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American Express

American Express – Offering Payment Card Services Since 1878.

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American Express (Amex) is a popular company offering payment card services. One thing that has stayed constant throughout the company’s evolution from logistics operations to travel to cards to cutting-edge digital products and services: is its steadfast dedication to gaining its clients’ long-term loyalty.

About The Company

Founded in 1850, American Express is a reputed American multinational company headquartered in New York City, USA. The company is part of the 30 prominent companies listed in the Dow Jones Index. Its logo, which was adopted in 1958, is a gladiator which can be found on its popular products like credit cards, charge cards, and traveler’s cheques. In 2016, 22.9% of all credit card payments in the United States were made using credit cards connected to the American Express network. As of 2019, the corporation had 114.4 million active cards worldwide. IN 2020, the company was ranked 28th in the Forbes list of the World’s Most Valuable Brands. It was ranked 8th by the Fortune 100 Best Companies to Work For in 2022.

American Express
Image source: gobankingrates.com

History Of The Company

American Express was founded in 1850 by the merger of three companies. Initially, the company’s main line of business involved the delivery of goods, packages, and valuables. It started selling financial solutions to its customers in 1878. It developed a business-to-business service with agents purchasing goods for their customers at competitive prices.

The company introduced Travelers Cheque in 1891, making it easier for travelers to feel secure with their cash. When World War I broke out in 1914, the corporation used its contacts abroad to assist more than 150,000 stranded Americans. They assisted clients with cashing their Travelers Cheques and setting for secure transportation home. Amex launched its first credit card, the Charge Card, in 1958, giving clients greater flexibility than Travelers Cheques and contributing to the development of credit cards in the financial industry. The business also began selling its Corporate Card, a credit card, to business clients in 1966.

Although the company’s global reach dates back to 1895, it only began to develop its credit card program internationally in 1972, paving the path for other companies to follow. In 1991, American Express introduced its first loyalty program and membership rewards, providing its clients more significant advantages and incentives for using their cards. American Express rewards continue to be among the most lucrative even today. From modest beginnings with quick delivery, American Express has grown its capabilities and transformed its business strategy to grow into a recognizable brand worldwide.

American Express Cards

American Express unveiled the Gold Card in 1966. The corporation introduced the Platinum Card in 1984, establishing distinct market groups within its own organization—a strategy that has spread across a wide range of businesses now. The Platinum Card had a $250 yearly cost and was advertised as super-exclusive. Prior to 2019, it was only available by invitation to American Express cardholders who had been using the card for at least two years, had made sizable purchases, and had a good payment history. As of 2019, anyone can apply for this card. The Optima card was the first credit card product offered by American Express that did not require full payment at the end of the month. It was launched in 1987.

Founders – William Fargo, Henry Wells, John Butterfield

American Express was founded on March 18, 1850, by William Fargo, Henry Wells, and John Butterfield. It was a merger of three companies named Wells & Co (owned by Henry Wells); Livingston, Fargo & Co( owned by William Fargo).; and Butterfield, Wasson & Co( owned by John Butterfield. The company’s President was Henry Wells, and its Secretary was William G. Fargo.

CEO – Stephen Squeri

The CEO of American Express is Stephen Squeri. He has been serving as the company’s CEO since 2018. In 1985, Squeri started working for American Express as a manager in the Travelers Cheque Group. He has also been the company’s vice-chairman since 2015; before that, he served as group president of the company’s global corporate services division.

Afterpay

Afterpay – A Young Australian Fintech Startup To Secure More Than 7 Million Active Customers Internationally.

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Nick Molnar and Anthony Eisen founded Afterpay in October 2014. It is a very young start-up that has its origin in Australia and eventually expanded to the UK, Canada, the US, and New Zealand. The company changed its name from Afterpay to Afterpay Limited in 2019 and currently Square Inc, an American digital payment company is planning to acquire it. It is a mutual agreement between the two companies the deal is planned to be settled by 2022 for $29 billion.

Afterpay limited is a fintech company and currently, it has over 7 million active customers with the majority of it in the US and Australia. Afterpay went public only after two years of its established and its stock price has increased rapidly in the last five years. In 2016, the company got listed in ASX with an IPO valued at $25 million. The business strategy of Afterpay is what makes it one of the most successful and youngest fintech companies today.

Founding Of Afterpay

Nick and Anthony founded Afterpay back in 2014 as a financial payment for shopping purposes. The product developed by the company allowed customers to pay in an installment-based system and thus approached the audience in a “buy first, pay later” approach. Afterpay offered several plans on how customers can repay the money in installments. With Afterpay, the retailers didn’t have any requirements to track the repayments of customers and in return, the company charged a small fee based on the transaction.

