, where golf was a passion among a large percentage of the population.
Campaign Outcome
When AmEx inaugurated ‘‘Do More’’ in 1996, critics predicted that the company would lose its ability to differentiate itself by shedding some of its snobbish image.
Ogilvy and AmEx quickly seemed to prove the skeptics wrong, however: the company’s 1996 purchase volume rose 15.6 percent, and ‘‘after years of decline,’’ its
1997 share of the domestic credit-card market climbed to 17 percent from 16.4 percent, according to Advertising Age. AmEx posted global market share declines in
1998 and 1999, but this was partly a result of the Visa and MasterCard emphasis on debit cards, a product AmEx did not offer. AmEx countered with its most
successful product launch in recent memory, the Blue Card, aimed at college-age consumers and other young adults. The ranks of Blue Card holders steadily
increased in 2000 and 2001, and AmEx unveiled a Blue Card designed for small-business owners. Although the Blue Card’s marketing did not fall under the ‘‘Do
More’’ umbrella, it did build on the strategy of democratizing the traditionally upscale AmEx brand image, an approach whose merits were no longer questioned at the
beginning of the new century. This change in perception was perhaps a measure of the success of the brand re-positioning accomplished through the ‘‘Do More’’
campaign.
The Seinfeld and other ‘‘Do More’’ spots aired through 2001, but AmEx, like many advertisers, struggled to find appropriate ways to promote itself in the somber
months after the terrorist attacks of September 11, 2001. AmEx’s post-9/11 difficulties were compounded by the fact that the company’s headquarters were located at
the World Financial Center, adjacent to the Twin Towers, which had collapsed. In early 2002 the ‘‘Do More’’ tagline was dropped in favor of ‘‘Make Life Rewarding.’’
Both Seinfeld and Woods continued to be involved with the American Express brand.
…
Brand Erosion.
Brands are subject to an array of risks, some predictable and some not, that can sharply reduce their value. In some cases, the risk can appear overnight and
threaten the brand with outright collapse. When some of Perrier’s bottled water was found to be contaminated, the company experienced a rapid and significant drop
in market share. And when some Firestone tires were deemed defective, parent company Bridgestone suffered an 80% drop in net income over one year. In other
cases, the relevance and attractiveness of a brand may erode because of underinvestment or misdirected investment. Think of the gradual decline of GM’s Saturn
brand when, after a successful launch, the company failed to develop new models fast enough to satisfy customers.
One of the most effective countermeasures to brand erosion is redefining the scope of brand investment beyond marketing, taking into account other factors that
affect a brand, such as service and product quality. Another effective countermeasure involves the continuous reallocation of brand investment based on early signs
of weakness identified through constant measurement of the key dimensions of the brand.
That is how American Express averted the risk of brand erosion over the past decade. A pioneer in the charge card industry, Amex came under competitive attack in
the late 1980s from Visa and several major banks, which began to take market share from Amex worldwide by challenging consumer perceptions of the Amex brand.
Visa, in its advertising, emphasized merchants’ wider acceptance of its card (“…and they don’t take American Express”), while the banks emphasized incentive
programs that rewarded frequent usage. Amex’s brand, built on prestige and service, was becoming too narrowly focused and less relevant in customers’ eyes.
So Amex made a series of investments, some of them unrelated to conventional marketing, to strengthen and broaden the brand. To increase the number of service
establishments accepting its cards, Amex invested in its relationships with merchants—reducing their transaction fees, speeding up payments, and increasing
support for their advertising. The cut in transaction fees alone reduced Amex’s revenues by about $170 million annually, but higher charge volumes more than made
up for the loss. Amex also invested heavily in its Membership Miles rewards program, paying more to participating airlines and expanding the program to include five
major hotel chains. This reallocation of investments arrested the brand’s slide early and contributed to the company’s dramatic growth in market value over the past
decade.
One-of-a-Kind Competitor.
A company’s competitors, existing and potential, clearly are one of the main sources of business risk, whether the threat stems from a rival’s new product or the
emergence of global competitors with lower cost structures. Perhaps the most serious competitive risk, though, is that a one-of-a-kind competitor will appear and
seize the lion’s share of value in a market. It is vitally important to constantly scan the horizon to identify and track as early as possible the companies that, whether in
your industry or not, could become such a rival. When you’ve identified one, the best response is a rapid change in business design that minimizes your strategic
overlap with the unique competitor and allows you to establish a profitable position in an adjacent economic space.
Any retailer tracking the proliferation of Wal-Mart stores on a map of the United States during the 1980s and 1990s would have been able to predict precisely when
this retailing tidal wave, driven by Wal-Mart’s unique business model, would wash through its home territory. Many major retail chains failed to do so. A handful,
however, did respond in time, maintaining and growing their value by shifting their business designs to capture their own distinct slices of the market. Discount retailer
