I began with some basic research and found the company was founded as an express mail business in 1850 by Henry Wells and William Fargo, the founders of Wells Fargo bank that was incorporated in 1854. As a non-American, I was aware of the Wells Fargo brand but didn't really know much about the bank apart from the fact that it was a pretty big deal. I think of DHL Express and TNT Express as logistics business and Amex as purely a financial business.
Interestingly, the financial services arm began in 1882 with the introduction of the travelers cheque after dissatisfaction with the traditional letter of credit created difficulty in obtaining local currency for international travelers. American Express entered the charge card business in 1958 following the success of Diners Club and then entered the credit card business in 1987.
What I am tending to find is Amex isn't the first company to enter a business, but when it does, the business becomes a serious competitor. Amex still hasn't conquered the Visa and Mastercard market share yet, but I'm guessing they will build market share at the expense of these two credit card providers.
A business like Diner's Club suffers an identity crisis based on its history as a restaurant charge card, patrons wrongly associate the card with purely a restaurant charge card competing against Visa and Mastercard credit cards and the Amex charge card.
As a competing charge card, American Express displays better advertising, a name now associated with finance and a strong branding. American Express does not suffer from such an identity crisis despite its logistics history and name.
In Australia, the American Express isn't as readily accepted as one might think due to the excessive fees for vendors charged by the company. Plenty of times I have been told I will be charged an extra fee for Amex, around the 2% mark but if I use Visa or Mastercard - the transaction interchange fee is lower and usually won't be passed on to consumers.
American Express charges an annual fee to issue the card, this can be very high as opposed to competing cards, then comes the merchant fees - the benefits to consumers better be pretty good to justify such costs to the consumer.
If Amex was to lower fees to build both market share among consumers and gain stronger acceptance with vendors, I am guessing they will soon displace Mastercard and seriously challenge Visa as the dominant credit card.
As a competing charge card, American Express displays better advertising, a name now associated with finance and a strong branding. American Express does not suffer from such an identity crisis despite its logistics history and name.
In Australia, the American Express isn't as readily accepted as one might think due to the excessive fees for vendors charged by the company. Plenty of times I have been told I will be charged an extra fee for Amex, around the 2% mark but if I use Visa or Mastercard - the transaction interchange fee is lower and usually won't be passed on to consumers.
American Express charges an annual fee to issue the card, this can be very high as opposed to competing cards, then comes the merchant fees - the benefits to consumers better be pretty good to justify such costs to the consumer.
If Amex was to lower fees to build both market share among consumers and gain stronger acceptance with vendors, I am guessing they will soon displace Mastercard and seriously challenge Visa as the dominant credit card.
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