Because of a robust global economy, American Express has seen its profits soar. Most people know it for its credit and debit cards. As a result, Visa and MasterCard are virtually usually compared to it. American Express, unlike these two competitors, is both a payment processor and a credit card issuer. As a potential source of increased income, if customers spend more, this might potentially put American Express at more risk if things go south economically.

Some of the company's most successful subsidiaries were formed through mergers and acquisitions. An overview of some of the company's most important subsidiaries, as well as some of the company's primary information, is provided in this brief article.

An Overview of American Express

Over 110 countries are represented by American Express (AXP), an American banking and travel services company. Charge cards, credit cards, financial services, and traveler's checks are among the company's core offerings. Amex, a firm that offers these items to customers, business owners, and companies worldwide, is responsible for their distribution. In 2021, the corporation had billed $1 trillion in worldwide spending. 3 The corporation made $8.1 billion in profit on $42.4 billion in revenue in the fiscal year ending in 2021.

The Acquisition Methodology Employed by American Express

As a result of American Express's acquisitions, the company aims to make its products easier to use for current customers. Also, it hopes to increase the frequency with which individuals make purchases with their cards. AMEX bought Cake Technologies, a UK-based fin-tech business, in March 2018 for $13 million.

Cake offers a service that makes it easier for diners to pay their money. Customers will enjoy better service from American Express if Cake technologies are included in the platform. As a financial services giant, American Express is expected to keep on buying more firms through mergers and acquisitions.

American Express, a prominent player in the financial services industry, often acquires smaller companies, many of which are incorporated into the company's wide range of goods and services. American Express paid an unknown sum in January 2019 for the restaurant reservation tool Pocket Concierge, which targets Japanese corporations.

American Express TRS

The business's primary operational subsidiary, American Express Travel Related Services Company, or TRS, is a specialized financing company. As a result, it might be considered the firm's biological parent of both issuing banks. The Federal Reserve controls TRS since it is considered a financial holding company.

American Express relies on TRS for a wide range of services. However, the corporation is mainly responsible for supplying the branches and subsidiaries with staff, infrastructure, systems, and other operational resources. As a result, TRS holds a stake in most of American Express's legal organizations, whether directly or indirectly.

For TRS, American Express's discount income, or the amount collected on transactions with businesses that accept American Express credit cards, is the critical source of revenue. Additionally, TRS earns money via card fees, travel kickbacks, and other sources.

American Express National Bank

Sandy, Utah-based American Express National Bank is an American Express affiliate and a federal savings bank. Consumers can use American Express Bank credit and charge cards and co-branded cards from American Express partners to make purchases.

Open a savings account or perhaps a certificate of deposit with the American Express Savings brand to begin saving money today. Accounts may only be opened on the bank's website; there are no physical branches. Deposits made through American Express Bank's brokerage partners are also accepted.

Accertify

As a global fraud protection organization, Accertify has operations in Illinois, Spain, the UK, and Australia. An array of technologies and solutions are available from the company to guard against the fraudulent use of online payment methods 12. For this reason, they're employed to mitigate the danger of cardless transactions.

Among its clients are StubHub, Inc., JetBlue Airways, 1-800-Flowers.com, and Urban Outfitters, among many more (URBN). 14 The American Express Travel Related Services Company owns Accertify, a wholly owned subsidiary of that firm.

A wide range of payment methods, including major credit cards and online payment services like PayPal, are supported by Accertify's products (PYPL). The firm offers a variety of payment solutions, including fraud detection, chargeback management, data analysis, and payment gateways, all of which may be offered via a hosted SaaS platform. Accertify has managed service solutions available for e-commerce businesses as an alternative to hiring in-house fraud analysts.

AMEX Assurance Company

Ensuring travelers is the responsibility of AMEX Assurance Company, the insurance underwriting arm of the American Express Group. Car rental damage coverage, extended warranty protection, product purchase protection, and travel accident coverage are all underwritten by this insurance company for American Express credit and debit cardholders.

There are no retail activities for the firm. Since its inception in 1973, this firm has been known as the American Automobile Insurance Company of Illinois. It has been an American Express subsidiary since September 1, 2007.