{"id":36834,"date":"2026-09-08T23:56:00","date_gmt":"2026-09-08T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=36834"},"modified":"2026-08-14T11:31:44","modified_gmt":"2026-08-14T03:31:44","slug":"american-express-group","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/","title":{"rendered":"American Express, once the largest financial group"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_87_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Diversified_conglomerate\" >Diversified conglomerate<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#American_Express_establishment\" >American Express establishment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Delivery_Business\" >Delivery Business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#New_Business_and_Transformation\" >New Business and Transformation<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Spinoffs_and_divestiture\" >Spinoffs and divestiture<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Spin-off_of_Credit_Card_Data_Business\" >Spin-off of Credit Card Data Business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Spin-off_of_investment_banking_business\" >Spin-off of investment banking business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Spin-off_of_financial_advisory_department\" >Spin-off of financial advisory department<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Selling_tax_and_business_services\" >Selling tax and business services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Selling_banking_business\" >Selling banking business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Spin-off_business_travel_business\" >Spin-off business travel business<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Diversified_and_huge_business\" >Diversified and huge business<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Current_business\" >Current business<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Credit_card_business\" >Credit card business<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#The_fourth_largest_credit_card_company_in_the_world\" >The fourth largest credit card company in the world<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Key_operating_figures\" >Key operating figures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Customized_cards\" >Customized cards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Upgraded_Credit_Cards\" >Upgraded Credit Cards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Low_Acceptance_Outside_the_US\" >Low Acceptance Outside the U.S.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Boston_Fee_Party_Incident\" >Boston Fee Party Incident<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Costco_the_largest_customer_switches_to_Visa_cards\" >Costco, the largest customer, switches to Visa cards<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Travelers_checks\" >Travelers&#8217; checks<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Predecessors\" >Predecessors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#How_did_the_idea_come_about\" >How did the idea come about?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Internationalizing_American_Express\" >Internationalizing American Express<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Investment_Banking_Business\" >Investment Banking Business<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#First_Entering_the_Securities_Brokerage_Market\" >First Entering the Securities Brokerage Market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Acquisition_of_Lehman_Brothers\" >Acquisition of Lehman Brothers<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Banking_Business\" >Banking Business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Travel_Agency_Business\" >Travel Agency Business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Airport_lounges\" >Airport lounges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Competitors\" >Competitors<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Credit_card_competitors\" >Credit card competitors<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/09\/08\/american-express-group\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Diversified_conglomerate\"><\/span>Diversified conglomerate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"American_Express_establishment\"><\/span>American Express establishment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In 1850,<a href=\"https:\/\/www.americanexpress.com\/\" target=\"_blank\" rel=\"noopener\"> American Express (ticker: AXP)<\/a> was formed as a joint stock company by the merger of Butterfield, Wasson &amp; Co., a cash transport company owned by Henry Wells, William G. Fargo and John Butterfield. Note that the first two founders were also the founders of Wells Fargo (US stock code: WFC)!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Delivery_Business\"><\/span>Delivery Business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When American Express was founded, its main business was freight courier. It was a freight forwarding company, which is why the word &#8220;Express&#8221; was in the company name.<\/p>\n\n\n\n<p>In the winter of 1917, the United States suffered a severe coal shortage, and in December President Wilson requisitioned the railroads to transport federal troops, their supplies and coal. All contracts between express companies and railroads were canceled, and the government merged all existing express companies into one company to meet the needs of the country. This move ended American Express&#8217;s express business, and a new company was formed in July 1918 to take over the centralized equipment and property of all existing express companies, with the largest share (40%) coming from American Express.