Target, in the early 1990s, identified the need to offer a unique product selection to compete with Wal-Mart’s. In response, it recrafted itself from a conventional
discounter to a low-price but style-conscious retailer that appeals to a different customer set than Wal-Mart’s. By contrast, Family Dollar stores have driven steady
growth by targeting low- and fixed-income households, offering basic household items, food, and apparel in small, bare-bones stores throughout neighborhoods that
are too down-market, too rural, or too urban for Wal-Mart.
Customer Priority Shift.
Many strategic risks involve customers—a shift in the balance of power toward them and away from companies, for example, or companies’ overreliance on a small
number of customers. But perhaps the biggest risk is the shift—suddenly and dramatically or gradually and almost invisibly—in customers’ preferences. Such shifts
happen all the time; the magnitude of the risk depends on its speed, breadth, and depth.
Two powerful countermeasures for managing this risk are the continuous creation and analysis of proprietary information, which can detect the next phase of
customer priorities, and fast and cheap experimentation, which helps managers to quickly home in on the right product variations to offer different customer
microsegments. These methods can help companies retain and grow their customer bases—even as customers’ preferences evolve—and, over time, increase
revenue per customer and overall profitability.
One company that has rapidly become proficient in these methods is Coach, which makes high-quality leather goods. When Coach was spun off from Sara Lee in
2000, it trailed competitors Gucci and LVMH in revenue, profitability, and market capitalization. This was also a period of unanticipated growth and change at the
sector’s middle-market level, where purses, handbags, and briefcases sell, at retail, in the $200 to $400 range. Known for its conservative styling, Coach faced a
high-risk situation as it tried to discern how long its existing customers would stick with the company if it ventured down the more trendy fashion paths that would
allow it to expand its customer base. In the past four years, Coach has managed this risk well enough to surpass Gucci in revenue growth rate, profit margin, and
market capitalization.
Some of this success can be attributed to Coach’s aggressive in-market testing of new products—customer interviews (more than 10,000 a year), in-store product
tests, and market experiments that record the effect of changing such variables as price, features, and offers by competing brands. Based on the proprietary
information it gathers, Coach quickly alters product designs, drops items that test poorly, creates new lines in a wider range of fabrics and colors, changes prices, and
tailors merchandise presentations to fit customer demographics at specific stores. Several years ago, Coach had customers preview its Hampton satchel and learned
that they would willingly pay $30 more than the company had thought. In the case of another bag, Coach solicited customer feedback on the design and, learning that
customers found it “tippy,” responded by widening the base of the bag. As a result of such close and continuous customer contact, Coach has avoided numerous
market misfires and has been able to maintain its popularity among its traditional fans while simultaneously attracting a new, younger generation of customers.
Although 10,000 individual customer interviews and the several million dollars a year that Coach spends on in-market testing may seem excessive, the investment of
time and money represents a low-cost form of insurance against getting blindsided by customers’ shifting priorities. And Coach isn’t alone in its generation and smart
use of proprietary customer data. A number of companies have developed information systems that keep them plugged in to the microsegments and constant
microshifts of their customers. Those firms include Capital One, which conducts 65,000 in-market experiments per year to identify ever smaller customer segments in
the credit card market, and Japanese video and music distributor Tsutaya, which analyzes customer spending patterns through point-of-sale data, surveys, and
databases.
From early 1980s until the early 1990s, American Express was known for cutting its interchange fee (also known as a "discount rate") to merchants and restaurants if
they accepted only American Express and no other credit or charge cards. This prompted competitors such as Visa and Mastercard to cry foul for a while as the
tactics "locked" restaurants into American Express. Capitalizing on this elitist image, American Express frequently mentioned such exclusive partnerships in its
advertising.[23]
Aside from some holdouts including Neiman Marcus (which continued exclusivity until 2011), the practice largely ended in 1991. A group of restaurants
in Boston stopped accepting American Express while accepting and encouraging the use of Visa and Mastercard, including some that were exclusive to American
Express. The rationale was due to far lower fees as compared to American Express' fees at the time (which were about 4% for each transaction versus around 1.2%
at the time for Visa and Mastercard). The revolt, known as the "Boston Fee Party" (alluding to the Boston Tea Party), spread to over 250 restaurants across the
United States, including restaurants in other cities such as New York City, Chicago, andLos Angeles. Visa offered to pay the Fee Party's legal bills, and Discover
Card was able to increase their acceptance among Boston restaurants by 375%. Kenneth Chenault, then head of Travel Related Services prior to becoming
American Express CEO, cut fees to bring these restaurants back into the fold.[24] American Express then shifted its focus from exclusivity to broadening acceptance,
adding mainstream merchants like Walmart to the American Express network.

