Taylor Scott
American Express, also known as Amex, is a credit card issuer that was ranked as the largest in the world in terms of global purchase volume in 2022. The company has a long history in the financial services industry, dating back to the introduction of its traveller's cheques in 1891. In 1959, American Express became the first company to issue embossed plastic cards, and it has since expanded its offerings to include various types of credit cards, such as the Gold Card for big-spenders in 1966. American Express cards are issued through partnerships with banks, such as MBNA and Bank of America in the United States, and Axis Bank, ICICI Bank, and Citibank in India.
| Characteristics | Values |
|---|---|
| American Express Cards Issuing Banks | MBNA, Bank of America, ANZ, LianTong, ICICI Bank, Citibank, Axis Bank |
| American Express Cards Issuing Years | 2004, 2006, 2007, 2008, 2017, 2020 |
| American Express Cards Blocking | Merchants that accept American Express cards from steering customers to other cards are blocked |
| American Express Cards Ranking | Largest credit card issuer measured by global purchase volume in 2022 |
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What You'll Learn
American Express cards issued by banks like Axis, ICICI, and Citibank
American Express cards issued by banks such as Axis, ICICI, and Citibank differ from those issued directly by American Express. In this case, the bank acts as the credit lender, and American Express is just the card network. The rewards and benefits are provided by the bank, not American Express. For example, the ICICI Sapphiro card can be used on three networks: Visa, Mastercard, or American Express. While the cards are largely the same, there may be some network-specific offers or discounts available on certain websites or platforms, such as Swiggy.
American Express also issues its own cards, which differ from those issued by banks on the American Express network. In this case, American Express is both the credit lender and the network. Their cards are known for offering attractive rewards that can be redeemed at Marriott hotels.
Historically, Visa and Mastercard rules prohibited issuers of their cards from also issuing American Express cards in the United States. However, these rules were changed in 2004, allowing American Express to partner with MBNA and Bank of America to issue cards. This marked the beginning of American Express cards being issued by banks.
American Express has continued to expand its partnerships and card offerings globally. In 2006, the company's UK division joined the Product Red coalition and issued a Red Card, donating a portion of each purchase to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. In 2017, American Express established a joint venture in China to operate its payment card brand locally, and it has also acquired various businesses to enhance its product portfolio and global presence.
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American Express cards issued directly by American Express
American Express, also known as Amex, is a financial services company that issues its own credit cards. It is both a payment processor and a card issuer, and it offers credit cards, charge cards, and prepaid cards. Amex cards are known for their rewards points, cash back, and travel perks, as well as their high-quality customer service.
Historically, American Express has been the first company to issue embossed plastic cards in 1959, and it introduced the Gold Card for big-spenders in 1966. In 2006, the UK division of American Express joined the Product Red coalition and issued a Red Card, donating a portion of each purchase to help fight diseases in Africa.
However, it's important to note that not all cards labelled American Express are issued directly by the company. There are third-party American Express cards issued by major financial institutions, such as Wells Fargo in the US and Banco Santander in Mexico. These cards are processed by American Express but are designed and issued by the third-party institution, and the benefits and protections are determined by the card issuer.
When you sign up for an American Express card through another bank, that bank becomes the card issuer, and you will redeem your rewards and use their account portals. For example, the USAA Cashback Rewards Plus American Express® Credit Card is issued by USAA, and all payments and rewards redemptions are handled by them.
In summary, American Express issues cards directly and through partners, and it's important to understand the differences in benefits and protections when choosing an Amex card issued by a third-party institution.
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American Express cards and antitrust litigation
American Express, also known as Amex, is a credit card company that was ranked as the largest credit card issuer by global purchase volume in 2022. The company launched the first paper credit cards in 1959 and the first embossed plastic cards in 1959. In 1966, American Express introduced the Gold Card for "big-spending members".
In the case of Ohio v. American Express Co. (2018), merchants filed a class-action lawsuit against American Express, claiming that charging high fees to merchants was a violation of the Sherman Antitrust Act. The lawsuit argued that American Express charged significantly higher fees than other credit card providers. American Express defended its practice by arguing that the anti-steering policies benefited its cardholders, with higher transaction fees helping to maintain member services.
