American Express Sticks to Long-Standing Inclusion Goals

With several of its products aimed across all demographics, American Express has no intention of turning back from what it says has been a long journey to become more inclusive as a card brand.

In the competitive payments market, Amex can't grow without inclusive programs that  complement its strong global market revenue base, said Jeff Campbell, chief financial officer of American Express.

"From our perspective, we've been on the journey to make the brand more inclusive since we first launched a credit card in the late 1950s," Campbell said during a Sept. 18 presentation at the Barclays 2015 Global Financial Services Conference.

That initial effort targeted a narrow demographic of wealthy business travelers who used a few specific airlines, upscale hotels and restaurants, Campbell said, but it allowed the company to steadily grow over the decades to encompass a wider audience and range of spending.

"Eventually, we began to talk about making the card useful at places that are about everyday spend," Campbell said.

The concept of an American Express for everyone has manifested itself in various products, including many under the aptly named American Express Everyday Card series.

But it took years before Amex found the perfect setting to make a statement about its intention to drop the "exclusive" moniker from its cards. That moment came in October of 2012 when launching the Bluebird prepaid card in Walmart, starting a trend in which 80% of card enrollees were new to American Express with half of those customers less than 35 years old.

"There were huge debates about possibly allowing an American Express card to be accepted at a partner like Walmart and there were fears that it would destroy the brand," Campbell said. But the desire for true inclusion won out, Campbell added.

Last month, American Express introduced the Serve Cash Back debit card, making it one of the first in the industry to attach cash rewards to a debit card product. Not long before the debit card cash rewards program became available to cardholders, an analyst for Nomura Holdings Inc. called out Amex as needing to bolster its rewards program spending if it wanted to stay competitive.

While Amex views the U.S. consumer rewards market as an important arena to compete in, the card brand still relies heavily on its global and corporate business card programs that stress experiences and other perks, Campbell said.  

Campbell also cited the American Express OptBlue program, in which acquirers can establish card-acceptance pricing to better compete for small merchant business, as another example of the company's desire to attract more small merchants.

"OptBlue over the next several years is about closing the last mile of small-merchant coverage gap in the U.S. vs. Visa and MasterCard," Campbell said. "Those kinds of things are the latest extension of what has been a long-playing proposition."

Amex also launched the Plenti loyalty program five months ago as a multi-merchant co-branding effort. Plenti also ties in with the Amex Membership Reward program, allowing cardholders to transfer membership rewards points to Plenti in specific increments. Plenti currently has 28 million cardholders participating.

"As we have continued to extend our demographic reach, it has in fact strengthened the brand every step along the way," Campbell said.