Card products[edit]
As of 31 December 2017, the company had 112.8 million cards in force, including 50 million cards in force in the United States, each with an average annual
spending of $18,519.[3] These include consumer, small business and corporate cards issued by American Express themselves and cards issued by its Global Service
Network partners that run on its network (such as Commonwealth Bank, Westpac and NAB in Australia and Lloyds Bank and Barclays Bank in the UK). On 1 March
2017, Australia's fourth largest bank ANZ announced that it was no longer issuing American Express cards, with the support phased out entirely by August 5,
2017.[37]
American Express is the largest card issuer in the world based on purchase volume.[38] It is the 4th largest card network in the world, based on the number of cards it
has in circulation.[39]
American Express is one of the partner banks to both Google and Apple's mobile wallet systems (Google Pay and Apple Pay, respectively) meaning that cardholders
can use their American Express-issued cards to pay at establishments whereNFC payments are accepted.
Consumer cards[edit]
An advertisement for the American Express Platinum Credit Card in Hong Kong
See also: Centurion Card and Accolades Card
American Express is best known for its iconic Green, Gold, and Platinum charge cards.
In 1958, American Express issued its first charge card, which required payment at the end of every month.[40] In 1966, the company issued its first gold card, in an
effort to cater to the upper echelon of business travel.[41] Its platinum card debuted in 1984.[42]
In 1999, American Express introduced the Centurion Card, often referred to as the "black card," which caters to an even more affluent and elite customer segment.
The card was initially available only to select users of the Platinum card. The annual fee for the card in the United States is $2,500 (up from $1,000 at introduction)
with an additional one-time initiation fee of $7,500. American Express created the card line amid rumors and urban legends in the 1980s that it produced an ultra-
exclusive black card for elite users who could purchase anything with it.[43]
American Express cards issued in the United States range in cost between no annual fee (for Blue and many other consumer and business cards) and a $550 annual
fee (for the Platinum card). Annual fees for the Green card start at $95 (first year free), while Gold card annual fees start at $195.
American Express has several co-branded credit cards, with most falling into one of three categories:
Airlines: Aerolineas Argentinas, Air Canada, Air France, Alitalia, British Airways, Cathay Pacific, Delta Air Lines,Icelandair, KLM, Qantas, Scandinavian
Airlines, Singapore Airlines, SriLankan Airlines, Virgin Atlantic, Virgin Australia, among others.
Hotels: Best Western, Hilton Hotels. Starwood Hotels & Resorts Worldwide
Retailers: David Jones, Holt Renfrew, Harrods, Macy's, Bloomingdales, Lowe's, Mercedes Benz, and others.
A credit card aimed at young adults is called Blue, which has no annual fee and a loyalty program. A television media campaign for Blue adopted the 1979
UK Synthpop hit "Cars" by Gary Numan as its theme music. A cashback reward program version, "Blue Cash", quickly followed. Amex also targeted young adults
with City Reward Cards that earn INSIDE Rewards points to eat, drink, and play at New York, Chicago and LA hot spots. American Express began phasing out the
INSIDE cards in mid-2008, with no new applications being taken as of July 2008.
In 2005, American Express introduced Clear, advertised as the first credit card with no fees of any kind. Other cards introduced in 2005 included "The Knot" and "The
Nest" Credit Cards from American Express, co-branded cards developed with the wedding planning website theknot.com.
In 2006, the UK division of American Express joined the Product Red coalition and issued a Red Card, donating with each purchase through The Global Fund to
Fight AIDS, Tuberculosis and Malaria to help African women and children suffering from HIV/AIDS, malaria, and other diseases.[44]
In 2009, American Express introduced the ZYNC charge card. White in color, this card was created for people aged 20–40.[45] American Express is no longer taking
applications for the ZYNC charge card.
In late 2012, American Express and Walmart announced the launch of Bluebird, a prepaid debit card similar to that of Green Dot.[46] Bluebird is being touted as
having some of the benefits of traditional American Express cards, such as roadside assistance and identity theft protection. The card can also be used as a
substitute to a traditional checking account. Unlike other such cards, Bluebird is FDIC-insured.[47] Bluebird accounts have standard FDIC deposit insurance and check
writing capabilities, and customers can now have Social Security payments, military pay, Tax Return, paycheck and other government benefits deposited directly into
their accounts.
Card acceptance outside the United States[edit]
American Express credit cards are noted by travel guides, including Rough Guides and Lonely Planet, as being less commonly accepted in Europe than Visa or
Mastercard.[48][49][50][51] In an interview with an American Express spokesman in 2010 about card acceptance in the UK, the Daily Mail's financial website, This is
Money, noted that "The list of places that are taking Amex appears to be growing, rather than slowing, but it seems to be a little hit-and-miss. It's not a good feeling to
enter a shop, not knowing whether or not they accept the card."[52]
Card design[edit]
The company logo, a gladiator or centurion, appears at the center of the iconic Zync, Cobalt, Green, Gold, Platinum, and Centurion cards. The figure and his pose
evoke classical antiquity. These cards also feature intricate border and background designs that read "American Express." The designs on these cards, especially
the Green card, bear resemblance to those on United States Federal Reserve Notes.
ExpressPay[edit]
In 2005, American Express introduced ExpressPay, similar to Mastercard PayPass and Visa payWave, all of which use the symbol appearing on the right. It is a
contactless payment system based on wireless RFID, where transactions are completed by holding the credit card near a receiver at which point the debt is
immediately added to the account. All three contactless systems use the same logo. The card is not swiped or inserted into a smart card reader and no PIN is
entered.
Many merchants, in the U.S. and globally, now offer American Express contactless payment, including Meijer, Walgreens, Best Buy, Chevron
Corporation, Starbucks, and McDonald's.
American Express OPEN[edit]
Further information: American Express Plum Card
American Express OPEN, the small-business branch of American Express, offers various types of charge cards for small businesses to manage their expenses.
