American Express Company (AXP) Stock Analysis

American Express’s primary competitive edge lies in its integrated business model, brand strength, premium customer base, and differentiated service.

Unlike Visa and Mastercard, which operate as open-loop networks and rely on third-party banks to issue cards, American Express is a closed-loop network: it issues cards, acquires merchants, and processes transactions directly. This structure gives AXP end-to-end control over customer data, pricing, and service, enabling superior risk management and tailored rewards. For example, AXP’s net write-off rate for card loans (2.0% in Q2 2025) is consistently below Discover’s (3.1% in Q2 2025) and in line with or better than large bank issuers.

The American Express brand is synonymous with trust, security, and premium service. The company consistently ranks at or near the top in customer satisfaction surveys (e.g., #1 in J.D. Power’s 2025 U.S. Credit Card Mobile App and Website Experience). Its affluent cardholder base drives higher average spending per card—AXP’s average proprietary cardholder spent $6,370 in Q2 2025, well above industry norms.

AXP’s focus on premium and small business segments, frequent product refreshes, and global merchant network (100 million+ locations) reinforce customer loyalty and pricing power. While merchant acceptance and fees remain a relative weakness versus Visa/Mastercard, AXP’s ability to bundle rewards, travel, and service offerings creates switching costs and supports durable returns.