Credit Cards

Will AMEX get acquired within the next 5-10 years?

  • Last Updated:
  • Oct 16th, 2019 4:33 pm
Tags:
None
[OP]
Deal Addict
Jan 9, 2010
2240 posts
1710 upvotes

Will AMEX get acquired within the next 5-10 years?

Looking at the thread in the Hot Deals forum to apply for the AMEX Platinum really got me thinking as to how desperate they have come if they're resorting to getting new customers on Travelzoo and perpetually giving the the supplementary Platinum card for free along with a 60K points sign-up bonus if you spend $3K within 3 months. Makes me wonder if the company will get acquired by MC and/or VISA within the next 5-10 years...

How far the company has fallen when the Platinum card used to be seen as a status symbol with a high income requirement to now having to attract customers on a travel deal site with said customers having trouble to spend just $3000 in three months.... Thoughts?
19 replies
Sr. Member
User avatar
Dec 20, 2017
672 posts
790 upvotes
No chance, Amex is doing very well. Travel & Entertainment as well as their corporate clients are their key customers. Giving away points to them is just part of the marketing game. Not all ads are successful, but they only need a few key business clients per conversion to make it worth it.

Of the three major players (Amex, Visa MC), Amex has the highest revenue at $36.986B with $6.921B net income and $188.6B in assets.

In comparison, Visa is at $20.6B revenue, $10.729B net income and $69.225B in assets.

Mastercard is at $12.497B revenue, $3.915B in net income and $21.329B in assets.

Yes, Visa is neting a higher income than Amex, but Amex also has 2.7x the assets in comparison.

As a business owner, Amex is invaluable for flexibility in granting limits multitudes higher than any other Canadian bank would issue through their business CC's. Sure, not all suppliers take Amex, but any large corporate business will accept it without issue. That's where all the major charges are made anyways.

Amex gives customer huge spending limit -> seller receives payment after net 14/30 on time. Seller is happy, customer is happy, Amex is happy taking a chunk of interchange. It's a win-win-win cycle.
Deal Expert
Aug 22, 2011
35620 posts
21677 upvotes
Center of Universe
Not in this lifetime...
Sr. Member
User avatar
May 31, 2018
684 posts
1591 upvotes
Saskatchewan
Just more marketing, not a sign of their impending demise. The more people carrying and using an Amex just adds to their bottom line, it doesn’t show desperation at all.
Deal Addict
Nov 8, 2017
1528 posts
852 upvotes
Best all around CC company out there.
Superb customer service #1, and where I live, pretty much accepted everywhere
Sr. Member
Aug 5, 2018
538 posts
751 upvotes
moofur wrote: How far the company has fallen when the Platinum card used to be seen as a status symbol with a high income requirement to now having to attract customers on a travel deal site with said customers having trouble to spend just $3000 in three months.... Thoughts?
Amex has long removed any income requirement for their credit cards.
There are several reasons for this move, but one of them was to acquire market share.

On the other hand, being able to afford $699 annual fee ($499 net after $200 travel credit), should still show some status, compared to no annual fee cards.

As for the offer you mentioned, it's fairly bad if you consider you are not earning a referral bonus of 25k MR for referrer, plus 60K MR for referee with 5k spend in 3 months.

So the offer is essentially you pay $499 to get 60k MR points, which is not hot compared to referral, (and you get the lounge benefits etc. for 1 year.)
Deal Addict
May 16, 2017
1628 posts
2056 upvotes
Delight wrote: ...

Of the three major players (Amex, Visa MC), Amex has the highest revenue at $36.986B with $6.921B net income and $188.6B in assets.

In comparison, Visa is at $20.6B revenue, $10.729B net income and $69.225B in assets.

Mastercard is at $12.497B revenue, $3.915B in net income and $21.329B in assets.

...
Besides competition rules/anti-trust law coming into a play and likely blocking a mash-up involving AMEX and either VISA or MC they are actually different types of entities.

VISA and MC do NOT issue cards or extend credit to consumers; they provide payment products, services and networks that facilitate the actual financial transaction between financial institution - merchant - retail customer. AMEX does that AND is also the issuing financial institution in most cases directly. Therefore, they have a much larger piece of the pie for each card transaction.