In late 2007, the company announced the new Plum Card as the latest addition to their card line for small businessowners.[53] The card provides a 1.5% early pay
discount or up to two months to defer payment on purchases. The 1.5% discount is available for billing periods where the cardmember spends at least $5,000. The
first 10,000 cards were issued to members on December 16, 2007.[54]
In 2008, American Express closed all Business Line of Credit accounts. This decision was reached in tandem with the Federal Reserve's approval of American
Express's request to become a commercial bank.[55]
As of July 2016, American Express has several credit cards designed for small business. These include SimplyCash® Plus Business Credit Card. Cash back earned
is automatically credited to the cardholder's statement and other benefits are included. Other cards include the Business Platinum Card from American Express
OPEN, the Business Gold Rewards Card from American Express OPEN, the Blue for Business Credit Card from American Express, Business Green Rewards Card
from American Express OPEN, the Business Green Rewards Card from American Express OPEN and the Plum Card from American Express OPEN. These cards
have return protection, year-end summaries and other tools to help with the business accounting and control.[56]
Commercial cards and services[edit]
In 2008, American Express acquired the Corporate Payment Services business of GE, which primarily focused on providing Purchasing Card solutions for large
global clients.[57] As part of the $1b+ transaction, American Express also added a new product, called V-Payment, to its product portfolio. V-Payment is unique in that
it enables a tightly controlled, single-use card number for increased control.
As of July 2016, American Express offered several business, corporate and travel credit and charge cards and services and data and information services related to
their use in the competitive markets for these cards.[58]
The online “American Express @ Work” function gives corporations a site on which to apply for, cancel or suspend cards, monitor policy compliance and track
expenses. The cardholder company can create and generate reports for a corporate expense account program, including analytics and data consolidation or
integration.[59] Reports can be tailored for various sized companies. Through a Standard Expense Reporting feature in its "Manage Your Card Account site",
American Express corporate cards provide cardholders access to pre-populated expense reports. The cardholder needs to annotate expenses and add out-of-pocket
charges upon completion of which the report can be downloaded in electronic or paper format.[59]
American Express Corporate Card program can be used with a third-party on-demand expense management tool by Concur, a provider of integrated travel and
expense management services. This tool simplifies the creation of expense account reports and the corporate approval process. Corporate card activity, including
viewing statements, making payments, setting up alerts and making inquiries and disputing charges, can be managed through an account online or via mobile device
through this service.[59]
The corporate cards have benefits including discounts and rebates for travel and transportation, travel and emergency help, travel insurance and baggage
protection.[59] Upgrades from the Corporate "Green" Card to the Corporate Gold Card or Corporate Platinum Card, although subject to fees and terms and conditions,
have several additional benefits at each card level, such as free breakfast or late checkout at many hotels. [59] The American Express/Business Extra Corporate Credit
Card is affiliated with American Airlines and provides a 4% rebate on eligible American Airlines travel purchased with the card.[59]
American Express has a specialized corporate meeting credit card.[60] Another specialized American Express business card is the American Express Corporate
Purchasing Card, which can be assigned to individual employees or departments. Reconciliation and accounting services are available to make these functions
easier for the corporation.[61]
Non-proprietary cards[edit]
In December 2000, American Express agreed to acquire the US$226 million credit card portfolio of Bank of Hawaii, then a division of Pacific Century Financial
Corp.[62] In January 2006, American Express sold its Bank of Hawaii card portfolio toBank of America (MBNA). Bank of America will issue Visa and American Express
cards under the Bank of Hawaii name.
Until 2004, Visa and Mastercard rules prohibited issuers of their cards from issuing American Express cards in the United States. This meant, as a practical matter,
that U.S. banks could not issue American Express cards. These rules were struck-down as a result of antitrust litigation brought by the U.S. Department of Justice,
and are no longer in effect.[63] In January 2004, American Express reached a deal to have its cards issued by a U.S. bank, MBNA America.[64] Initially decried by
Mastercard executives as nothing but an "experiment", these cards were released in October 2004. [65] Some said that the relationship was going to be threatened by
MBNA's merger with Bank of America, a major Visa issuer and original developer of Visa (and its predecessor, BankAmericard). However, an agreement was
reached between American Express and Bank of America on December 21, 2005.[66] Under the terms of the agreement, Bank of America will own the customer loans
and American Express will process the transactions. Also, American Express will dismiss Bank of America from its antitrust litigation against Visa, Mastercard, and a
number of U.S. banks. Finally, both Bank of America and American Express also said an existing card-issuing partnership between MBNA and American Express will
continue after the Bank of America-MBNA merger. The first card from the partnership, the no-annual-fee Bank of America Rewards American Express card, was
released on June 30, 2006.
Since then, Citibank, Wells Fargo, First National Bank of Omaha, USAA, Synchrony Financial, and US Bancorp have started issuing American Express cards. Citi
issues the Macy's and Bloomingdale's American Express cards along with Citi-branded cards. Wells Fargo issues American Express cards under their own brand
and for Dillard's. US Bancorp issues American Express-branded cards for US Bank along with Elan Card Services, a subsidiary that issues credit cards on behalf of
small to midsize banks. Some credit unions, including PenFed, also issue American Express cards. JPMorgan Chase is the largest bank and the only Big Four
bank in the US that does not partner with American Express. Instead, JPMorgan made the decision in 2013 to partner with Visa on the ChaseNet closed-loop
network that is similar in terms of functionality to the American Express network.
American Express Case Study

