AmEx Is Likely To Become The Second Largest U.S. Card Processing Company This Year
The U.S. card processing industry is likely to see a shakeup among the four incumbents for the first time in decades, as American Express looks poised to nudge ahead of MasterCard to become the second largest processor of credit card purchases in the country later this year. While Visa remains the undisputed market leader with a market share of almost 53% in Q1 2018, MasterCard and American Express both captured a nearly identical market share of 22% each. However, while MasterCard’s market share has fallen marginally compared to Q1 2017, American Express has done well to report a slight improvement year-on-year.

This is impressive progress for American Express since its loss of the lucrative Costco card partnership in 2016 – an event that had a notable impact on the company’s card balances as well as purchase volumes over several quarters. And as we detail in our interactive model for American Express, the company’s revamped business model should lead to accelerated growth in its card purchase volumes over coming years – something that will help cement its claim to the #2 spot going forward.

What To Watch For Going Forward

The payments industry is seasonal, with purchase volumes peaking in the fourth quarter of the year due to the impact of holiday season shopping, before falling sharply in the first quarter. The figure then increases steadily over the second and third quarters. This trend is seen clearly in the table below, which captures the changes in credit card purchase volumes for these companies over the last five quarters.
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Trefis Team, Contributor
MAY 29, 2018 @ 02:28 PM

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