American Express — Business Overview
What does American Express do?
American Express is a "closed-loop" payments company that sits on both sides of every transaction — as the card issuer to consumers and businesses, and as the acquirer for merchants. Most card networks (like Visa and Mastercard) are "open-loop," meaning they connect third-party banks that separately issue cards and sign up merchants. American Express does both in-house, which gives it direct data and relationships at both ends of a transaction. As of December 31, 2025, it had 86.6 million proprietary cards-in-force worldwide, and $1,670 billion in worldwide billed business (spending on cards American Express itself issued).
The company operates across four reportable segments:
| Segment | What it does |
|---|---|
| U.S. Consumer Services (USCS) | Issues credit and charge cards to American consumers; the core consumer business including premium products like the Platinum Card |
| Commercial Services (CS) | Provides corporate cards, expense management tools, and B2B payment solutions to small businesses, mid-sized companies, and large corporations in the U.S. |
| International Card Services (ICS) | Card-issuing business outside the United States, serving consumers and commercial customers globally |
| Global Merchant and Network Services (GMNS) | Signs up and manages millions of merchant relationships worldwide; also runs the card payment network used by third-party bank card issuers in ~110 countries |
How does American Express make money?
American Express earns revenue from three main sources: discount revenue (fees charged to merchants), card fees, and interest income. When a cardholder pays with an Amex card, the merchant pays a small percentage of the transaction — the discount rate — to American Express. This is the largest revenue stream. The company also charges annual fees on many of its cards (the Platinum Card, for example, carries a significant annual fee), and earns interest income from cardholders who carry balances on credit products or take out loans through the bank subsidiary.
The business model is explicitly designed to prioritize high-spending cardholders over high-borrowing ones. The filing states the company focuses "on generating revenues primarily by driving spending on our cards and secondarily through finance charges and fees." This is different from most traditional banks, which lean more heavily on interest income. Higher spending per card means more merchant discount revenue, and it also attracts partners (like Delta Air Lines and Marriott) who pay to be part of the Membership Rewards ecosystem. The Delta cobrand portfolio alone represented approximately 13% of worldwide billed business as of year-end 2025 — a meaningful concentration in a single partnership.
What market does American Express operate in?
American Express competes in the global payments industry, a broad market that includes card networks, card issuers, merchant acquirers, digital wallets, buy-now-pay-later lenders, and emerging fintech platforms. The company also operates a banking subsidiary (American Express National Bank) offering savings accounts, checking accounts, and consumer loans, placing it in consumer banking as well.
The payments industry is growing but increasingly competitive and technologically disrupted. The shift away from cash and checks toward digital payments is a secular tailwind. However, the filing highlights meaningful headwinds: the rapid growth of alternative payment mechanisms (PayPal, Alipay, Shop Pay, buy-now-pay-later services), the rise of agentic commerce (AI systems making purchases autonomously), stablecoins, and real-time payment rails. These forces risk disintermediating Amex from its customers. Additionally, regulatory pressure on interchange fees and network pricing in markets like the EU and Australia has already forced Amex to exit its network business in those regions.
Who are American Express's main competitors?
American Express occupies a premium niche in a market dominated by larger open-loop networks. By purchase volume, it is the fourth-largest general-purpose card network globally, behind Visa, China UnionPay, and Mastercard. It competes as both a network and a card issuer — an unusual combination — but this integration is precisely what the company cites as its key competitive advantage: the ability to see both sides of a transaction gives it superior data for fraud prevention, credit underwriting, and targeted marketing.
Key competitors include:
- Card networks: Visa, Mastercard, China UnionPay, JCB, Discover and Diners Club International (both now owned by Capital One)
- Digital payment platforms: PayPal, Alipay, Shop Pay, and regional networks like the National Payments Corporation of India
- Card issuers: Banks and fintechs that issue Visa/Mastercard-branded cards targeting premium consumers, directly competing for the same high-spending customers and cobrand partnerships (e.g., competing for lounge access deals and dining experiences)
The competition for premium customers and cobrand partners is described as "intense" and heightening. Rivals have specifically targeted Amex's turf — airport lounge access, dining perks, and travel rewards — areas where Amex has historically differentiated itself.
Where does American Express operate?
American Express operates globally, with the United States as its dominant market. The company's network processes transactions across approximately 110 countries and territories through relationships with third-party bank partners that issue Amex-branded cards locally. As of year-end 2025, those third-party issuers had 66.2 million cards-in-force — separate from Amex's own 86.6 million proprietary cards. Key markets beyond the U.S. include the United Kingdom, the European Union, Australia, Japan, Canada, and Mexico, which together represent a significant portion of worldwide billed business.
The company has a notably larger workforce outside the U.S. than inside. Of its approximately 76,800 total employees, roughly 50,900 (66%) are based outside the United States, reflecting the scale of its international operations in card servicing, technology, and network management.
Regulatory exposure outside the U.S. is a real operational risk. The filing notes Amex already exited its network business in the EU and Australia due to regulation capping interchange fees. It faces ongoing legal proceedings in the Netherlands regarding its KLM cobrand arrangement and EU interchange rules. India imposed restrictions on Amex's card-issuing activities in 2021 (lifted in 2022 after compliance investments). These examples illustrate that international expansion comes with meaningful regulatory fragmentation and geopolitical risk.