SITUATION ANALYSIS

Analysis of the Firm

American Express (NYSE:AXP) is one of the world's leading providers of premium travel-related services and payment processing system support services globally.
American Express (Amex) has grown steadily through a series of mergers, acquisitions and later divestures to focus entirely on their premium card and payment
processes services (Taube, Gargeya, 2007). AMEX concentrates today on a series of financial products and services to individuals, small businesses, and large
corporations including the Fortune 500, and higher education institutions globally. The company operates on a global scale, yet the majority of its revenue is
generated in the U.S. For an analysis of American Express Revenues and Earnings before Interest and Taxes, see Table 1: American Express Geographic Analysis.
In an effort to bolster foreign revenue, Amex reorganized to have operating segments re-aligned to a global consumer and global business-to-business structure
(Taube, Gargeya, 2007). The company also completed this re-organization for corporate accounts and ancillary businesses as well. As part of the re-organization,
Amex placed its U.S. Card Services unit (USCS) and it's International Card Services (ICS) within the global consumer group with the intent of creating a more
uniformly focused culture on customer service and recovery in this sector (Giglio, Michalcova Yates, 2007). Of all services divisions of the company, USCS is the
most well-known as it concentrates on the issuance of cards to consumers and the offering of services to small businesses in the U.S. through 2007, and since the
reorganization, globally (Taube, Gargeya, 2007). As part of the re-organization the company has also integrated in its Travel Related Services (TRS) unit with its U.S.
banking subsidiaries to include the icon of their brand, their consumer charge cards. From the classic green American Express personal card, to the American
Express Gold, Platinum and Centurion Card, to the revolving cards including Blue with is the processor of Optima, this division manages consumer accounts. What is
remarkable is that the average spending $8,360 per Amex card is four times that of competitor Visa's average spending of $2,470 per card and MasterCard's $1,960
per card as well. This point made in the case quantifies how powerful the Amex brand is within the upper income segments of the American credit card market, and
also shows significant potential for global growth with affluent consumers. To continually pursue global growth the company contracted in 2007 with Harrods to offer a
customized American Express card for that store as well (Taube, Gargeya, 2007). Amex realized that in addition to these customized cards, the need to increase the
number of redemption services was also critical, and as a result they added 1,400 redemption partners globally since the reorganization (Taube, Gargeya, 2007).
This network is comprised of 80 different partners in each country with only a fourth of them in the travel industry (McClellan, 2007). One of the strategic objectives as
defined in the case study and apparent from subsequent research is the development of the Global Commercial Services (GCS) and Global Network and Merchant
Services (GNMS) divisions so they would be more aligned with the needs of business-to-business (b2B) clients globally (Taube, Gargeya, 2007). The GCS is
specifically focused on transition-based services, and has been one of the key factors that is responsible for the increasing Revenue Per Employee as shown in
Table 2: American Express Company Ratio Analysis. Globalization efforts for American Express have been constrained by the lack of marketing effectiveness
(McClellan, 2007) in specific regions of the world and the scalability of the Global Network and Merchant Services (GNMS) which has been constrained in its
profitability by the current financial crisis and the dollar's lack of strength as a global currency.

Marketing Strategy

The case study provides a progression of the marketing strategy for Amex from its founding in 1957 through present day, with the maturation from the predominantly
male business traveler, to affluent women, and also families. The shift in messaging to leisure travel and experiences in the 1987-2002 timeframe was the beginning
of the company's move to more lifestyle messaging over their heavily aspirational approach of using the "Do You Know Me?" campaign during the 1975-1987
timeframe. The progression through "Make Life Rewarding" to My Life, My Card messaging that concentrated on rewards and incentives to stay loyal to the Amex
brand were the primary marketing strategy through the years of 1996-2007. In the midst of the global re-organization (Taube, Gargeya, 2007) the company moved to
celebrity endorsements. The decision to rely on Tiger Woods had been proven in previous endorsement efforts the golf legend has been involved in (Farrell, Karels,
Monfort, McClatchey, 2000) and therefore the risk was seen as minimal. With the strategy of using "Are You Are a Card member?" The company embraced the
concept of how unique each card member is and how their lifestyles exemplify the branding concepts of Access, Advocacy, Accountability and Affiliation - all critical
components of the company's messaging and membership messaging platform. As the marketing strategy has progressed, it has however lacked the necessary
aspects of a marketing campaign for fuel aspirational use. The typical Amex card hold spends $8,360 per year on average, a spending rate that only 5% or less of
the most affluent Americans can sustain. In fact the marketing strategy is a paradox both today and in the timeframes of the case study. There is on the one hand the
need to gain greater loyalty from their existing customer base yet also expand the total available market by providing card services to income levels below their target
market. This also represents a challenge for the company in terms of taking on relative levels of risk as well. To move further down the income scale, Amex would
have to take on greater financial risk of default given their cards being predominately honored by merchants who can afford their fees. Amex has a strong brand at
the higher end of the market yet also is almost blocked from going down-market given the fact that 70% of their revenue is generated from retailer and establishment
fees. In this sense, Amex is trapped from moving down the income levels both due to risk and the constraints it places on retailers to pay higher fees to accept its
card relative to competitors VISA and MasterCard. The Optima experience the company had also highlights the risk of opening up the Amex network of retailers and
establishments to income levels of customers who do not pay their entire balances off completely very month, which is a core assumption of the company today.

The marketing strategy has continued, in spite of these major limitations, to concentrate on celebrity endorsements, the use of integrated marketing communications
(IMC) strategies (Hosford, 2009) and the increasing use of the Internet for capturing new accounts and serving existing ones. What has been missing however is a
universal theme that foreign consumers can relate to and identify with. Amex continues to struggle globally from a marketing standpoint both within the case study
and today (McClellan, 2007) due to the inability to attract profitable customers for life.

As the financial analysis shows in Table 2, the company is actively serving many customers, yet not achieving profitable growth. This is because the marketing
strategies excel at attracting aspirational members, yet does not do enough to, even with data mining as mentioned in the case, to find long-term, profitable
customers.

