American Express was founded in 1850 by Henry Wells, William G. Fargo and John Butterfield in New York. During a period of rapid westward expansion in the United States, the company was originally established as one the first express delivery services to rival the post office. The company’s most profitable service during this time was the delivery of financial instruments for banks. This was primarily due to the high value and light weight.
American Express shifted the focus of its primary business towards the development of its own financial instruments by 1882. This began with the issuance of money orders followed by traveler checks in 1891. The company experienced great success with its new business practices generating nearly six million dollars in annual revenues within the first ten years. During a period of rapid immigration in the U.S. the U.S. Immigrant Departments contracted American Express as the official provider of currency exchanges services in 1905. By 1910 American Express had expanded its services to most large cities in Western Europe. American Expressed had also become internationally renowned for its travel services. In 1922 the company chartered the first ever cruise around the world. The card age for American express finally emerged in 1958 when the company issued its first charge card. The American Express charge card experienced immediate success and over one million were issued in the first five years. The American Express charge card throughout history has helped small business owners succeed by delivering buying power, elasticity and financial control. The company has continued to expand over the past few decades and is currently one of the largest corporations in the world.
Today American express is allocated into five primary revenue generating components. The first and most notable component is its’ U.S. card services which currently accounts for 51.41 percent of its total revenue. American Express’s global network and merchant services currently accounts for 16.79 percent of total revenue; close behind is the company’s International card and commercial global services which attributes to 15.76 percent, followed by its’ global commercial services which accounts for 14.9 percent. The remaining 1.12 percent of revenue is categorized into its’ corporate and other segment. American Express is in a field with fierce competition, rivaled by acclaimed juggernauts such as Bank of America Corporation (BAC), Capital One Financial Corporation (COF) and MasterCard Incorporated (MA). Currently American Express reigns as the global leader of the world’s card issuer by purchase volume. In a comparison of revenue growth, within the year American Express has increase by 2.61percent compared to its’ competitors 1.62 percent.