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A confident Kenneth I. Chenault appeared before 7,000 payments and financial-services executives on Tuesday to talk about what he touted as American Express Co.’s recent record of success in digital payments. While he runs a 164-year-old company with roots in plastic cards and travelers’ checks, Chenault conceded nothing to his rivals, whether startups or established players.
“I like competition; I like winning even more,” he cracked near the start of a question-and-answer session on stage at the Money20/20 trade show in Las Vegas.
Questioned by a TV business journalist about a broad range of recent initiatives, Chenault stressed his goal during his 13 years as AmEx’s chief executive has been to broaden the gilt-edged company’s reach beyond its traditional carriage trade to the general population, including the underbanked. “We’re not moving away from the affluent customer,” he said. “We’re becoming more inclusive.” AmEx also is known for providing corporate travel services, including marketing its cards for travel-and-entertainment purposes.
A big part of that plan has been moves such as AmEx’s decision to support Apple Inc.’s new Apple Pay mobile wallet, its Bluebird prepaid account and Serve wallet, and its effort to sign up more small businesses.
AmEx talked to Apple for months before deciding to be part of the computer giant’s wallet, but once the time came to make a decision, the company came to a quick conclusion. “It didn’t take long,” Chenault said. “They were very thoughtful and diligent in how they approach payments. It wasn’t a hard call.”
As an example of Apple’s thoughtfulness about payments, Chenault said its willingness to work with existing payments rails impressed him. “I think it’s smart that Apple has built on the existing infrastructure,” he said. “They are clear on what their core mission is.” Apple Pay works with the Visa Inc. and MasterCard Inc. networks along with AmEx, and may add more networks later.
As for Bluebird and Serve, both of which AmEx launched within the past three years, Chenault touted the new business the digital platforms have yielded. Some 90% of the customers who have signed up for the two services are new to the company, he said, adding that they enlisted some 2.6 million accounts in the first six months of the year.
As for the merchant side of the business, Chenault pronounced himself “very pleased with the early results” of OptBlue, AmEx’s 10-month-old acquiring program that allows third parties to sign up small businesses while retaining more control over the account. “We think the program is off to a very good start,” Chenault added, without giving specifics.
Nor was Chenault fazed by the loss of a top executive to PayPal. In September, Dan Schulman, who had been running AmEx’s digital-payments initiatives, left to become president of PayPal Inc. While the loss of Schulman, widely seen in the payments industry as a highly effective and imaginative executive, was seen by observers as a blow to AmEx’s plans, Chenault said it had far less impact than anyone may have thought.
“Dan got a good opportunity at PayPal, but the reality is we haven’t missed a beat,” he said. “We knew exactly who we would put in that position.” On Sept. 30, AmEx announced it had appointed Neal Sample president of enterprise growth, replacing Schulman. Sample joined AmEx in 2012 from eBay Inc., which plans to spin off PayPal next year.