Organizational Goals

The organizational goals of Amex center first and foremost on selecting key investments that will allow for long-term revenue and profit growth, without sacrificing the
gains made in emerging global businesses. This is apparent in the approach Amex is taking in terms of its globalization strategy (Taube, Gargeya, 2007) and its
approach to trimming back acquisitions earlier in the 20th century as the case study suggests. Second, Amex is focused on the business process management
(BPM) and process re-engineering in an attempt to ensure all of its divisions perform together in unison. This is evident from the discussion in the case study with
regard to the re-organization of 2007 and the integration of services into divisions that allowed for greater sales internationally. A third organizational goal is to nurture
customer loyalty over time, fostering this through lessons learned from data mining and customer research. Taken together, Amex is striving to find new avenues of
profitable growth while at the same time nurturing and growing lifetime customer value.

Marketing Mix

The product, price, promotion and distribution or place, or marketing mix analysis of Amex exemplifies an organization that has tested alternative services to its core
business, yet has found that its unique value proposition is in providing credit card and travel-related services for affluent individuals, small businesses and larger
corporations and institutions worldwide. These services include credit card processing, customized credit card programs for merchants and banks, and payment
processing services globally. Across the spectrum of services the company provides, the pricing models concentrate on higher-end, value-added service offerings
capable of supporting their higher gross margin-based business model.…[END OF PREVIEW]
The history of American Express
How AmEx rose to prominence as a credit card issuer
By Ben Woolsey | Published: November 15, 2005
More than a century and a half after its founding, American Express has become a global financial services powerhouse and one of this nation's most recognizable
brands around the world.
American Express started out in 1850 as a freight and valuables delivery service for the rapidly expanding nation. The fledgling U.S. Postal Service was unreliable at
the time and only allowed shipment of letter-sized envelopes. This provided a business opening for the company to ship larger parcels and valuable items such as
jewelry, cash, stock certificates and other merchandise.
The company took a turn when it began to realize more profit from a sector of its customer base that included banks and other financial institutions. Banks placed a
high value on American Express' secure and reliable delivery service for interbank transfers and drafts made between eastern cities and the growing western
territories. American Express then began focusing its efforts on this sector and used its connections to eventually enter the financial services arena.
In the late 1890s, American Express decided to compete with the banks they serviced, by issuing money orders. This line of business took off rapidly and allowed the
company to expand into Europe, where the American Express brand name became associated with security, capital and dependability. Soon thereafter, the company
had major offices in London, Paris, Antwerp, Zurich and Berlin.
The beginning of World War I forced American Express into the travel services businesses. More than 150,000 Americans were stranded in Europe in 1914 at the
outbreak of the Great War. These citizens flocked to the offices of American Express seeking funds after other European banks refused to honor their American
letters of credit. American Express honored these letters of credit in full, which allowed American citizens to fund their passages back home.
In 1922, American Express jumped into the travel services business by providing luxury steamship travel around the world, along with most other related services for
passengers. Its traveler's check business meshed well with this well-heeled crowd of luxury globe-hoppers. The traveler's check business fueled the growth of the
company over the next several decades, based on the upfront fees and in how firm invested the float income.
In the 1950s, American Express issued its first credit card, which caught on quickly in the booming postwar economy. In 1966, the company issued its first gold card,
in an effort to cater to the upper echelon of business travel. Its platinum card debuted in the 1990s
American Express continues to be a powerful global brand through the present day with an array of consumer products ranging from the Blue Card to the ultra
exclusive Black Card, which isn't publicly advertised, but issued by invitation only to the wealthy and famous).
Optima® Platinum Card®

Pay Less, Get More

The Optima Platinum Card offers some of American Express' most extraordinary benefits. The Card has no annual fee, and comes with a competitive 0.00% APR for
the first 6 months of cardmembership, and then prime plus 6.00%. The Card has a 25 day grace period, and the option to pay over time. Additional Cards are fee-
free, so you can share virtually all the benefits and services with your friends or family members.

Enroll in Optima Platinum Card's Membership Rewards Express (SM) program

Why wait for the rewards you want? You can earn one point for virtually every dollar you spend on your Card. Which means you can get the rewards you want right
 now - from an incredible selection of clothing, electronics, dining experiences, online music, travel, and more.1

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Transfer balances from your higher-rate MasterCard®, Discover®, and Visa® cards to your American Express® Card account -with no transaction fee! Then enjoy the
Credit Type Annu
Target

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low APR: Fixed rate of 8.90% for life of balance (until the balance is completely paid off), on BT requests submitted with this application.

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You can view up-to-date billing information online, including transactions, charges, and payments.

Dedicated Customer Service

American Express is here to help you around the clock, with the kind of Customer Service that keeps Card members loyal for a lifetime. For immediate service, call
the phone number on the back of your Card.

Your Year End Summary: Now Available Online

Your new Online Year End Summary of Charges gives you access to important information 24 hours a day, seven days a week. Flexible features make organizing
your expenses a snap - download the Summary and print it out; sort by date, merchant name, or charge amount; review charges made within a category, such as
Travel and Restaurant. Your Year End Summary is an indispensable tool for preparing taxes and budgeting. You may also receive a paper Year End Summary in the
mail by calling the number on the back of your Card.
Quick Summary:
This rewards card with flexible options is issued by American Express. This card is intended for consumers, or "personal use" with a nearly perfect credit history.
Rates may vary among applicants, however the lowest standard APR is 9.25%* (Variable)*.

Important Rates:
There is a purchase introductory APR of 0.00% for 6 months*. Be cautious that some card issuers may charge higher rates and fees for cash advances.

