European Banks Leaving AmEx at Home

  American Express Co. has long used the tag line "Don't leave home without it." It appears, however, that some banks would prefer that AmEx leave their homes.
  AmEx has long pointed to its Global Network Services (GNS) partnership program with financial institutions as a symbol of its friendly intentions towards banks. Under GNS, over 90 banks in 74 countries issue AmEx cards in their domestic markets.
  But some of these relationships have fizzled, including deals with Canadian Imperial Bank of Commerce (CIBC), Capital One Financial Corp., and others, according to United Kingdom-based European Card Review.
  Some speculate these mishaps could impact the November suit that AmEx filed against Visa, MasterCard International and eight major U.S. card-issuing banks seeking monetary damages for business lost "as a result of the illegal, anti-competitive practices of the card associations."
  AmEx filed suit shortly after the U.S. Supreme Court in October let stand two lower-court decisions that Visa and MasterCard policies violated antitrust rules and locked AmEx and Discover Financial Services, issuer of the Discover card, out of the bank-issued card business in the U.S.
  The recent collapse of AmEx's co-branded Entourage program with CIBC is one of the negatives AmEx and its lawyers will have to overcome as they stake out their damages claim.
  AmEx currently has issuing partnerships with 19 European banks. But several major names have decided to discontinue deals with the travel-and-entertainment card giant.
  Capital One (U.K.), Deutsche Bank Italia, Continente (Spain), K&H Bank (Hungary), Cr?dit Lyonnais, Accor, Sovac/Peugeot and Sovac/Citroen (France) and Atlas (Slovenia) have all dropped their AmEx partnerships, according to ECR.
  Perhaps the highest-profile launch of any AmEx partnership was the NatWest-American Express card program in the U.K. in December 1996. It failed to live up to the early hype, however, and was discontinued around 2000 when Royal Bank of Scotland bought NatWest.
  With the Capital One partnership failing to work out as well, AmEx has no current partnerships in the U.K., Germany, Italy, the Netherlands and several smaller European countries.
  Charge Cards Struggle
  One reason for the failures in Europe may be the decline of charge cards. Independent card statistics for the Continent can be hard to come by, but in the U.K., charge card transactions have been flat and the value of transactions has declined since 2001, according to the Association for Payment Clearing Services (APACS), a London-based trade group for large issuers, acquirers, and processors.
  AmEx's top executives have said the bank partnership program has been a success. Asked by ECR which partnerships American Express Chairman and Chief Executive Kenneth Chenault considers most successful, an AmEx spokesperson said, "most all of them." But the spokesperson would not provide details about discontinued partnerships.
  American Express itself supplies no detailed figures, but APACS compiles statistics from American Express, Diners Club and the Japanese card issuer JCB in its coverage of non-bank charge cards; AmEx accounted for about 85% of the total.
  The value of purchases on charge cards dropped from ?10.6 billion in 2001 to ?9.9 billion in 2003, while transaction totals rose slightly, APACS found (chart).