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American Express Co. reported $182.5 billion in U.S. card-billed business in the fourth quarter, up 7.9% from $169.1 billion a year earlier, and discount-fee revenues increased 1.8% to $4.99 billion from $4.90 billion.
The average worldwide discount rate, however, decreased three basis points to 2.45% of the sale.
American Express attributed the decrease in the discount rate to two factors: a push into merchant categories that typically have lower rates, and a modest, but growing, impact from its OptBlue merchant-acquiring program. “We continue to believe that OptBlue will bring incremental volumes on to our network over the next several years and provide attractive economies for our business,” said Jeffrey Campbell, executive vice president and chief financial officer, in a conference call Wednesday with analysts.
He said that AmEx is pleased with OptBlue’s progress and how merchant acquirers have accepted the program. As a multiyear effort, OptBlue is “proceeding really nicely and we are right on track to make very significant strides in merchant coverage over the next couple years,” Campbell said. Doing so, however, requires not only expanding coverage but increasing awareness among cardholders, he says.
Still, not all the news at AmEx was good. The company said separately that it is eliminating 4,000 jobs and will take a $313 million restructuring charge.
In its fourth-quarter results, Discover Financial Services reported that its Pulse debit network processed 1.09 billion transactions in the fourth quarter, up 4.8% from 1.04 billion a year earlier, and Pulse’s dollar volume increased 3.5% to $41.79 billion. Total transactions on Discover\'s credit and debit networks grew 2.5% to 1.61 billion and dollar volume increased 3.2% to $83.0 billion.
When asked by analysts during a conference call, Discover executives declined to talk about the status of a lawsuit Pulse filed in November against Visa over allegations involving debit card practices.