There is no annual fee for this card.*

Rewards:
This is a flexible options rewards card. You should be able to choose different reward types, such as travel, points, or other options. This type of card adjusts to the
changing needs of the cardholder.

Credit Record Needed:

Based on the FICO score recommendation, applicants should have a great or nearly perfect credit record. A FICO credit score of 766 is recommended for a higher
chance of approval, but this is not required. There are a number of other factors that this issuer may also consider when making decisions for approval. While your
FICO score is usually a very important factor, you may want to consider other areas that may affect a decision for approval. For example, your debt to income ratio,
recent credit inquiries, 30+ day delinquencies, or current credit accounts nearing the maximum amount may affect a credit decision.

FICO scores/credit scores are used to represent the creditworthiness of a person and may be one indicator to the credit type you are eligible for. However, a credit
score alone does not guarantee or imply approval for any American Express product.

Other Basics:
The grace period listed for the Optima® Platinum Card® is at least 25 days*. So interest charges will not be applied for new purchases during this time. Be aware
that some issuers will begin charging interest on cash advances and balance transfers on the transaction date.
American Express acceptance among businesses is moderate, but global. You should not have a difficult time finding businesses that will accept this card as a form
of payment.

Other Remarks:
Balance Transfer APR: 8.90% (0.0244% DPR) for the life of the balance for balance transfer requests submitted on the application. Then the standard Purchase APR
will apply.

Approval Rate:
Currently, we have no applicant results in our system. You can be the first one to help by submitting your application results to assist other applicants before they
apply for this card.

There have been no approvals in our internal system that we can calculate for this card. This could be due to lack of time that this card has been listed at Finance
Globe or from other various factors. As we gain more information about the approval rates, we will update them here. Furthermore, if your FICO score is close to or
higher than 766, then your chance of approval may be even greater.

Approval Time:
Approval time for this offer is not listed. You should expect a final credit decision within a couple of weeks, but normally much sooner.

