American Express (Amex) Leaves EU Business Model
EU Payments Package imposes a new regulatory burden on the AMEX licensing business. Due to new regulations, American Express is no longer capable to compete with Visa and MasterCard when it came to bank cooperation. Thus, a hard decision was made, to exit all of its bank licensing arrangements in the European Union.
“Regulations inflicted by the EU Payments Package were set in place to provide interchange fee caps, separate payment schemes from processing operations, regulate requirements for network access, and positively affect the pan-European licensing agreements. The aim and guiding principle of the EU PP were to level the playing field and provide customers with both security and increased options. However, in the case of American Express, these regulations have also rendered the company’s bank licensing business unviable in the European Union.”
“As a result of this, American Express will no longer be operating a licensing business within the EU and no new licenses will be issued. The company has terminated its licenses with its existing partners, and is in the process of winding down those operations.” – the company said.
All licenses with its existing EU partners are terminated and American Express credit cards issued under independent operator agreements will be rendered invalid in all countries of the European Union. However, clients were provided with the opportunity to switch to other card brands.
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