American Express
American Express Company, commonly Amex, is an American bank holding company and multinational financial services corporation specialising in payment cards. It is headquartered at 200 Vesey Street, the American Express Tower, in Battery Park City in Lower Manhattan. In 2026 the company announced that it would develop and be the sole occupant of a new 2 World Trade Center tower.
| American Express Company | |
|---|---|
| Type | Public |
| Traded as | NYSE: AXP |
| Industry | Financial services, payment cards |
| Founded | 1850, Buffalo, New York |
| Founder | Henry Wells, William G. Fargo, John Warren Butterfield |
| Headquarters | New York City, United States |
| Area served | Worldwide |
| Key people | Stephen Squeri (chairman and CEO) |
| Products | Charge cards, credit cards, travellers cheques |
| Services | Payment network, travel services, merchant acquiring, banking |
| Subsidiaries | American Express National Bank |
| Website | americanexpress.com |
Amex is the fourth largest card network in the world by purchase volume, behind China UnionPay, Visa and Mastercard. As of 31 December 2023, 141.2 million cards were in force worldwide, with average annual spending per card member of 24,059 dollars, and the network handled more than 1.7 trillion dollars in purchase volume. It is the sixteenth largest bank in the United States with 270 billion dollars in assets, ranked 58th on the Fortune 500 and 28th among the most valuable brands by Forbes.
The company is unusual among card networks in operating a closed loop: it issues cards, acquires merchants and runs the network itself, rather than acting only as a network for issuing banks. This structure supports higher merchant fees and richer rewards but has limited its acceptance, particularly outside the United States, and has been the subject of major antitrust litigation.
History
Express delivery, 1850 to 1918
American Express was founded in 1850 in Buffalo, New York as a freight forwarding business, formed as a joint-stock corporation by the merger of the express delivery companies of Henry Wells (Wells and Company), William G. Fargo (Livingston, Fargo and Company) and John Warren Butterfield (Butterfield, Wasson and Company). Wells and Fargo went on to found Wells Fargo in 1852 after Butterfield and other directors objected to extending American Express operations to California.
For roughly two decades the company enjoyed a virtual monopoly on the express transport of goods, currency and securities across New York State. After moving to larger premises at 63 and 65 Broadway in 1874 it extended nationwide through affiliations with other express companies including Wells Fargo, with railroads and with steamship lines.
The move into financial services began in 1882 with a money order business. Between 1888 and 1890 the president J. C. Fargo travelled in Europe and returned frustrated: despite carrying traditional letters of credit, he had found it difficult to obtain cash outside major cities. He asked Marcellus Flemming Berry to devise something better, and Berry produced the American Express Travelers Cheque, launched in 1891 in denominations of 10, 20, 50 and 100 dollars.
The travellers cheque made American Express an international institution. At the outbreak of the First World War in 1914 it was among the few companies to honour letters of credit, travellers cheques and money orders held by Americans stranded in Europe. The British government appointed it official agent, and it delivered letters, money and relief parcels to prisoners of war, with employees entering camps to cash drafts for British and French prisoners. By the end of the war it was delivering 150 tons of parcels a day to prisoners in six countries. A travel division was established in 1915.
The express business ended abruptly. American Express had been among the monopolies investigated by the Interstate Commerce Commission under Theodore Roosevelt, which was concerned by its control of railroad express traffic. The resolution came from an unrelated direction: during the severe coal shortage of the winter of 1917, President Woodrow Wilson commandeered the railroads on 26 December to move troops, supplies and coal. The treasury secretary William Gibbs McAdoo, tasked with consolidating the railways for the war effort, nullified all contracts between express companies and railroads and proposed merging the express companies into one. The American Railway Express Company was formed in July 1918, taking custody of the pooled equipment and property of the existing firms. American Express contributed the largest share at 40 per cent, having held express rights over 71,280 miles of railroad with 10,000 offices and more than 30,000 employees.