Community Opinion:
Based on community reviews, we found that 100% of 3 users recommend this card.
hoose 5 places to double your points
Browse by category to see the list of select merchants from which you can choose 5 places to earn double points. With the Choice Card, you earn 1 point for every
$1 in eligible Card purchases at your 5 places and 1 point for every $2 in Card purchases everywhere else.1 With the ChoicePlus Card, you earn 2 points for every $1
in eligible Card purchases at your 5 places and 1 point for every $1 in Card purchases everywhere else.2You can select from a list of places across retail, dining,
home & entertainment, health & essentials and travel.
DINING
ALICE FAZOOLI'S, JACK ASTOR'S, CANYON CREEK CHOPHOUSE, MCDONALD'S
SECOND CITY, LOOSE CHANGE CHARLIES MOXIE'S CLASSIC GRILL, CHOP RESTAURANTS, DENNYS,
BROWNS SOCIALHOUSE REVELSTOKE MOUNTAIN RESORT, SANDMAN HOTELS & INNS,
BYMARK, FABBRICA, NORTH 44°, ONE RESTAURANT SHARK CLUBS OF CANADA, THE SHARK CLUB OF LANGLEY
EARLS KITCHEN & BAR OLIVER & BONACINI RESTAURANTS
HARVEY'S, KELSEY'S, MILESTONE'S, MONTANA'S, SWISS CHALET, PICKLE BARREL
THE SECOND CUP THE KEG, HY'S STEAKHOUSES
Health and essentials
407 ETR LONDON DRUGS PUSATERI'S SHELL CANADA
7-ELEVEN LONGOS REXALL SOBEYS, FOODLAND, IGA,
BELL, VIRIGIN MOBILE, THE MARKETPLACE IGA (BC ROGERS, FIDO COMMISSO'S
SOURCE ONLY) SAVE-ON-FOODS, SAQ
CHEVRON MCEWAN PRICESMART FOODS, URBAN TELUS, KOODO MOBILE
ESSO METRO FARE, OVERWAITEA FOODS ULTRAMAR
GROCERY GATEWAY PETRO-CANADA SHAW WHOLE FOODS MARKET
HOME AND ENTERTAINMENT
APPLE CLUBLINK MIRVISH TICKETMASTER
BEST BUY, FUTURE SHOP CRATE & BARREL POTTERY BARN URBAN BARN
CINEPLEX ENTERTAINMENT, HOME DEPOT RESTORATION HARDWARE VISIONS ELECTRONICS
FAMOUS PLAYERS, ALLIANCE HOME HARDWARE SLEEP COUNTRY CANADA WEST ELM
ATLANTIS CINEMAS, GALAXY LEON'S STAPLES WILLIAM ASHLEY
ENTERTAINMENT LOWE'S THE BRICK WILLIAMS SONOMA
RETAIL
ALDO EXPERTS, FITNESS SOURCE, INDIGO, CHAPTERS, COLES, ROOTS
AMERICAN EAGLE GEN-X SPORTS INC, PODIUM, CALENDAR CLUB OF CANADA SPORTING LIFE
OUTFITTERS RNR OUTDOORS LULULEMON THE BAY, HOME OUTFITTERS
ATMOSPHERE, COAST BIRKS MARSHALL'S VICTORIA’S SECRET, BATH
MOUNTAIN SPORTS, BROWNS REITMANS, RW & CO, SMART AND BODY WORKS, PINK, LA
NATIONAL SPORTS, NEVADA H&M SET, THYME MATERNITY, SENZA
BOB'S GOLF, SPORT CHEK, HOMESENSE ADDITION-ELLE, WAL-MART
SPORT MART, SPORTS PENNINGTONS WINNERS
TRAVEL
AIR CANADA FAIRMONT HOTELS & EMBASSY SUITES HOTELS, PRINCESS CRUISES
AIR TRANSAT, NOLITOURS RESORTS DOUBLETREE HOTELS ROYAL CARIBBEAN CRUISES
AVIS FLIGHT CENTRE HOLIDAY INN HOTELS, SUNWING TOURS
BEST WESTERN HERTZ INTERCONTINENTAL HOTELS, THRIFTY
BUDGET HILTON HOTELS & RESORTS, CROWNE PLAZA HOTEL, WESTCORP HOTELS
CARNIVAL CRUISE LINES HILTON HOMEWOOD SUITES, CANDLEWOOD SUITES, WESTJET
CELEBRITY CRUISES HILTON GARDEN INN, STAYBRIDGE SUITES
ENTERPRISE RENT-A-CAR HAMPTON INN HOTELS, PORTER AIRLINES
1:Account must be in good standing. Membership Rewards points will be earned by the Basic Cardmember on the amount of all purchases, less credits and
adjustments. Funds advances, interest, balance transfers, Amex cheques, annual fees (if applicable), other fees, and charges for travellers cheques and foreign
currencies are not purchases and do not qualify for Membership Rewards points. Earn 1 Membership Rewards point for every $1.00 in Eligible Purchases at your 5
places, which means consumer purchases at Canadian locations of 5 places you (as the Basic Cardmember) choose from a predefined list of American Express
merchants, and 1 Membership Rewards point for every $2.00 in other qualified purchases at locations other than your 5 places. A minimum purchase of $1.00 is
required to earn points. View the list of participating merchants at americanexpress.ca/choose5places. List is subject to change without notice. Merchants with
multiple locations may submit transactions from different locations using different codes. This means that we may apply a different earn rate for purchases at different
locations of a merchant and you will not earn extra points at your 5 places if the merchant code is not in a bonus category. Extra points will not be earned at your 5
places where the merchant processes transactions using an electronic wallet, that are not made directly from the provider of the good or service, e.g. through a third
party, or by using a mobile device (e.g. smart phone) with an attached card reader. Selection of your 5 places can be made once per calendar year and applies to all
Supplementary Cards on the account. Additional conditions and restrictions apply as set out in the Membership Rewards Program Terms and Conditions and the
Membership Rewards Program section following the Cardmember Agreement provided in the welcome package.
2: Account must be in good standing. Membership Rewards points will be earned by the Basic Cardmember on the amount of all purchases, less credits and
adjustments. Funds advances, interest, balance transfers, Amex cheques, annual fees (if applicable), other fees, and charges for travellers cheques and foreign
currencies are not purchases and do not qualify for Membership Rewards points. Earn 2 Membership Rewards points for every $1.00 in Eligible Purchases at your 5
places, which means consumer purchases at Canadian locations of 5 places you (as the Basic Cardmember) choose from a predefined list of American Express
merchants, and 1 Membership Rewards point for every $1.00 in other qualified purchases at locations other than your 5 places. A minimum purchase of $0.50 is
required to earn points. View the list of participating merchants at americanexpress.ca/choose5places. List is subject to change without notice. Merchants with
multiple locations may submit transactions from different locations using different codes. This means that we may apply a different earn rate for purchases at different
locations of a merchant and you will not earn extra points at your 5 places if the merchant code is not in a bonus category. Extra points will not be earned at your 5
places where the merchant processes transactions using an electronic wallet, that are not made directly from the provider of the good or service, e.g. through a third
party, or by using a mobile device (e.g. smart phone) with an attached card reader. Selection of your 5 places can be made once per calendar year and applies to all
Supplementary Cards on the account. Additional conditions and restrictions apply as set out in the Membership Rewards Program Terms and Conditions and the
Membership Rewards Program section following the Cardmember Agreement provided in the welcome package.
Amex everyday
How Membership Rewards® Points Add Up
EARN 20% MORE POINTS
Make 20 or more purchases with your Card in a billing period and earn 20% extra points on those purchases less returns and credits. Terms apply.‡
2X POINTS AT US SUPERMARKETS
2x points at US supermarkets on up to $6,000 per year in purchases. Terms Apply.‡
1X POINTS ON OTHER PURCHASES.
1X POINTS for every eligible dollar you spend‡
PAYMENT FLEXIBILITY
Your Card gives you the option to carry a balance with interest or pay in full each month. So, whether you're managing your monthly expenses or making a large
purchase, you can have the payment flexibility you need while continuing to earn rewards.
IT'S EASY AND FREE TO ENROLL FOR CARD MEMBERS.
Amex Offers rewards you at places you like to shop, dine, travel, and more. Get Your Offers.
MERCHANT COVERAGE
Over 1.5 million more places in the U.S. started accepting American Express® Cards in 2017.
$0 Balance Transfer Fee Offer¤ +
Earn 10,000 Membership Rewards® Points
after you use your new Card to make $1,000 in purchases in your first 3 months.†
$0 Balance Transfer Fee. Balance transfers must be requested within 60 days of account opening.
NO ANNUAL FEE¤
APR
0% intro APR on purchases and balance transfers for 15 months, then a variable APR, 14.74% to 25.74%.¤