AMERICAN EXPRESS CO

We compete in the global payments industry with networks, issuers, acquirers and other payment service providers and methods of payment, including paper-based transactions (e.g., cash and checks) and electronic transfers (e.g., wire transfers and Automated Clearing House (ACH)), as well as evolving and growing alternative mechanisms, systems and products that leverage new technologies, business models and customer relationships to create payment, financing or banking solutions. The payments industry continues to undergo changes in response to evolving technologies, business dynamics and competition for premium customers.

As a card issuer, we compete with financial institutions that issue general-purpose credit and debit cards, as well as businesses that issue private label cards, operate mobile wallets, provide payment services or extend credit. We face intense competition in the premium space and for cobrand relationships, as both card issuer and network competitors have targeted high-spending customers and key business partners with attractive value propositions. For example, there is heightened competition with respect to several aspects of our Card Member value propositions, such as in partnerships and other differentiated offerings (e.g., lounge space in U.S. and global hub airports, dining experiences and other experiential offerings). Our banking products also face strong competition, such as with respect to the rates offered on deposits.

Our global card network competes in the global payments industry with other card networks, including, among others, Visa, China UnionPay, Mastercard, JCB, Discover and Diners Club International (the last two of which are owned by Capital One). We are the fourth largest general-purpose card network globally based on purchase volume, behind Visa, China UnionPay and Mastercard. In addition to such networks, we compete against a range of companies globally, including merchant acquirers, processors, payment facilitators and web- and mobile-based payment platforms (e.g., Alipay, PayPal and Shop Pay), as well as regional payment networks (such as the National Payments Corporation of India).

The principal competitive factors that affect card-issuing, merchant and network businesses include:

•The features, value and quality of the products and services, including customer care, rewards programs and offers, partnerships, travel-, lifestyle- and business-related benefits (including lounges, dining and other entertainment, as well as business tools), banking services and digital and mobile services, as well as the costs associated with providing such features and services

•Reputation and brand recognition

•The number, spending characteristics and credit performance of customers

•The quantity, diversity and quality of the establishments where the cards can be used

•The attractiveness of the value proposition to cardholders, corporate clients, merchants, merchant acquirers, card issuers and processors, payment facilitators and other payment intermediaries (including the relative cost and ease of using or accepting the products and services, and capabilities such as fraud prevention and data analytics)

•The number, quality and cost of other cards and other forms of payment and financing available to customers, as well as the integration and connectivity of those products

•The security of cardholder, merchant and network partner information

•The success of marketing and promotional campaigns

•The speed of innovation and investment in systems, technologies and product and service offerings

•The nature and quality of expense management tools, electronic payment methods and data capture and reporting capabilities, particularly for business customers

Another aspect of competition is the dynamic and rapid growth of alternative payment and financing mechanisms, systems and products, which include payment facilitators and processors, digital payment, open banking and electronic wallet platforms, point-of-sale lenders and buy now, pay later products, real-time settlement and processing systems, financial technology companies, digital currencies developed by both the private sector and central banks, tokenization, blockchain and similar distributed ledger technologies, prepaid systems and gift cards, and systems linked to customer accounts or that provide payment solutions. The development of agentic commerce solutions, in which autonomous or semi-autonomous AI agents initiate and execute transactions on behalf of users, has accelerated as generative AI technologies have advanced and become more popular. In addition, the use of stablecoins, which can be used for payments in a number of settings, including in e-commerce and cross-border and B2B payments, has grown. The integration of these and other new or evolving technologies has the potential to create new or better competitor products, alter the competitive environment and reshape customer payment experiences, including in ways that disintermediate our relationship with customers. Furthermore, the business models and cost structures of competitors in these areas may differ from ours, such as those of certain financial technology companies, which can provide them with a number of advantages, including differing revenue streams, lower costs, greater scale or ability to pursue and adopt new technologies and less stringent regulatory requirements, and may enable them to disintermediate us from our customers. Additionally, various competitors are integrating more financial services into their product offerings and seeking to attain the benefits of an integrated payments platform, such as ours.

In addition to the discussion in this section, see “Our operating results may materially suffer because of substantial and increasingly intense competition worldwide in the payments industry” under “Risk Factors” for further discussion of the potential impact of competition on our business, and “Our business is subject to evolving and comprehensive government regulation and supervision, which could materially adversely affect our results of operations and financial condition” and “Legal proceedings regarding provisions in our merchant contracts, including non-discrimination and honor-all-cards provisions, could have a material adverse effect on our business and result in additional litigation and/or arbitrations, changes to our merchant agreements and/or business practices, substantial monetary damages and damage to our reputation and brand” under “Risk Factors” for a discussion of the potential impact on our ability to compete effectively due to government regulations or if ongoing legal proceedings limit our ability to prevent merchants from engaging in various actions that discriminate against our card products.