I could see a merger with one of the other smaller players in the financial card market.
Deal Expert
Feb 29, 2008
26705 posts
3577 upvotes
Montreal
robsaw wrote: I could see a merger with one of the other smaller players in the financial card market.
Discover gets no respect, I tell ya.
Deal Guru
User avatar
May 8, 2009
14328 posts
12122 upvotes
Going to the Moon
AmEx is growing. Now why would they sell out??
Premium Life: CDC [Icey Private Status]/SwissBorg/Netflix UHD [100% off]/Amazon [Prime 100% off]/Instacart [Express]
Deal Addict
Feb 26, 2006
3517 posts
1561 upvotes
Ottawa
titaniumtux wrote: AmEx is growing. Now why would they sell out??
Some people just need fellow rfders to crap on their head to understand things.. I mean maybe op believes in a bitcoin comeback.. I think I'm the first person I know in months to say bitcoin...

In 2017, Forbes named American Express as the 23rd most valuable brand in the world (and the highest within financial services), estimating the brand to be worth US$24.5 billion
Deal Guru
User avatar
May 8, 2009
14328 posts
12122 upvotes
Going to the Moon
shylok wrote: Some people just need fellow rfders to crap on their head to understand things.. I mean maybe op believes in a bitcoin comeback.. I think I'm the first person I know in months to say bitcoin...

In 2017, Forbes named American Express as the 23rd most valuable brand in the world (and the highest within financial services), estimating the brand to be worth US$24.5 billion
BTC already came back, and it's expected to further skyrocket.

I expect AmEx to keep growing. They may hit the occasional rough patches, but no moreso than their competitors.
Premium Life: CDC [Icey Private Status]/SwissBorg/Netflix UHD [100% off]/Amazon [Prime 100% off]/Instacart [Express]
Deal Guru
User avatar
May 8, 2009
14328 posts
12122 upvotes
Going to the Moon
jerryhung wrote: If anything, Buffett/BRK will buy out entire AMEX :P
Even if he does, he'll probably retain the operating brand & network.
Premium Life: CDC [Icey Private Status]/SwissBorg/Netflix UHD [100% off]/Amazon [Prime 100% off]/Instacart [Express]
Sr. Member
Feb 28, 2014
563 posts
672 upvotes
Ya, Amex is in no way in dire shape, I find that card acceptance now was better than back in 2015. There's still a lot of work to be done but the improvements have been noticeable. Amex is nowhere close to being in trouble, they also continue to be seen as a luxury brand as well.
Deal Addict
Oct 13, 2006
2369 posts
852 upvotes
Burnaby
Also that's a charge card, 30% annual interest on balances. Let's face it, aside from RFD'ers, Canadians carry credit card balances...albeit at 30% you have to be insanely rich, live life without care or have an illegitimate job
Deal Fanatic
User avatar
Aug 24, 2016
8208 posts
8766 upvotes
The Prairies
amplified wrote: Also that's a charge card, 30% annual interest on balances. Let's face it, aside from RFD'ers, Canadians carry credit card balances...albeit at 30% you have to be insanely rich, live life without care or have an illegitimate job
The 30% interest rate is the least of your problems with a charge card.
As a charge card that must be paid in full each month, that 30% interest rate is actually a default rate, and your credit rating is going down the crapper.
It also increases the likelihood that AMEX will cancel your card at some point.
Deal Fanatic
User avatar
Oct 13, 2002
5243 posts
1516 upvotes
Toronto
This is literally the most useless thread in the CC section right now
'11 DC MLF Iikka Pro | CCM Ribcor Trigger 3D/Bauer Supreme 1S LE
'18 Union Flite Pro Red | Bauer Supreme 2S Gloves
'08 K2 T1 | CCM Super Tacks AS1
Deal Fanatic
User avatar
Apr 24, 2017
5455 posts
3994 upvotes
Nonsense thread.
📱 Telus: $30/25GB Peace of Mind Plan + 1000 International minutes
💳 Credit card combo (2-7.5% return): AmEx + Scotiabank + CIBC + MBNA
Deal Fanatic
User avatar
Aug 24, 2016
8208 posts
8766 upvotes
The Prairies
ProfessorChaos wrote: This is literally the most useless thread in the CC section right now
I’ll nominate the Amazon Mastercard thread for the #2 spot :lol:
Deal Addict
User avatar
Nov 14, 2003
4571 posts
2840 upvotes
Gotham
The current AXP market capitalization is about $97.4B. Berkshire Hathaway owns about 18% of the shares. They could buy it entirely for around $80B if the shares didn't go up on an announcement. If they only wanted a controlling stake of 51%, it would cost at a minimum $32B. Berkshire Hathaway currently has about $120B in cash on hand so they would have lots of money left over if they tried.

American Express financial review, https://seekingalpha.com/article/429776 ... ss-company

Top