The charge card, 1920s to 1970s
Executives discussed a travel charge card as early as 1946, but the company only considered it seriously after Diners Club launched in March 1950. Under the chief executive Ralph Reed, American Express entered the business at the end of 1957, and by the launch date of 1 October 1958 public interest was such that 250,000 cards had been issued in advance.
The card carried an annual fee of six dollars, one dollar more than Diners Club, deliberately positioning it as a premium product, a strategy the company has followed ever since. The first cards were paper, with the account number and member name typed on them. In 1959 American Express became the first major issuer to introduce embossed plastic cards.
Howard L. Clark became president and chief executive in 1960. The gold card followed in 1966, the green card in 1969, the platinum card in 1984 and the invitation-only Centurion card in 1999. The advertising campaign Don't Leave Home Without It was introduced in 1975 and revived in 2005.
Diversification and retrenchment
During the 1980s American Express acquired and subsequently divested a stake in the brokerage Shearson, part of a broader attempt to build a financial supermarket that was eventually unwound in favour of concentration on payments and travel.
In the 1990s the company stopped offering reduced interchange rates to merchants who accepted Amex exclusively and expanded its share through targeted marketing. It converted to a bank holding company during the 2008 financial crisis, gaining access to Federal Reserve facilities. It began operating airport lounges, branded Centurion Lounges, in 2013.
Business
American Express had a nine per cent share of worldwide transaction volume in 2023. Its cards are accepted at 99 per cent of United States merchants that take credit cards but are less widely accepted in Europe and Asia, where the higher fees charged to merchants have limited adoption.
The product range covers travel and dining cards, everyday spending cards earning points, and cash back cards. The Green, Gold and Platinum cards are aimed at frequent travellers and diners, with benefits structured around those activities. American Express National Bank is a direct bank owned by the company.
The company's economics depend on what it calls its spend-centric model: it earns primarily from the fees charged on transaction volume rather than from interest on revolving balances, which makes its card members' spending, rather than their borrowing, the driver of revenue.
Controversies
Anti-steering rules and Ohio v. American Express
American Express contracts prohibited merchants from steering customers toward cards with lower fees, for example by asking for a different card or disclosing the cost differential. The Department of Justice and seventeen states sued in 2010, arguing that these anti-steering provisions suppressed competition among networks and raised costs for consumers.
A district court found against the company in 2015. The Second Circuit reversed, and in Ohio v. American Express Co. (2018) the Supreme Court upheld the reversal by five votes to four, holding that credit card networks are two-sided transaction platforms and that the plaintiffs had failed to show a net anticompetitive effect across both merchants and cardholders. The decision substantially raised the burden on antitrust plaintiffs challenging platform conduct and has been widely debated in competition law scholarship.
The Boston Fee Party
In 1991 a group of restaurateurs in Boston, led by the owner of the Italian restaurant Rosalie's, publicly rejected American Express over its merchant fees, encouraging others to accept only Visa and Mastercard. The episode, dubbed the Boston Fee Party, drew national attention and forced the company to reduce rates and improve merchant relations, and is cited as the point at which its pricing power was first effectively challenged.
Sales practices
In 2020 reporting alleged that American Express sales staff had misrepresented card terms and fees to small business customers in order to meet targets, and had in some cases enrolled customers without clear consent. The company dismissed employees, said that it had found limited evidence of systemic misconduct, and faced inquiries from federal regulators. In 2025 it agreed to pay approximately 230 million dollars to resolve federal investigations into deceptive marketing of card and wire products to small businesses, without admitting liability.
Diversity programmes
In 2021 and 2022 the company faced public criticism and litigation threats over internal anti-racism training programmes, with former employees alleging that the material was discriminatory against white staff. American Express defended the programmes as intended to address disparities in its workforce.
Card acceptance and merchant costs
The persistent criticism of American Express from merchants concerns its discount rate, historically the highest of the major networks. Small businesses in particular have argued that they cannot afford to accept the card yet cannot afford to refuse customers who carry it. The company's response has been its OptBlue programme, which reduced rates for smaller merchants and substantially increased acceptance in the United States.
See also
References