American Express has seen strong tailwinds, thanks to a healthy global economy. It's probably best known by consumers for its credit and charge cards. As such, it's almost always compared to rivals Visa and MasterCard. Unlike these two competitors, American Express is both the payment processor and issuer of its credit cards. While this could open up bigger profits if members spend more, it also exposes American Express to more significant risks if the economy turns sour.

The company has been shaped by a series of mergers and acquisitions that have resulted in some of its most successful subsidiaries. This short article outlines some of the key facts about the company as well as some of the company's most important subsidiaries that help shape it into what it is today.

Key Takeaways

  • American Express aims to enhance its services and encourage people to use its cards more frequently by making acquisitions.
  • American Express Travel Related Services is the immediate parent of both of the company's card-issuing banks.
  • American Express Bank and American Express Centurion Bank are both wholly-owned subsidiaries of American Express.
  • Accertify is a global fraud prevention company that was purchased by American Express in 2010.
  • AMEX Assurance Company acts as the insurance underwriter for travel insurance and other insurance products.

American Express: An Overview

  • Founded: 1850
  • Headquarters: New York City
  • Market Capitalization (as of Mar. 31, 2020): $69 billion

American Express (AXP) is an American financial and travel services corporation with operations in more than 130 countries. Its primary products include charge cards, credit cards, financial services, and travel-related services like traveler's checks. The company, commonly referred to as Amex, markets these products to consumers, business owners, and corporations across the globe.

Founded in 1850, the company is the world's largest payment card company by purchase volume with more than $1 trillion in total global spending billed with more than 60 million cards in circulation. The company reported net income of $6.8 billion on revenue of $43.5 billion for the 2019 fiscal year.

The company's executive team is made up of:

  • Stephen Squeri, chair and chief executive officer (CEO)
  • Jeffrey Campbell, chief financial officer (CFO)
  • Marc Gordon, executive vice president and chief information officer (CIO)
  • Mohammed Badi, chief strategy officer

Amex's Acquisition Strategy

The main strategy behind American Express acquisitions is to enhance its services for existing card members to facilitate the ease of use of its products. It also aims to encourage people to use their cards more frequently.

American Express purchased U.K. fin-tech startup Cake Technologies in March 2018 for just over $13 million. Cake provides a service allowing restaurant-goers to pay a bill more easily. American Express indicated its plans to integrate Cake technologies into its platform to provide members with an enhanced service. American Express will likely continue to acquire additional companies in order to further extend its reach as a financial services megacompany.

As a major financial services company, American Express makes frequent acquisitions of smaller businesses, many of which are integrated into its broad platform of products and services. In January 2019, American Express announced its intent to acquire Pocket Concierge, a restaurant reservation platform targeting businesses in Japan for an undisclosed amount.

American Express owns dozens of subsidiary companies, most of which are organized to carry out its business operations in foreign countries. Its most important subsidiaries include two card-issuing banks and several financial services firms based in the United States.

American Express TRS

American Express Travel Related Services Company, or TRS, is the company's principal operating subsidiary and operates in the specialty finance sector. As such, it is the immediate parent of both of the company's card-issuing banks. TRS is treated as a financial holding company, meaning that the Federal Reserve has jurisdiction to supervise and examine its practices.

While TRS contributes to American Express's business ventures in a variety of ways, the company is primarily responsible for providing personnel, facilities, systems, and other operational resources to various American Express branches and subsidiary companies. As a result, TRS is the direct or indirect owner of most of American Express's legal entities.

The primary source of revenue for TRS is American Express's discount revenue or the amount earned on transactions with merchants holding card acceptance agreements used to facilitate transactions with cardholders of American Express credit cards. TRS also earns revenue through card fees, travel commissions, and more.

American Express Bank

American Express Bank (FSB) is a federal savings bank headquartered in Salt Lake City, Utah, and is a wholly-owned subsidiary of American Express. The bank issues charge cards and credit cards for small businesses under the American Express Open brand. American Express Open cards and associated services are targeted at firms with up to $10 million in annual revenue and fewer than 100 employees.

On the consumer side, American Express Bank issues a variety of charge cards and credit cards under the American Express brand, including co-branded cards with American Express partners.

American Express Bank also offers savings accounts and certificates of deposit (CDs) to consumers across the country under the American Express Personal Savings brand. Accounts are only available online—the bank does not operate any retail locations. American Express Bank also accepts deposits through third-party brokerage partners.

American Express Bank was founded in 2000 and acquired by American Express National Bank in April 2018.

American Express Centurion Bank

American Express Centurion Bank is the second major insured depository institution for American Express. The Utah-chartered industrial bank is also headquartered in Salt Lake City.

Centurion Bank issues a variety of consumer charge cards and credit cards under the American Express brand. American Express Centurion Bank also accepts deposits through third-party brokerage partners. The bank does not operate any retail locations and is wholly owned by American Express.


Accertify is a global fraud prevention company with offices in Illinois, Mexico, the United Kingdom, and Australia. The firm offers a range of technologies and tools used to prevent online payment fraud. They're also used to manage the risk associated with card-not-present transactions. Its customers include e-commerce companies across the globe, including the likes of StubHub, Inc., JetBlue Airways (JBLU), (FLWS) and Urban Outfitters (URBN). Accertify is a subsidiary of American Express Travel Related Services Company.

Accertify's products are compatible with payment networks used to make online purchases around the world, including all major credit cards and online payment providers such as PayPal (PYPL). The company offers fraud management, chargeback management, data analysis, and payment gateway products that can be combined to provide payment solutions delivered via a hosted software-as-a-service (SaaS) platform. Accertify also offers managed service options under which e-commerce merchants can outsource the fraud management process to Accertify's staff of analysts. Founded in 2007, Accertify was purchased by American Express in 2010 for approximately $150 million and is now a wholly-owned subsidiary.

AMEX Assurance Company

AMEX Assurance Company acts as the insurance underwriter for travel insurance and other insurance products marketed and sold by American Express companies. It also underwrites certain insurance benefits provided to American Express charge card and credit card holders including car rental loss and damage protection, extended warranty protection, product purchase protection, and travel accident insurance. The company does not have any retail operations. This company was founded in 1973 as the American Automobile Insurance Company of Illinois but changed its name in 1986. Since September of 2007, it has operated as a subsidiary of American Express.