Before rolling out the platform, Compay fully built its digital strategy and also established a partnership with Touchcorp, a payment firm. Touchcorp was also one of the early investors of the company and supported the entire back end of Afterpay’s payment system. In 2017, both the companies were merged and a deal of $500 million was successfully closed with renaming the company Afterpay Touch.

Afterpay
Image source: www.uniquenewsonline.com

Success And Expansion

Afterpay was able to secure millions of customers in a very short time and the company’s valuation also started escalating. In 2016, the company decided to go public and thus got listed on the Australian Securities Exchange with an IPO of $25 million. By this time, Company established a very strong customer base and an efficient payment system. This brought Afterpay on the radar of investors and 2018 American venture capital firm Matrix Partners showed interest in the company.

Matrix Partners was willing to invest $19.4 million to help the company enter the US market. With this funding, Afterpay successfully entered the US market in mid-May of the same year with retailers like Urban Outfitters, Free People, and Anthropologie. After one year of entering the US market, Company raised a fresh fund of $317.2 million and it was invested exclusively in the company’s international growth. In mid-2019, Afterpay announced that it has crossed two million active customers in the US and has 6,500 merchants using their payment system. The same year, the company also entered into a partnership with Visa Inc and that hugely broadened the customer base of the company. Last year Company reported that from two million customers in 2019 it has crossed more than five million customers last year.

In August 2018, Company acquired a 90% stake in a UK-based company Clearpay. This company also offered the same service as Afterpay and the deal was closed for one million Afterpay shares. With this acquisition, Company entered the UK market and it landed 200,000 customers only in the first fifteen weeks. Last year, due to the COVID-19 pandemic, everyone witnessed a rising demand for online shopping. Afterpay, in order to capitalize on the e-commerce surge, showed its interest in expanding to other continents including Asia. Thus, the company is planning to acquire more Asian-based payment companies.

About The Founders

Nick Molnar, born in 1990, is the youngest self-made Australian billionaire. Nick went to the University of Sydney and has a bachelor’s degree in commerce. He is mainly famous as the co-founder of Afterpay and after the company is acquired by Square Inc he along with Anothony is to receive $2.7 billion in Square stock.

Anthony Eisen is the co-founder of Afterpay and also the current CEO of the company. He completed his education at the University of New South Wales. Eisen has more than 20 years of experiencing in leadership and investing in financial services and technology.

WhatsApp Pay can Gobble Up Paytm with its Beyond P2P Platform

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Indian digital payment industry is booming, and with the platforms like Paytm, Amazon Pay, and Google Pay, people have got many choices to opt for. On 24th April Facebook-owned WhatsApp also announced that it is going to launch a digital payment service, WhatsApp Pay, in India, giving a clear message to the leaders of digital payment, that they need to brace up for a big competition.

WhatsApp-payments-india
Image Source: thenextweb.com

For now, Paytm, an almost decade-old company, backed by Alibaba, is the biggest local digital payment service in India. On the same league, Amazon has also launched its payment service recently, Amazon Pay UPI for Android customers for peer-to-peer payments, whereas, Google Pay (earlier Google Tez) has got a hold on a share of 45 million users, operating $81 billion in transactions in March. There has been also news from Apple of planning to launch its Apple Pay service in India soon.

Though Paytm has been ruling the Indian market for the past decade, with the rise of other services including Google Pay and Amazon Pay, it has become easy to believe that Whats App Pay can easily influence people with its payment services.

Since WhatsApp has been the most loved app in India, so with a user base of over 300 million in India, it won’t be tough for WhatsApp Pay to challenge the existing digital payment services. In fact, its parent company, Facebook has got additional Indian userbase of over 300 million people, which is huge, as Paytm alone entertains only 230 million users. This way launching a peer-to-peer UPI based payment service will easily attract most of its users as it will be easy for them to transact on WhatsApp.

“Indians love WhatsApp and will love the convenience of transacting through the app. I foresee a trend wherein entrepreneurs and small and medium enterprises start embracing and using WhatsApp Pay. This will contribute to, and increase their creditworthiness. In turn, this trend will enable them to easily borrow credit from formal sources, such as banks.” Prabhu Ram, head of the Industry Intelligence Group at CMR, said in the report.

According to WhatsApp, in an app test, over 1 million people were able to send and receive money in a safe and secure manner. The company has also told the Supreme Court on May 3 that it will be complying with the RBI norms before starting its payment service in India, and it is willing to contribute to India’s financial inclusion goals.