The case specifically involved policies set by credit card banks that prevented merchants from encouraging customers to use cards from other issuers with lower transaction fees, forcing merchants to pay higher fees. This was in response to Discover's low-cost transaction fee model, which incentivized merchants to steer customers towards using their cards. Visa, Mastercard, and American Express developed anti-steering contractual language to prevent this.
The United States Department of Justice (DOJ) filed a civil antitrust lawsuit against Visa, Mastercard, and American Express in 2010 after a two-year investigation. In 2015, the DOJ and several states prevailed during a District Court trial, citing harm to merchants. However, the Appeals Court reversed this decision in 2016, ruling that the plaintiffs had not shown harm to both sides of the two-sided market, a novel test in antitrust law. The Supreme Court affirmed the Appeals Court's ruling in 2018, upholding that steering provisions do not violate antitrust laws.
The Ohio v. American Express Co. case sparked controversy and raised questions about the application of antitrust measures in two-sided markets, which are becoming a significant portion of the national economy. The decision has been criticized for its narrow focus and potential negative implications for antitrust enforcement.
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American Express as a bank holding company
American Express (Amex) is a bank holding company. In 2008, during the financial crisis, the company received Federal Reserve System approval to convert to a bank holding company. This made it eligible for government assistance under the Troubled Asset Relief Program (TARP).
Amex's journey to becoming a bank holding company began in the 1980s when it embarked on an effort to become a financial services holding company. It made several acquisitions, creating an investment banking arm. In 2006, the company acquired the Corporate Payment Services business of General Electric for $1.1 billion in cash. This transaction added V-Payment to its product portfolio, enabling tightly controlled, single-use card numbers.
In March 2008, Standard Chartered Bank acquired American Express Bank Ltd, the international banking subsidiary of American Express, for $823 million. This was followed by approval from the Federal Reserve to convert to a bank holding company in November 2008. This allowed Amex to issue bonds that were government-guaranteed through June 2012 and provided access to government money through the Troubled Assets Relief Program. The company also found it easier to buy banks, take deposits from consumers and companies, and reduce its borrowing costs.
American Express is a world leader in providing charge and credit cards, including cards issued by itself and cards issued by third-party banks and other institutions that are accepted on the American Express network. The company also has two US bank subsidiaries: American Express Centurion Bank, an industrial loan bank chartered in Utah, and American Express Bank FSB, a federal savings bank. Through these institutions, Amex issues proprietary credit and charge cards, funds card member loans, and offers certificates of deposit.
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American Express cards in China
American Express cards are difficult to use in mainland China, except in luxury or international hotels and airlines. This is not unique to China, as American Express is not accepted for many everyday purchases, especially in small establishments, in Europe or South America either.
In 2017, American Express established a joint venture company, LianTong, in China to operate its payment card brand locally. In June 2020, it obtained a local bank card clearing business license in China.
To use an American Express card in China, it is recommended to download the Alipay app and add your card to it. You can then use QR payments through the app at millions of accepting locations across China. Another option is to use Wechat Pay, which started to allow the addition of almost all American Express cards issued abroad in 2024.
American Express was ranked as the largest credit card issuer measured by global purchase volume in 2022. It was the first company to issue embossed plastic credit cards in 1959 and introduced the Gold Card for "big-spending members" in 1966.
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Frequently asked questions
Yes, American Express cards are issued by MBNA. Initially, US banks could not issue American Express cards due to restrictions by Visa and Mastercard. However, in 2004, American Express reached an agreement with MBNA, and the first card from this partnership was released in 2006.
When a bank issues an American Express card, the bank acts as the credit lender, and American Express is the card network. The rewards and benefits are provided by the bank, not American Express.
Yes, ANZ announced in 2017 that it would no longer be issuing American Express cards.
Yes, American Express had an international banking subsidiary, American Express Bank Ltd. However, in 2008, it was acquired by Standard Chartered Bank.
