Amex set to link up with bank
Sunday 01 December 1996
In a direct challenge to Visa and Mastercard, which also license their brand to banks, the bank will offer a credit card sporting an Amex logo but carrying the main brand of the bank, in the same way as Barclaycard offers its customers a credit card on the Visa network.
The launch, planned for March 1997, will be the first time Amex has gone outside its direct-mail distribution channel, and is part of the company's revised strategy, under chairman Harvey Golub, of exploiting brand opportunities outside the mature charge card business.
The company has been in talks with Lloyds TSB, NatWest and Barclays about possible tie-ups. However, industry observers favour NatWest, which has been aggressively targeting co-branding opportunities and recently launched Orange and Tesco credit cards.
In addition, observers pointed out that Richard Goeltz, formerly finance director at NatWest, joined Amex in September as chief financial officer reporting directly to Golub and with particular responsibility for overseeing strategy.
According to Amex, the tie-up with a UK bank is a natural progression for its credit card, which was launched in the UK last year. "Our aim is to roll out the co-branding strategy," said Jane Drew, Amex's corporate communications manager. "We are still looking for a UK partner."
The prospect of such a move from Amex in the UK has already prompted Visa to try and change its contracts with its member banks in the EU prohibiting them from carrying Amex-branded products, a clause already present in its contracts with US banks. However, in February this year EU competition commissioner Karel van Miert said it would investigate any alteration on the grounds it might be anti-competitive, and Visa dropped the plan.
Amex already franchises its name to banks in Israel, Turkey and Greece, and recently signed a co-branded credit card deal with Peugeot in France.
In the US, the clause prohibiting Visa-issuing banks from producing Amex cards is being challenged by Advanta, a Pennsylvanian bank which has launched its own Amex-branded card.
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