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"New_Business_and_Transformation\"><\/span>New Business and Transformation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>During the 2008 financial crisis, American Express transformed into a bank holding company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Spinoffs_and_divestiture\"><\/span>Spinoffs and divestiture<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Spin-off_of_Credit_Card_Data_Business\"><\/span>Spin-off of Credit Card Data Business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>First Data (ticker:FDC) was formed in 1969. In 1976, First Data became the first company to process credit cards issued by Visa and MasterCard banks.<\/p>\n\n\n\n<p>In 1980, American Express Information Services (ISC) acquired 80% of First Data. The remaining 20% \u200b\u200bwas purchased in 5% increments each year until June 1983.<\/p>\n\n\n\n<p>In April 1992, American Express spun off First Data in its initial public offering.<\/p>\n\n\n\n<p><a href=\"https:\/\/investors.fiserv.com\/company-information\/\" target=\"_blank\" rel=\"noopener\">Fiserv (ticker: FI) acquired First Data in July 2019.<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Spin-off_of_investment_banking_business\"><\/span>Spin-off of investment banking business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In June 1994, American Express spun off its remaining investment banking and institutional businesses into Lehman Brothers (ticker: LEH), ending its foray into brokerage business.<\/p>\n\n\n\n<p>In mid-2008, affected by the chain reaction of the subprime mortgage storm, it suffered a major blow in terms of finance and suffered losses. <a href=\"https:\/\/www.nytimes.com\/2008\/09\/15\/business\/15lehman.html\" target=\"_blank\" rel=\"noopener\">On September 15, 2008, after the US Treasury, Bank of America and Barclays Bank of the United Kingdom successively abandoned acquisition negotiations, Lehman Brothers announced that it had filed for bankruptcy protection<\/a>. Lehman Brothers&#8217; bankruptcy is considered a sign that the 2007-2008 global financial crisis was out of control.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Spin-off_of_financial_advisory_department\"><\/span>Spin-off of financial advisory department<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>On September 30, 2005, American Express completed the corporate spin-off of its American Express financial advisory department Ameriprise Financial. The main business of MTBC Financial is to provide financial planning products and services, including wealth management, asset management, insurance, annuities and estate planning. As of April 2022, more than 80% of the company&#8217;s revenue comes from wealth management.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Selling_tax_and_business_services\"><\/span>Selling tax and business services<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In August 2005, H&amp;R Block (ticker: HRB) acquired American Express&#8217;s tax and business services division (TBS) and merged it with RSM McGladrey.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Selling_banking_business\"><\/span>Selling banking business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In March 2008, <a href=\"https:\/\/www.theguardian.com\/business\/2007\/sep\/18\/9\" target=\"_blank\" rel=\"noopener\">Standard Chartered Bank acquired American Express&#8217;s international banking subsidiary American Express Bank Inc.<\/a> for US$823 million.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Spin-off_business_travel_business\"><\/span>Spin-off business travel business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In March 2014, American Express announced the spin-off of its business travel business into American Express Global Business Travel and sold 50% of the business to an investment group led by Certares LP for US$900 million.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Diversified_and_huge_business\"><\/span>Diversified and huge business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Current_business\"><\/span>Current business<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Credit cards, debit cards, traveler&#8217;s checks, and corporate banking are the company&#8217;s four main businesses. But it must be emphasized here that American Express is not just a credit card company, it is an extremely large diversified group.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Credit_card_business\"><\/span>Credit card business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Inspired by the success of Diners Club, American Express entered the credit card market at the end of 1957 and officially launched the debit card (travel credit card) in 1958.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_fourth_largest_credit_card_company_in_the_world\"><\/span>The fourth largest credit card company in the world<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>American Express is a bank holding company and multinational financial services company specializing in payment card business. It is the fourth largest credit card network in the world, second only to China UnionPay, Visa and MasterCard.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_operating_figures\"><\/span>Key operating figures<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As of December 31, 2023, there are 141.2 million valid American Express cards worldwide, with an average annual spending of US$24,059 per cardholder. More than US$1.7 trillion in purchase volume (TPV) is processed each year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Customized_cards\"><\/span>Customized cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>American Express offers various types of cards, including travel and dining cards, daily consumption points cards and cash back cards. Each category has several card options with different benefits and reward structures. Premium cards such as the Green, Gold, and Platinum cards cater to customers who travel and dine frequently, with offers tailored to those activities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Upgraded_Credit_Cards\"><\/span>Upgraded Credit Cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In 1984, American Express introduced the Platinum Card, described as a &#8220;super exclusive&#8221; credit card with an annual fee of $250. This offer was invitation-only to American Express customers who had at least two years of membership, large purchases, and a good payment history. In 1987, American Express introduced the Optima Card, the first credit card product that did not require full payment at the end of the month. In 1999, American Express introduced the high-fee Centurion Card (often referred to as the &#8220;Black Card&#8221;) to cater to a more affluent customer base. It claims to have launched a super exclusive Black Card for elite users who can use it to buy anything.