Volume Grows for AmEx, As Does Dependence on Acquiring

U.S. transaction volume for American Express Co. grew nearly 19% in the third quarter, to $89 billion, over the year-ago period, the New York-based travel-and-entertainment company reported. Its U.S. card base increased 10%, to 42 million, of which 31.9 million are so-called basic cards. The U.S. accounts for nearly three-quarters of AmEx's dollar volume and 61% of its cards. The company's cards issued within its Global Network Services unit, which runs the card business involving its partnerships with bank co-issuers around the world, increased to 9.9 million from 7.4 million worldwide. AmEx's third-quarter numbers indicate it is increasingly dependent on its merchant-acquiring business for revenue. Worldwide discount revenue, which grew 16% over the year-ago quarter, came to $2.95 billion, or 48.5% of total revenue, compared to 46.3% last year. The company attributes the growth to rising overall charge volume. Quarterly spending per card, counting the company's proprietary card base only, increased to $2,610 from $2,330. Still, AmEx's global discount rate continued its slow decline, averaging 2.57% in the quarter, down from 2.60% a year ago. The company, as it has done in recent quarterly reports, says the decline is the result of the company's penetration of general merchant categories beyond its traditional base in T&E.