American Express 2006 Annual Report Download - page 28

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Traditional card-issuing rivals have become more aggressive in offering rewards and
going after premium customers. Meanwhile, new players seeing opportunities in alternative
and online payments are also changing the competitive landscape.
In this crowded marketplace, everyone is focused on displacing cash and checks as the
payment method of choice. Making the act of paying more convenient and secure
—
both
online and offl ine
—
is critical, but that’s not all consumers and merchants want. The winners
in the payments industry will be those who create real value by providing not just a cash
substitute but a better form of currency. They will deliver meaningful rewards, savings and
access to experiences that help people enjoy their lives. They will create relevant connections
between consumers and merchants that drive commerce. They will stand behind their
customers with knowledgeable, committed service. And they will have a brand that the
public trusts and admires. In short, they will offer a relationship that treats the customer
like an individual and not a transaction. American Express is uniquely well-positioned
to do all these things.
UNIQUE ADVANTAGES
We believe American Express is best equipped to create and maintain lasting relationships
that offer real value.
Our advantage begins with the way we’re built. We are the only company with a business
model focused primarily on cardmember spending. We are the only company with scale in
all key areas of payments
—
as a card issuer, network, transaction processor and merchant
acquirer. We are the largest global card issuer by spend volume and the fourth-largest card
lender in the United States. And, unlike the vast majority of issuers and networks, we
have direct relationships with cardmembers and our merchant partners.
In addition, we have an organization and infrastructure dedicated to supporting the
spend-centric approach. Our closed-loop network gives us data that indicate how, when
and where our customers spend. Most important, we know how to read and apply the
data to benefi t both our cardmembers and our merchant partners.
For example, we can help merchants identify which types of customers are most likely
to try new products. We can help them analyze the market potential for adding a new
store. And with the marketing expertise we’ve developed over many years, we can provide
insights on the kinds of special offers and experiences that are most likely to resonate
with our high-spending cardmembers. These capabilities make American Express more
than just a payment facilitator. Instead, we are a conduit between merchants and the
customers they most want to reach.
We have the highest-spending cardmembers of any card issuer or payments network,
and we do not take them for granted. American Express is known for providing the kind
of personal attention that is increasingly rare in an era of commoditization. This past year,
service representatives around the world again demonstrated their dedication to helping
customers with everything from routine requests to extraordinary calls for assistance.
One of these representatives is featured in the opening pages of this annual report.
Sandra Lopez was part of a team based in Cancun, Mexico, who searched for cardmembers,
letter to shareholders
[ 26 ]