American Express 2010 Annual Report Download - page 18

card associations, Visa and MasterCard, which
together control over 80 percent of general
purpose credit and debit volume.
The DOJ says this action will help consumers.
We think that’s just not true. In theory, the DOJ’s
approach would make it easier for merchants
to steer customers to lower-cost payment
alternatives and pass on the savings. However,
there is no evidence to suggest that this will
happen, and nothing in the suit requires it.
Here’s what would happen: more consumers
would be pressured to use cards that don’t oer
the rewards, service and benefits they prefer.
Ultimately, that limits consumer choice at the
point of sale.
Merchants choose to accept American
Express because they appreciate our overall
service and value, including more business from
higher-spending customers. And millions of
cardmembers choose to carry our cards because
they prefer our premium products and service.
It’s a matter of choice and value.
Like many legal arguments, this one could
take several years to resolve. But we are confident
that we have a very strong case.
While everyone will need to adapt to
regulatory changes sweeping the industry, we
believe long-term success in payments will
continue to depend on several factors—treating
customers well, delivering superior service,
providing value in return for a fair price, and
offering innovative solutions to address
emerging tastes and needs. I am confident that
American Express will continue to do all of these
things extremely well.
ADA P TA T ION
American Express has prospered for more than
160 years because of our ability, time and again,
to adapt our business. We’re doing it again now.
I believe our company has the best of both
worlds—our established strengths in the form of
our brand, premium customer base and unique
business capabilities, combined with our ability
to build on and transform those assets.
We know that longer-term growth won’t come
from just maintaining the status quo, so we will:
• continue to innovate within our core
businesses to deliver more value and deepen
relationships with our customers;
• develop new fee-based services that further
monetize our existing assets in information
management, customer loyalty and rewards,
and marketing services;
• pursue new opportunities in alternative
payments and digital services that can
expand the role we play in peer-to-peer and
business-to-business commerce; and
• aggressively pursue opportunities to lower
our cost base, streamline processes and
increase productivity across the organization.
We are focused on several drivers that will help
us accomplish these goals: providing greater
value to merchants; adding more women,
minorities and younger adults to our customer
base; accelerating our growth outside the U.S.;
making significant progress within Enterprise
Growth; and increasing our share of online
spending across all products, while transforming
our customers’ digital experience.
New technologies are rapidly changing the
way people interact with each other and transact
business all around the world. A fresh generation
of consumers is spending more of their lives
on cloud-based digital architecture. They are
connecting with their friends and families, joining
communities built around personal interests, and
transacting across multiple devices and operating
systems. Smartphones and tablets have made this
power portable. Against this backdrop, traditional
16
AMERICAN E XPRESS C OMPANY