American Express (AXP) is the world’s largest card issuer. It’s a global services company that provides payment, travel, and expense management solutions for individuals and businesses around the world. Its principal products and services are charge and credit payment card products and travel-related services.
A charge card is similar to a credit card but requires the cardholder to pay the balance in full when a statement is issued.
American Express also offers network services. The company offers point-of-sale, marketing, and information products and services for merchants. Its fee-based services include fraud prevention services and the design of customized customer loyalty and rewards programs.
It’s established as a premium network for high-spending card members. Its annual charge volume exceeded $1 trillion in 2014. In comparison, Visa’s (V) annual charge volume was $7.3 trillion and MasterCard’s (MA) volume was $4.5 trillion in 2014.
American Express is the biggest player in the card market based on purchase volumes. It’s followed by JPMorgan Chase (JPM). American Express and JPMorgan Chase together make up ~9.7% of the Financial Select Sector SPDR Fund (XLF). The graph above shows the largest credit card issuers globally based on credit and charge volume.
Visa and MasterCard are the other two biggest players in the card market. However, these two differ from American Express in that they don’t issue cards. They just offer payment networks to process transactions between the card issuer and the merchant.
American Express competes in the global payments industry with charge, credit, and debit card networks, issuers and acquirers, as well as evolving alternative payment providers.
In this series, you’ll get to know more about the operations and offerings of American Express. You’ll learn about the stock’s performance and factors that are set to affect it going forward. We’ll also look at some of the key company strengths that set the stock apart from its competitors. This will help you make more informed and sophisticated investment decisions.