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Low_Acceptance_Outside_the_US\"><\/span>Low Acceptance Outside the U.S.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Amex credit cards are accepted by 99% of U.S. credit card merchants, but acceptance of American Express credit cards is much lower in Europe and Asia.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Boston_Fee_Party_Incident\"><\/span>Boston Fee Party Incident<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>American Express charges about 4% per transaction, while Visa and MasterCard charge about 1.2%. In 1991, some restaurants in Boston (later known as the &#8220;Boston Fee Party&#8221;), including some that only accepted American Express, complained that American Express charged too high a commission and stopped accepting American Express, but accepted and encouraged the use of Visa and MasterCard. The reason was that its fees were much lower than those of American Express at the time.<\/p>\n\n\n\n<p>This incident spread across the United States and dealt a big blow to American Express. American Express fought back by reducing the interchange fees of merchants and restaurants that only accepted American Express and not other credit or debit cards. Subsequently, American Express stopped reducing the interchange fees of merchants that exclusively accepted it and expanded its market share through targeted marketing campaigns. This triggered complaints from competitors such as Visa and MasterCard.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Costco_the_largest_customer_switches_to_Visa_cards\"><\/span>Costco, the largest customer, switches to Visa cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Costco, which has offered Costco co-branded membership cards since 2004, ended its partnership with American Express in the United States in 2016 and in Canada in 2015 and switched to Visa cards. The partnership with Costco accounted for 8% of American Express&#8217;s bill business, or $80 billion, and 20% of its interest-bearing credit business, about $14 billion. The impact of losing Costco card accounts is huge; in the first quarter without Costco cards, the company&#8217;s profits fell 10% year-on-year and revenue fell 5% year-on-year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Travelers_checks\"><\/span>Travelers&#8217; checks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Predecessors\"><\/span>Predecessors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In 1857, American Express began to expand its financial services field and launched a money order business to compete with the U.S. Postal Service&#8217;s money order business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_did_the_idea_come_about\"><\/span>How did the idea come about?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Between 1888 and 1890, J.C. Fargo, the president of American Express, went to Europe and returned frustrated and angry. Although he was the president of American Express and carried traditional letters of credit, he found it difficult to get cash anywhere except in large cities. Fargo approached Marcellus Berry and asked him to come up with a better solution than letters of credit. Berry introduced American Express Traveler&#8217;s Checks, which were issued in 1891 in denominations of $10, $20, $50, and $100.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Internationalizing_American_Express\"><\/span>Internationalizing American Express<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The invention of traveler&#8217;s checks by American Express made American Express a truly international company. During World War I, American Express in Europe was one of the few companies to recognize letters of credit (issued by various banks) held by Americans in Europe when other financial institutions refused to provide assistance to these stranded travelers. The British government even designated American Express as its official agent.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Investment_Banking_Business\"><\/span>Investment Banking Business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"First_Entering_the_Securities_Brokerage_Market\"><\/span>First Entering the Securities Brokerage Market<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In mid-1981, American Express acquired Shearson Loeb Rhoades of Sanford I. Weill, the second largest securities firm in the United States, to create American Express&#8217;s investment banking division. At the time of the acquisition, Shearson Loeb Rhoades was the second largest securities firm after Merrill Lynch.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Acquisition_of_Lehman_Brothers\"><\/span>Acquisition of Lehman Brothers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In 1984, American Express acquired Lehman Brothers and merged it into the Shearson family to form Shearson Lehman\/American Express.<\/p>\n\n\n\n<p>In 1984, Shearson\/American Express acquired Investor Diversified Services (IDS), bringing with it a group of financial advisors and investment products. In 1988, Shearson Lehman acquired brokerage firm EF Hutton &amp; Co. and merged its investment banking business. The investment banking division was renamed Shearson Lehman Hutton.