Thursday, October 23, 2008

American Express -- An American Success Story

The American Express company is now 155 years old and going strong. The global financial services powerhouse is one of this nation's most recognizable brands around the world, in the same league as Coca-Cola and Disney. And, it is the power of this brand that has sustained the company through some difficult times.

American Express started out in 1850 as a freight and valuables delivery service for the rapidly expanding nation. The fledgling U.S. Postal service was quite unreliable at the time and only allowed shipment of letter-sized envelopes. This provided a business opening for the company to ship larger parcels and valuable items such as jewelry, cash, stock certificates and other merchandise. American Express began to realize more profit from a sector of their customer base which included banks and other financial institutions. Banks placed a high value on American Express' secure and reliable delivery service for inter bank transfers and drafts made between eastern cities and the growing western territories. American Express then began focusing their efforts on this sector and used their connections to eventually enter the financial services arena.

In the late 1890's, American Express decided to compete with the very banks they serviced by issuing money orders. This line of business took off rapidly and allowed the company to expand into Europe, where the American Express brand name became associated with security, capital and dependability. Soon thereafter, the company had major offices in London, Paris, Antwerp, Zurich and Berlin.

A major world event, the beginning of World War I, forced American Express into the travel services businesses. Over 150,000 Americans were stranded in Europe in 1914 at the outbreak of the Great War. These citizens flocked to the offices of American Express seeking funds after other European banks refused to honor their American letters of credit. American Express honored these letters of credit in full, which allowed American citizens to fund their passage back home.

In 1922, American Express jumped headlong into the travel services business by providing luxury steamship travel around the world, along with most other related services for passengers. And the traveler's check business meshed well with this well-heeled crowd of luxury globe hoppers. The travelers check business fueled the growth of the company over the next several decades based on the upfront fees and wise investment of the float income involved.

In the 1950's, American Express issued their first credit card, which caught on quickly in the booming post-war economy. In 1966, the company issued their first Gold Card, in an effort to cater to the upper echelon of business travel. Further product differentiation was achieved in the 1990's with the first Platinum Card.

American Express continues to be a powerful global brand through the present day with an incredible array of consumer products ranging from the Blue Card to the ultra exclusive Black Card (which isn't even advertised to the public, but is only issued by invitation only to the wealthy and famous). If you would like to review the products offered by this brand icon, please visit our American Express section.

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