American Express Co. is starting to look more like a bank card association.

The company's three-year-old strategy of offering banks a chance to distribute its cards is beginning to gel-at least outside the United States, where Visa and MasterCard do not prohibit members from entering marketing alliances with competing brands. So far, 42 financial institutions in 51 foreign countries have aligned themselves with Amex.

American Express is also acting like its association competitors in zsponsoring annual meetings, which it calls summits, for its bank "partners."

So far, no U.S. bank has heeded the "sales call and invitation" that American Express chairman and chief executive officer Harvey Golub issued in May 1996. At that time, at the annual Faulkner & Gray credit card forum, he said that "only Visa's restrictive bylaw stands between (U.S.) banks and their ability to choose" an alternative card brand.

The response from non-U.S. banks has been so encouraging that American Express officials are boastful.

"Worldwide, we issue cards in substantially more markets than our nearest competitor, Citibank," said James M. Cracchiolo, president of Travel Related Services International, which includes cards and the travel business. "We have targets to grow our market share around the world."

Specifically, American Express aims to have "50% of our revenues and earnings come from outside" the United States, Mr. Cracchiolo said in an interview. He would not specify the time frame.

Right now 70% of Travel Related Services' profits are generated in the United States-a share that has held steady for several years. In turn, most of American Express Co.'s overall profits come from the Travel Related Services unit, which includes cards, travelers checks, and the travel services business.

American Express has a relatively small piece of the global plastic pie, controlling 14% of all card spending worldwide compared with Visa's 54% and MasterCard's 28%, according to the Nilson Report, an Oxnard, Calif.-based industry newsletter.

The results to date of alliances with foreign banks have shown company officials-and some outside observers-that there is great potential in the partnership strategy.

"The single most exciting story for American Express is the international credit card," said PaineWebber analyst Gary Gordon.

The number of cards American Express issues outside the United States has grown from 12.3 million in 1996 to 14.9 million today. The international side now makes up 35% of Amex's total cards in force, versus 30% before the partnership strategy was begun.

"International business is going to be critical," and "the potential is strong," said David Robertson, president of the Nilson Report. He predicted that "1999 will be the year in which these new partnerships bear fruit."

American Express' assumption seems to be that partnerships with foreign banks could spill over into the U.S. market. Much may hinge on the outcome of the Justice Department's antitrust case against Visa and MasterCard, which is scheduled for trial a year from now. Among the government's accusations is that the rules preventing Visa and MasterCard issuers from offering other brands are illegal.

As Amex continues to solicit foreign banks, it is also seeking other ways to increase its global market share. The New York-based card giant sees some of its growth coming from cross-sales: more card customers will be offered annuities, insurance policies, and savings products, and vice versa.

American Express Bank, which operates outside the United States and primarily serves the corporate market, will play a key role in this strategy, Mr. Cracchiolo said. The subsidiary, which operates in 38 countries, has suffered from poor profitability, but giving it a stronger consumer focus could lift its prospects.

Cross-selling is under way in Singapore, Taiwan, Hong Kong, and parts of Europe, Mr. Cracchiolo said. So far, Amex has been able to sign up 14% of its card customers in those countries for other financial products. Conversely, 80% of its customers of noncard products have come from within its cardholder base.

"We are seeking to take our strategy and the results we've achieved to the next level," said Mr. Cracchiolo at a presentation to investment analysts last week. He said Amex intends to "bring in millions of new customers through aggressive acquisition," to target "aspiring affluent customers," and to "gain a greater share of our customers' wallet."

Mr. Cracchiolo said his company wants to add banks to its network "selectively. We will pursue relationships with strong banking institutions that have the most attractive customers."

American Express' goal of working exclusively with the top 300 banks around the world differentiates it from Visa and MasterCard, which have some 12,000 member banks worldwide.

Mr. Cracchiolo said the American Express network is "larger than the next three proprietary networks combined: JCB, Diners Club, and Discover."

In 1998 alone, American Express launched 32 new products overseas: 17 charge cards, 11 credit cards, and 4 corporate cards. Its partner banks brought forth 17 Amex cards in 1998. Mr. Cracchiolo said the company can now introduce products in half the time it took in 1997.

Spending on American Express cards was flat in 1998 compared with 1997, the result, the company said, of turbulence in the Asian financial markets. But charge volume on the cards issued by Amex's partners was up 30% in 1998 over 1997. Amex would not disclose the actual dollar figure of the latter.

Mr. Cracchiolo, 40, has presided over the most intensive sales campaign American Express has ever aimed at banks. After leading Amex's bank partnership strategy for a year, he started his current job in May 1998, succeeding Thomas O. Ryder.

Mr. Cracchiolo joined Amex in 1982, and has held several senior positions. Most notably he played a key role in the reengineering of core business processes in 1996.

As part of the sales pitch, being made both inside and outside the U.S., American Express says banks will make more money issuing its cards than Visa and MasterCard products. The primary reason is that Amex charges merchants a higher fee.

Another bonus for banks that do issue American Express cards is the tidy profit platinum cards generate. On average, the annual fee on a platinum card abroad is $700, versus $300 in the U.S.

In October, executives from the 42 banks that are issuing Amex cards gathered in Vienna, Austria, for three days. Mr. Golub, the chairman, attended the meeting, as did Kenneth I. Chenault, president and chief operating officer.

Trotting out the top brass "shows their commitment to the strategy," said Fabio Garcia, assistant vice president in charge of credit cards at Banco Popular in Puerto Rico.

At the meeting, Mr. Garcia and other bankers heard Amex officials discuss their strategy for building their network and enhancing the marketing and technology Amex offers the partnerships.

Mr. Garcia's boss, Larry B. Kessler, executive vice president of consumer lending for Banco Popular, attended American Express' 1997 meeting in New York-even though he also sits on MasterCard's Latin America/Caribbean board.

The American Express meetings "are meant to spread a feeling that there is something growing with regard to banks doing business with Amex," Mr. Kessler said.

He acknowledged that this is a sensitive issue for banks, and noted that Banco Popular, the largest credit card issuer in Puerto Rico, has "no intention of slowing down" its Visa and MasterCard business. Like many of the partner banks, Banco Popular primarily sells the Amex products to affluent consumers in its region.

Mr. Kessler said the Amex partnership has been very successful. In a short time, Banco Popular opened 30,000 new Amex accounts "when we were only expecting 10,000," he said. Banco Popular's Visa and MasterCard portfolio totals 380,000 accounts.

To gain global market share, American Express is looking to markets far larger than Puerto Rico. In his presentation to analysts, Mr. Cracchiolo said Amex would focus on the "top seven revolve markets," which he did not identify.

American Express wants to generate between $5 and $8 billion in credit card loans overseas in the next several years, Mr. Cracchiolo said. In 1998, the figure was $1.6 billion.

"We wish we could do more in the United States," Mr. Cracchiolo said. "But we are having good results around the world."

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