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This statistic highlights American Express’ Assets by Business Vertical, split across GCS, GCSG and GMNS, reported on an annual basis from 2018 onwards.
|Vertical||2018||2019||2020||Contribution in 2020|
|Global Commercial Services||$51||$53||$42||29%|
|Global Consumer Services Group||$102||$106||$87||61%|
|Global Merchant and Network Services||$16||$18||$14||10%|
(All figures are in billions, except percentage)
The following is a quick summary of the company’s three reportable operational segments’ principal business activities:
GCS and GMNS activities are the most likely to meet institutional credit risk. This has resulted in lower results for all operations in 2020 when compared to prior years. Unlike individual credit risk, institutional credit risk has a lower frequency of losses but a higher severity. It is impacted by both macroeconomic factors and specific consumer occurrences.
The company’s principal income source is a transfer pricing method, which is used to divide discount revenue and some other revenues among segments. In the GCSG and GCS segments, discount revenue reflects the issuer component of total discount income generated by Card Members; in the GMNS segment, discount revenue reflects the network and acquirer component of overall discount revenue.
In the 2020 annual report, that the company had stated to focus on four strategic initiatives over the previous year: expanding its leadership in the premium consumer space, continuing to grow its commercial payments segment, improving its global integrated network, and focusing on its digital offerings. These objectives are expected to be developed further in the future by the firm. Since announcing a drop in merchant fees in March 2018, the company has hinted that it may be rethinking its business strategy in order to maintain rates low across the board in order to increase total transaction volume.
Despite its achievements, American Express is still lagging behind its major competitors, Visa and Mastercard, as of 2020. Although the company has decreased its merchant fees, they are still higher than those charged by certain other credit card providers, which might be a barrier to wider merchant acceptance. American Express, on the other hand, offers several advantages: It can provide a more streamlined, reliable service as both an issuer and a network than Visa or Mastercard, who don’t normally issue their own cards.
American Express is a worldwide payments corporation that connects people to products, information, and experiences that improve their lives and help them succeed in business. We are a global leader in offering credit and charge cards to individuals, small businesses, medium-sized organizations, and major corporations. Card Members can use American Express cards issued by American Express, as well as third-party banks and other institutions on the American Express network, to pay for products and services at the millions of businesses worldwide that accept our brand. The firm began as a joint stock partnership in 1850 and was organized as a New York corporation in 1965.
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