Could American Express go Bankrupt?

November 30th, 2008 • Related • Filed Under

The answer is: yes. I have a lot of respect for American Express (NYSE AXP), while so many merchants online wish they never heard the name, I realize that American Express, if anything, has never hidden the fact that consumers are their focus and not merchants. While I don’t agree with the strategy, I can say at least I respect their stance in keeping with their focus but can this consumer-centric focus really last?

Card companies like American Express are really about one thing: moving money. But while American Express has held to a higher standard for decades, can that level of arrogance really last when merchants and consumers look for alternatives and card companies tighten their belts on extending more credit? Fact is, American Express has weathered some serious problems in the past and has come out swinging but this one may not be so easy.

If American Express wants to last, it’s going to have to start refocusing its efforts on adding new merchants in ways it never thought it had to. Part of this will mean going against its once staunch position of never negotiating rates and finally open the doors to a more savvy level of merchants who look for better deals and a higher level of respect, something American Express has always been lacking on the merchant front.

I have all the faith in the world that American Express will survive but frankly, while it continues to look for alternatives, I don’t see it happening unless American Express can finally accept the fact that it’s no longer the once mighty company that could selectively choose who it does business with and wake up to the fact that merchants now more than ever will demand better merchant rates and a higher standard of care for their merchant account.

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There Are 4 Responses So Far. »

  1. Comment by Andrew on 1 December 2008:

    Pretty scary thought. Our whole financial system needs a major overhaul.

  2. Comment by Alonzo on 22 December 2008:

    dammmmnnn Riley, are you a prophet?…cause this is looking more and more possible with each passing day!

  3. Comment by Susan on 17 January 2009:

    American Express is no longer focussed on the consumer. This is evident by the recent movement towards setting ridiculously low credit limits on long time card holders, including small businesses who used their card to pay bills yet never missed a payment. Merchants were already disgusted with them. Turning their back on consumers is the last nail in their coffin.

  4. Comment by Mark Elsevier on 29 March 2009:

    I agree with Susan, as I too have had my limit lowered, which at first seemed like a good thing as it would force me to pay off the balance and help me get out of debt. I too have always made my payments on time and usually pay more than the minimum. Then the unexpected happened. I just got off the phone with a collection agency. They stated they never received my March 2009 payment. I have a confirmation from the bank that the payment went out, and once again it was more than the minimum. My bank confirmed that the payment did go to American Express just like all the others and it did so days before it was due. Then the voice on the other end of the phone claimed that they only received a partial payment and I would have to pay the rest over the phone immediately. I told them I would send another payment from my bank. That is the problem with the phone. You never know exactly who you are talking to. For all I know it could be a scam to get your money. So be aware that this is going on and continue to do things through your bank.

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