American Express 2015 Annual Report Download - page 21

TLS competes with a variety of competitors including traditional “brick and mortar” travel agents, travel networks,
travel agencies that provide travel benefits through competitors of our proprietary card business and online travel agencies.
Plenti
During 2015, we launched Plenti®, a U.S.-based loyalty coalition, with AT&T, ExxonMobil, Macy’s, Nationwide, Rite
Aid, Direct Energy, Enterprise Rent-A-Car and Hulu. Coalition loyalty programs such as Plenti and our Payback®
program (which is operated by our Loyalty Partner subsidiary and is described in “International Card Services”) enable
consumers to earn rewards points and use them to save on purchases from a variety of participating merchants
through a multi-category rewards platform that is payment agnostic. Merchants generally fund the consumer offers
and are responsible to us for the cost of loyalty points; we earn revenue from operating the loyalty platform and by
providing marketing support.
Our ability to generate revenue will depend on our ability to differentiate ourselves through the products and
services we provide and the attractiveness of our loyalty programs to consumers. The continued attractiveness of our
loyalty programs will also depend on our ability to remain affiliated with partners that are desirable to consumers and
to offer rewards that are both attainable and attractive to consumers.
INTERNATIONAL CARD SERVICES
We offer our charge and credit cards to consumers and small businesses in numerous countries around the globe.
Our geographic scope is widespread and we focus primarily on those countries we believe offer us the greatest
financial opportunity. For a discussion of cards issued internationally through our GNS partner relationships, see
“Global Network Services.”
We continued to bolster our international proprietary card business through the launch of a number of new or
enhanced card products during 2015, including the American Express Essential™ Credit Card in Australia and the Blue
Cash®Credit Card from American Express in Hong Kong. We offer many of the same programs and services in our
international proprietary card-issuing business as we do in our U.S. proprietary issuing business. Also, as in the United
States, we issue cards internationally under distribution agreements with financial services institutions. Another
example of our distribution partnerships is affinity cards with fraternal, professional, educational and other
organizations. For instance, we have been successful in penetrating the affinity card segment in Australia, where we
issue cards with some of the largest professional associations in that country. In Australia, affinity cards are a
significant part of our consumer lending portfolio.
As in the United States, the Membership Rewards program is a strong driver of Card Member spending in the
international consumer business. Our redemption options include travel, retail merchandise, entertainment, shopping
and recreation gift certificates, experiences, financial services and donations to benefit charities. In 2015, we
continued to enhance our rewards programs. We provided more flexibility in the way Card Members can use their
rewards points by upgrading our capabilities in certain countries to allow Card Members to use rewards to pay for
eligible transactions on the Card Member’s statement as well as at the point of sale in select retail locations in store
and online. We also offer the opportunity to pay for travel services by allowing International Consumer Card Members
to use their Membership Rewards points to pay for their travel purchases and other charges in 19 countries outside the
United States.
We continue to build on our strengths and look for further opportunities to increase our presence internationally.
Through Loyalty Partner, our marketing services company, we build coalition loyalty programs, such as the Payback®
program, and offer loyalty cards good for discounts and rewards at participating coalition partners. Loyalty Partner
operates the Payback program in Germany, India, Italy, Mexico and Poland. Loyalty Partner also provides market
analysis, operating platforms and consulting services that help merchants grow their businesses. Using these services,
participating merchants are able to run targeted and tailored campaigns across various channels. Loyalty Partner has
deepened our merchant relationships in certain countries, added consumers to our international customer base and
expanded our range of rewards and loyalty marketing services. It also provides us opportunities to offer American
Express products and services to new customer segments and develop new cobrand card products, such as the
Payback cobrand card products in Germany, India, Italy and Mexico.
International Card Services — Competition
Compared with the United States, consumers outside the United States use general-purpose charge and credit cards
for a smaller percentage of their total payments, with some large emerging-market countries only just beginning to
transition to card usage in any meaningful way. Although our geographic scope is widespread, we generally do not have
significant share of spend on general-purpose charge, credit and debit cards in the countries in which we operate
internationally. Our proprietary card-issuing business is subject to competition from multinational banks, such as Banco
Santander, Citibank and HSBC, as well as many local banks and financial institutions.
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