American Express Company
American Express Company, together with its subsidiaries, operates as an integrated payments company in the United States, Europe, the Middle East and Africa, the Asia Pacific, Australia, New Zealand, Latin America, Canada, the Caribbean, and internationally. It operates through four segments: U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services. The company offers credit and charge cards and complementary products and services, including travel, dining, and lifestyle and expense management products and services; and banking and other payment and financing products and services, including deposits and non-card lending. It also provides merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services, as well as network services. The company offers its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, in-house sales teams, direct mail, telephone, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.
What does it do?
American Express is the company behind those premium credit and charge cards you see wealthy travelers pulling out at restaurants and airports. Unlike Visa or Mastercard, Amex doesn't just process payments — it actually issues the cards directly to customers and takes on the financial relationship itself. When you spend on an Amex card, the company earns fees from merchants, charges you an annual membership fee, and if you carry a balance, earns interest. Think of it as a financial club: the card in your wallet is both a payment tool and a membership to perks like lounge access, travel credits, and concierge services.
American Express is a bellwether for how affluent consumers are feeling — its cardholders tend to be higher earners who keep spending even when the economy wobbles, which makes Amex more resilient than most credit companies during downturns. Revenue jumped from $65.9B to $72.2B in the latest year, a nearly 10% increase, signaling that its wealthy customer base is still spending aggressively despite high interest rates. Investors are watching Amex closely to gauge whether premium consumer spending — one of the last strong pockets of the economy — is holding up.
How does it make money?
Amex makes money in three main ways: discount revenue (fees charged to merchants every time a customer swipes an Amex card, typically higher than competitors), net interest income (interest earned when cardholders carry a balance), and card fees (annual membership fees ranging from $95 to $695 for premium cards like the Platinum). With $72.2B in total revenue and $10.7B in net profit, the business converts roughly 15 cents of every dollar into profit — a healthy margin for a financial company. The high annual fees are particularly valuable because they create predictable, recurring income regardless of how much customers actually spend.
Why do investors care?
The growth story at Amex centers on two things: younger affluent customers and international expansion. Amex has been surprisingly successful signing up Millennials and Gen Z consumers who are willing to pay $695 a year for a Platinum card because the travel perks offset the cost — a very loyal customer once hooked. Internationally, markets like Asia Pacific and Latin America are underpenetrated, meaning there are tens of millions of potential premium card customers Amex hasn't reached yet. For the thesis to work, Amex needs to keep attracting younger high-earners, hold onto merchants despite its higher fees, and avoid a sharp rise in customers failing to repay their debts.
Deep Dive
MemberA full investor briefing on American Express Company — history, leadership, risks, and outlook.