Amex CEO's Statement on Cash

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Scoobynoodles
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Amex CEO's Statement on Cash

Postby Scoobynoodles » Tue Jun 18, 2013 11:01 am

I know we spoke about this in several other threads, but thought it was worth mentioning. During college, we read annual reports, 10-Ks/10-Qs quite regularly and always looked for language from the CEO on their respective business and future outlook on the economy and industry they serve. I was reading up on Amex's AR just now and found an interesting quote from Amex's Chairman/CEO regarding the future of Amex as it looks to capitalize on future growth.

"There’s also tremendous opportunity ahead of us, measured in trillions of dollars of untapped commerce potential across consumer, small business and commercial payments. We are ready to capture a significant share of this spending as it migrates away from cash. We’re also intent on building out a broader range of services that create more value for merchants and cardmembers." - Kenneth Chenault - CEO & Chairman of American Express, February 2013.

Haven't figured out how to upload an image, but you can go to their site and pull up the 2012 AR, page 14.

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I just thought how he plainly puts that as consumers continue to pull away from cash, Amex will be there to capitalize on it. If you read his full report, it is interesting to see how Amex is really moving to acquire new members (new markets through BlueBird, Serve, and Loyalty Partner - all bringing in new and younger customers!) while - for the most part - bringing in exceptional service to its regular charge and credit card holders.

But his point on cash really jumped out at me, in that more people today are moving away from cash and embracing plastic, even in regions where paying with plastic is unheard of (it would be foolish to think everywhere in the world accepts plastic) it is slowly turning around. And I think as us cardmembers, we are sometimes taken aback when a merchant does not take Amex, let alone plastic.

I just wanted to point this out and how profound this statement is coming from the CEO of a major financial institution. Whether this will be all good for the markets in the long-run I don't know but it is something to consider.
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MemberSince99
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Postby MemberSince99 » Tue Jun 18, 2013 1:24 pm

I'm not sure these guys actually say anything truly profound. I mean if they came right out and said something like we have nothing to lose because we are too big to fail in the eyes of the government so we can gamble and hope for the best and if the worst happens you get to cover the bills chumps, heads I win tails you lose, and I'll escape with my golden parachute to a tropical paradise to live out my days when if the little guy held up a liquor store for 50 bucks he'd do hard time. Now THAT would be profound.

But to mouth PC buzzwords and talk about all the great opportunties they have, I mean what do you expect them to say? No CEO stands up and says anything but how bright the future is - they tell the same thing to the chumps working for them they plan to downsize and send their jobs overseas for cheap labor as well - they have a "bright" future with the company and hard work will be recognized and rewarded.

I didn't see anything that struck me as truly ground breaking. That's their industry. Naturally they are going to push their products. The industry I work in does the same, and when the CEO tells the investors how they are doing that, well what do you expect?

I was working for one of the telecom companies in 2001 when the CEO stood up in front of us and boldly proclaimed how the company stock, then in the 20s, could be expected to shoot to 90 dollars a share in the near future. He offered no nuggets of wisdom about how specifically that could be expected to occur, just proclaimations about the "bright future" ahead of us. I later read that at the same time he's telling us that, he's personally dumping millions of dollars in company stock (public record). Soon after this, most of us were downsized and the company stock ended up at a dollar a share before rebounding all the way to 5 dollars a share, when the company or what was left of it was sold for pennies on the dollar. He got his golden payday and the rest of us watched our retirement and our jobs go up in smoke, so much for the bright shiny future, though it was certainly a nice payday for him.

MemberSince99
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Postby MemberSince99 » Tue Jun 18, 2013 1:34 pm

And as a kind of amusing note, the same CEO also told us how we needed to do more with less. Someone had the guts to point out to him that at some point, you simply run out of the ability to do any more with less so what happens then? And Mr CEO got visibly upset at anyone daring to ask him something like that, and shot back something like "Well what do you want me to tell you, do less with more?", apparenlty the most useful thing he could come up with, while probably making a mental note to put the guy asking the question on the top of the downsizing list.

rockyrock
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Postby rockyrock » Wed Jun 19, 2013 1:25 am

Scoobynoodles wrote:I
"There’s also tremendous opportunity ahead of us, measured in trillions of dollars of untapped commerce potential across consumer, small business and commercial payments. We are ready to capture a significant share of this spending as it migrates away from cash. We’re also intent on building out a broader range of services that create more value for merchants and cardmembers." - Kenneth Chenault - CEO & Chairman of American Express, February 2013.



It will be interesting to see how aggressive Amex gets in this quest. I believe one of the reasons Amex is such a good company is that it is not a behemoth like others. Smaller is always easier to manage. Hopefully they don't grow to fast as it is almost impossible to keep a good support infrastructure while growing.

Thanks for posting, Scooby.
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tigerhunt2011
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Postby tigerhunt2011 » Mon Jul 01, 2013 12:31 pm

AMEN. When do you get rewarded for using cash? Never! Checks? Never! Amex should partner with Square and send everyone in the country a Square reader. The first girl scout to carry a Square reader will be a millionaire...
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MemberSince99
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Postby MemberSince99 » Mon Jul 01, 2013 12:34 pm

tigerhunt2011 wrote:AMEN. When do you get rewarded for using cash? Never! Checks? Never! Amex should partner with Square and send everyone in the country a Square reader. The first girl scout to carry a Square reader will be a millionaire...


That's a great idea. I think you're right.

By the way I get your name confused with tigerinroc at first glance :) Have to remind myself we have two tigers on this board!

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Postby Shilo » Tue Nov 12, 2013 6:37 pm

I've been thinking a lot about this subject. I thought why would Amex open Bluebird and Serve... We as credit card holders could care less / HOWEVER I thought again and after doing some research I discovered it has a lot to do with people buying reload-able gift cards from their credit cards, getting the points for the purchase, then cashing the gift cards in for cash and then paying their regular bills. Manufactured reward spending. It use to be people would Amex checks to get points then cash the checks and do this month after month. So I am wondering if this will happen with Serve ...Will people use serve to pay bills to credited points from their charge cards? Not sure...but whatever is going on and with Bitcoin going through the roof Amex is jumping ahead of the game to quickly develop its new foundation for unexpanded territories of revenue -



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