What is Global Network Services (GNS)?
In May of 1996, Harvey Golub, then Chairman and CEO of American Express, announced that the company would open its global network to third-party issuers, including banks and other institutions. In February of 1997, the Company announced the formation of the American Express Global Network Services business unit.

Today, GNS has 79 Partners issuing American Express-branded payment cards in close to 90 countries around the world. Our Partners are typically, but not exclusively, banking or financial services institutions, but also include insurance companies, retailers and others. They are generally among the leading players in each local market, and include such well-known brands as Samsung (Korea), Credit Saison (Japan), Deutsche Bank (Italy) and HSBC (Brazil and Argentina). In addition to Network Partners and Independent Operators, GNS maintains a number of important Joint Venture relationships, with Partners such as Credit Suisse (Switzerland) and Fortis Bank (Belgium). [top]

What does it mean for American Express to "open the network?"
Opening the network means inviting banks and other institutions to issue American Express-branded cards that are accepted on the American Express merchant network.

Since launching our first charge card in 1958, American Express has developed a sophisticated infrastructure and distinctive processing capabilities to run its successful global card business. Until recently, these had been available exclusively for proprietary cards issued by American Express. By opening the network, we have made available our network infrastructure, capabilities and merchants to other issuers. Through this initiative, we are able to increase the number of cards on the American Express network and the relevance of our brand to merchants. We also help bank issuers provide greater choice and value for their customers. [top]

Why is American Express allowing banks to issue cards on its network?
We believe this allows us to leverage and strengthen our network by providing greater volume and value for merchants. It also provides new revenue streams and growth opportunities for us. Based on our experiences with the alliances we have in close to 90 countries around the world, this will create more American Express-branded cards in force, drive more transaction volume through our merchant network, and significantly expand the reach of the American Express brand. [top]

Is opening up the network a change in the business strategy for American Express?
No, but the implementation in the United States has been delayed by the illegal activities of Visa and MasterCard in this country. Opening up the network is a natural evolution in American Express’s business strategy. Since welcoming banks to our network in 1996, we have concluded network deals with banks and other institutions in close to 90 countries around the world. As the number of these deals has increased, we have dedicated more resources to growing the business, including establishing a separate business unit, Global Network Services (or GNS), dedicated to servicing these partnerships. [top]

What is American Express’ competitive advantage as a network service provider?
American Express is committed to being the world’s best card network. The American Express network will continue to be distinguished by the superior value it provides to its merchants through incremental revenue from high-spending, loyal cardholders. The American Express network will also continue to provide a broad set of market-leading services to merchants, including unmatched customer service, a range of fraud control mechanisms, and a rich set of marketing programs to reach and engage the tens of millions of cardholders on the American Express network. American Express will continue to provide merchants opportunities to participate both in broad-scale network marketing campaigns and merchant-specific programs. The significant expansion of the cardholder base on the American Express network will significantly increase the value of marketing programs to merchants. [top]

Why did it take so long for American Express GNS to establish a relationship in the United States?
Illegal, anticompetitive conduct by Visa and MasterCard delayed implementation of our strategy in the U.S. for nearly eight years. In the United States, Visa and MasterCard’s illegal rules have restricted their member banks from issuing cards on the American Express network. Visa and MasterCard have tried in other jurisdictions to introduce similar anti-competitive rules. In these regions - including Europe, Asia and Latin America - government agencies have barred the associations from similar collusive, anti-competitive behavior, and in many cases the marketplace has become more competitive. The United States is virtually the only place in the world where such barriers to competition have continued to exist. [top]

How does American Express work with banks to issue American Express-branded cards in the United States?
The banks will be responsible for issuing the cards, owning the customer relationships, providing service, billing and credit management and designing the card product features.

American Express will process transactions, provide access to our global merchant network, as well as the affinity to the American Express brand - synonymous with quality, security and trust - to further strengthen customer relationships. [top]

Are U.S. bankcard-issuing agreements a new type of American Express co-brand or portfolio acquisition?
No. In the case of co-brands and portfolio acquisitions, the cards are issued by American Express. In deals made through Global Network Services, the third-party bank is the issuer and owns the relationship with the consumer. The bank is responsible for all operations supporting the issuing of the cards - including billing and payment systems, accounting, customer service, credit management and charge authorizations. [top]

Won’t this network strategy eventually cannibalize the American Express proprietary Card business?
No, our proprietary Card business has been highly successful. Its growth rate and credit quality have been outstanding. We’ve substantially expanded the range of merchants that accept American Express Cards, and these card-issuing partnerships will a) leverage that network and b) provide even greater volume to merchants. The reason we pursue partnerships is that we believe this is an important way to maximize the availability of American Express-branded cards to consumers. We believe this strategy will make us even more successful. [top]

American Express places a great deal of importance on its brand and its worldwide service quality. How will you maintain that level of quality?
Partnerships with other leading issuers and institutions will only serve to strengthen our brand image. We have established firm criteria for selecting our partners - criteria that differentiate us from the card associations. In particular, we choose to partner with a select group of banks and institutions that share a core set of attributes, such as a commitment to the same quality standards American Express offers its customers worldwide, strong marketing expertise, and an affinity with the American Express brand image of quality, security and trust. [top]

How will consumers benefit from bank-issued, American Express-branded card products?

A bank-issued, American Express-branded card offers cardholders: compelling value propositions specifically designed to serve their needs; superior, personalized customer service; access to more than 1,700 American Express Travel Service Offices worldwide; and Card acceptance in more than 200 countries and territories. [top]

How does American Express safeguard the confidentiality of the information pertaining to banks and other institutions that issue cards on the American Express network?
American Express has a strong commitment at all levels of the organization to maintain the confidentiality of information relating to banks and other institutions that issue cards on the American Express network. We have procedures in place to ensure that information relating to any specific issuer on the network, which is generated in the course of routing and handling transactions and while conducting financial settlements, will not be provided to another issuer.

Organizationally, Global Network Services is a separate unit from American Express’ proprietary businesses. We have developed internal firewalls to assure the appropriate routing, handling, and settlement of all transaction information traveling on our network. In addition, employees who support the network business are required to comply with a code of behavior called the GNS Confidentiality Principles, a code of behavior that specifies appropriate information use and management. [top]