What Can High Risk Merchant Account Holders Expect From AMEX in The Future

American Express has recently talked about its quarterly results. The company is going to cut its expenses by nearly $1 billion within 2 years.

American Express’ Results

In 2015, MPD CEO Karen Webster said American Express could probably benefit by closing out everything except for Amex’s commercial card portfolio. The latter counted for fewer acceptance limitations, high transaction values, and less regulatory pressure.

In fact, the corporate card portfolio had been quite successful for the company. Today, the recent report by Amex shows the strength of the commercial card security net is arguable.

Amex’s net income has registered a 38% year-over-year decline. On the other hand, the dollar’s recent strength against foreign currencies hasn’t been beneficial to the company. Currently, American Express’ product portfolio doesn’t appear to be as resilient as it was.

All the factors, including foreign exchange unpredictability, regulatory effects, and the urge for innovation and new payments technologies, play an important role in this regard.

Corporate Card Segment

Ken Chenault, CEO at American Express, mentions that the corporate segment has recently been the most disappointing. T&E has proved to be the most easily reducible category from the aspect of expenses. In fact, T&E cutbacks indicate abatement.

Over the years, Amex’s Global Commercial Services unit witnessed a 3% decrease in card billing in Q4 2015, thus counting for $45.5 billion.

In 2015, net income for the unit accounted for $666 million. In 2014, it was $1.5 billion. From 2014 to 2015, the revenue net of interest dropped 32% to $3.5 billion.

Global Commercial Services had a net income of $132 million for Q4, which is 78% down from the previous year’s same period. It should be mentioned that Amex’s 2014 statistics included profits gained after its investment in T&E firm Concur.

Concerning 2015 earnings, Campbell said they had also reduced their fuel and travel costs.

What To Expect

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American Express has recently introduced new features for its corporate card products. Also, the company will support Apple Pay for commercial cards to new markets, such as the Canadian market and the Australia one. The European and Asian markets are going to be included this year.

This year, Amex’ commercial card accounts have been supplemented by Apple Touch ID capabilities, and a new small business card product called “SimplyCash Plus Business Credit Card” has been launched. The latter enables SME owners to use the card even when their credit limit is over. Time will show what to expect.

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