American Express Profile

New York-based American Express is a global financial services provider known for their credit card operations. The company currently employs over 65,000 workers around the world, including the company's European and Asian headquarters in London and Singapore, respectively. American Express's revenue in 2005 topped $24 billion.

As of 2001, American Express is headed by Kenneth Chenault. Chenault, a graduate of Harvard Law School, was the first African American to be the head of a Fortune 500 firm. He replaced former CEO Harvey Golub (1993-2000) who now serves as chairman of the board at the Campbell Soup Company. Golub's predecessor, James D. Robinson III, served ad CEO for American Express from 1977 until he retired in 1993.

Early Company History

American Express started in 1850 as a delivery service between the eastern United States and the western frontier. Because of limitations in what could be delivered by the United States postal service, American Express provided services to banks which needed to ship money and financial documents across the country.

By the beginning of the 20th century, American Express had begun providing financial services in addition to delivery services. Money orders (launched in 1882) and traveler's checks (started in 1891) gained in popularity as Americans increased their travel to other parts of the country and the world. Traditional lines of credit, which were formerly used to acquire money during extended periods of travel, were not accepted in all location.

After the introduction of travelers' checks, American Express began forming relationships with European financial institutions. In 1895, American Express opened its first European office; it was located in Paris, France. Within the next fifteen years, the company would open additional European locations, including branches in Italy, Germany, England, and Denmark.

During its period of expansion in Europe, American Express was awarded a contract by the United States to handle all currency exchange services for the immigrants entering the country through Ellis Island.

Credit Card History

In 1958, American Express issued its first credit card. While viewed as a potential detractor from its traveler's checks, competitors were already issuing credit cards due to customer demand. In the end, the negative predictions were unfounded. The company's traveler's checks remain a popular service.

Initially, American Express credit cards were slips of paper with the card holder's membership information typed on the front. In 1959, the company was the first in the industry to begin issuing plastic cards.

By 1963, American Express had issued more than 1 million credit cards. These cards could be used in thousands of locations within the United States and overseas. Three years later, the company issues its first American Express Gold card. The American Express Platinum card was introduced in 1984. Only certain existing card holders were invited to apply for the exclusive card.

In 1986, American Express's earnings rose about the $1 billion mark for the first time in the company's history. One year later, the company brought its first revolving credit product – the Optima card – to the market.

American Express continues to add new credit cards to their product line-up. In 1999, the Centurion Card with its $1,000 (as of 2005, this fee is now $2,500) annual fee and exclusive perks and the Blue Card which required no annual fee and targeted young adults were both released.

Since 2005, American Express has expanded its credit card offerings to include ExpressPay. This service does not require swiping the card in order to reach its information. A number of retailers, including McDonald's and CVS, have incorporated ExpressPay readers into their stores for American Express customers.

The American Express Clear card was also introduced in 2005. It includes no fees and uses ExpressPay.

Merchant Relations

Between the 1980's and 1990's, American Express forged exclusive agreements with retailers and restaurants. In exchange for lower merchant fees, these businesses would only accept American Express credit cards from its customers. Beginning in 1991, some of these businesses began refusing to accept the cards because of the higher merchant fees compared to those charged by Visa and Mastercard. As a result, American Express began to alter its policies and now charges only slightly higher merchant fees than their competitors.

Despite this change, some retailers still only accept American Express cards. These merchants include Neiman Marcus (the store does accept its store-issued credit card as well) and Costco. In fact, American Express will continue to be the exclusive credit card of Costco until at least 2014.

Philanthropy

American Express is involved in several philanthropic causes. The company is a founding sponsor of the World Monuments Watch – an organization created to protect endangered monuments around the globe.

In 1997, American Express established the Performing Arts Fund, which has provided over $11 million in grants throughout the United States.

Additionally, American Express and the National Endowment for Financial Education provide immigrants, young employees, and other groups with personal finance education.

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