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Banking_Business\"><\/span>Banking Business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>American Express is the 16th largest bank in the United States, with total assets of $270 billion, accounting for 1.1% of all assets insured by the Federal Deposit Insurance Corporation (FDIC).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Travel_Agency_Business\"><\/span>Travel Agency Business<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In 1915, American Express established a travel division and soon established its first travel agency.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Airport_lounges\"><\/span>Airport lounges<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>American Express began operating airport lounges in 2013, providing access to certain cardholders. In March 2019, American Express acquired LoungeBuddy, a provider of paid services for designated airport lounges around the world.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Competitors\"><\/span>Competitors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Credit_card_competitors\"><\/span>Credit card competitors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Including Visa, MasterCard, and Citi&#8217;s Diners Club, all of which are competitors of American Express.<\/p>\n\n\n\n<p>Once again, American Express is not just a credit card, it is very different from Visa or MasterCard; see my previous post for details: &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/07\/30\/whats-the-credit-card-difference-among-american-express-visa-and-mastercard-at-least-8-differences\/\"><\/a><a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/07\/30\/credit-card-difference\/\">What&#8217;s the credit card difference among American Express, Visa and MasterCard ? at least 8 differences<\/a>&#8220;<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"171\" height=\"90\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2025\/09\/AXP-Custom.jpg\" alt=\"American Express\" class=\"wp-image-36837\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/10\/08\/morgan-stanley\/\">Morgan Stanley, the king of investment banks<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/07\/12\/american-express\/\">American Express, one of the best investments of Buffett&#8217;s career<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/07\/30\/whats-the-credit-card-difference-among-american-express-visa-and-mastercard-at-least-8-differences\/\"><\/a><a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/07\/30\/credit-card-difference\/\">What&#8217;s the credit card difference among American Express, Visa and MasterCard ? at least 8 differences<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/17\/wells-fargo\/\">Wells Fargo, a major holding once praised by Buffett and Munger<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/11\/24\/credit-card-threats\/\" target=\"_blank\" rel=\"noreferrer noopener\">Several possible threats to the Visa and Mastercard credit card networks<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/02\/11\/the-differences-between-visa-and-mastercard\/\" target=\"_blank\" rel=\"noreferrer noopener\">The differences between Visa and Mastercard?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/04\/has-the-moat-of-the-two-major-credit-card-networks-loosened\/\" target=\"_blank\" rel=\"noreferrer noopener\">Has the moat of ubiquitous credit card networks loosened?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/12\/amazons-dominance-from-stock-price-trends-of-paypal-affirm-fair-isaac-visa-and-mastercard\/\" target=\"_blank\" rel=\"noreferrer noopener\">Amazon&#8217;s dominance from stock price trends of PayPal, Affirm, Fair Isaac, Visa, and Mastercard<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/27\/buffett-portfolio\/\" target=\"_blank\" rel=\"noreferrer noopener\">The commonalities of Buffett portfolio \u2013 cheap, fixed income, repurchase<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/17\/possibility-of-long-term\/\">Possibility of long-term holdings, Deep dive on Buffett&#8217;s case<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/02\/20\/companies-buffett-owns-20\/\">The companies Buffett owns more than 20%<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The two founders of American Express are also the founders of Wells Fargo Bank! When the company was founded, its main business was freight express. It was a freight forwarding company, which is why the word &#8220;American Express&#8221; is in the company name.<\/p>\n","protected":false},"author":1,"featured_media":36837,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1305,469,108,561,543,544,986,1003,34],"tags":[1518,655,132,1522,1519,1520,1521,1523,1517,160,140,370],"class_list":["post-36834","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-diversified-conglomerate-group","category-bank","category-credit-card","category-income-tax","category-investing-advisory","category-investment-banks","category-transportation","category-travel","category-wealth-management","tag-ameriprise-financial","tag-axp","tag-c","tag-fdc","tag-fi","tag-first-data","tag-hrb","tag-leh","tag-lehman-brothers","tag-ma","tag-v","tag-wfc"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/36834","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=36834"}],"version-history":[{"count":11,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/36834\/revisions"}],"predecessor-version":[{"id":39295,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/36834\/revisions\/39295"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/36837"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=36834"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=36834"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=36834"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}