American Express 2015 Annual Report Download - page 23

and interfaces with a client’s enterprise resource planning, procurement and accounts payable systems. vPayment
can be used as the form of payment throughout the stages of a typical procure-to-pay process.
Buyer Initiated Payments (“BIP”) allows companies to pay merchants electronically, which gives them more
control over their payments, extends their own days payable outstanding (or “float”) and increases their cash on hand.
Examples of BIP purchases by our clients include hospital equipment, industrial supplies, and construction and
building materials. This solution is best suited for mid- to large-sized companies that want to convert from paper to
electronic payments and optimize cash flow. BIP is currently available to companies in Australia, Canada, France,
Germany, Mexico, the Netherlands, Spain, the United Kingdom and the United States.
Global Commercial Services — Competition
The corporate payments sector is dynamic and highly competitive, with much overlap between corporate and
consumer payment cards and services and competition increasingly intense at both the payment provider and
network levels. We are seeing increased product and price competition from payment providers, including larger
regional and national banks. Customers are increasingly seeking payment products that integrate with their expense
management tools and support electronic payment methods. With respect to competition at the network level, both
Visa and MasterCard continue to support card issuers such as Citibank, JPMorgan Chase and U.S. Bank, including by
improving data collection and reporting to meet customers’ requirements. In addition to product and price
competition, other key competitive factors in the corporate payments business include global servicing capability,
merchant coverage, quality of data, and access to additional services, such as reporting and program management
tools, and customer experience.
Global Commercial Services — Regulation
The GCS business, which engages in the extension of commercial credit, is subject to more limited regulation than
our consumer lending business. In the United States, we are subject to certain of the federal and state laws applicable
to our consumer lending business, including the Equal Credit Opportunity Act, the FCRA (as amended by the FACT
Act), as well as laws that generally prohibit engaging in unfair or deceptive acts or business practices. We are also
subject to certain state laws that regulate fees and charges on our products. In the United States, we are subject to
certain applicable privacy, data protection and information security laws, including certain requirements related to
breach notification. Such laws also govern the collection, use, sharing and safeguarding of personal information. Other
countries in which we operate also have certain applicable privacy, data protection and information security laws, in
some cases more stringent than the requirements in the United States. We are also subject to bankruptcy and debtor
relief laws that can affect our ability to collect amounts owed to us. As discussed above, along with the rest of our
business, we are subject to certain provisions of the Bank Secrecy Act as amended by the Patriot Act, with regard to
maintaining effective AML programs. For a discussion of this legislation and its effect on our business, see
“Supervision and Regulation.” In some countries, regulation of card practices and consumer protection legislation may
apply to some corporate payments relationships.
GLOBAL NETWORK & MERCHANT SERVICES
The GNMS segment operates a global payments network that processes and settles proprietary and non-
proprietary card transactions. GNMS acquires merchants, provides financing products for qualified merchants and
leverages our closed-loop network to offer multi-channel marketing programs and capabilities, services, and reporting
and analytical data to our merchants around the world. It also enters into partnership agreements with third-party card
issuers and acquirers to license the American Express brand and broaden the Card Member and merchant base for
our network worldwide.
Our GNS business establishes and maintains relationships with banks and other institutions around the world that
issue cards and, in certain countries, acquire local merchants on the American Express network. Cards bearing our
logo are accepted at all merchant locations worldwide that accept American Express-branded cards and, depending
on the product, are generally accepted at ATM locations worldwide that accept our cards.
Our Global Merchant Services (“GMS”) business provides us with access to transaction and merchant data
through our closed-loop network, which encompasses relationships with Card Members, merchants and merchant
acquirers and processors. This capability helps us acquire new merchants, deepen relationships with existing
merchants, process transactions, underwrite risk, reduce fraud and provide targeted marketing, analytics and other
value-added services to merchants on our network. In addition, it allows us to analyze trends and spending patterns
among various segments of our customer base.
Global Network Services
GNS focuses on partnering with select third-party banks and other institutions to issue cards and, in some
countries, act as merchant acquirers on the American Express network. By leveraging our global infrastructure and
the appeal of the American Express brand, we broaden our Card Member and merchant bases for our network
worldwide. This strategy also enables us to enhance our presence in countries where we already do business and
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