Loyalty & Rewards

Amex: The Race For Rewards Dominance Is Slowing

American Express (Amex) said there is finally some relief from the rewards war that has been raging for the past three years, Bloomberg reported on Tuesday (Dec. 10).

The battle lines were drawn when JPMorgan Chase launched the Chase Sapphire Reserve card, Amex CEO Steve Squeri said at a Manhattan Goldman Sachs conference. That move triggered the industry — including Amex — to start spending on points and perks to attract premium card customers. Amex has since continued to enhance its card rewards, and has paid more to maintain co-brand partners like Delta Air Lines. 

“Our competitors are run by really smart people, and they do a really good job executing. What we have seen, though, is a leveling off,” Squeri told investors at the conference. “What we have seen is a leveling off in terms of rewards, a leveling off of bonuses and things like that, and even interest-rate offers.”

For Amex, the revitalization of its Platinum portfolio has been positive, with Platinum cardholders up 60 percent since JPMorgan Chase launched the Sapphire card. In addition, about 50 percent of new cardholders are under 35 years old, said Squeri.

According to the J.D. Power 2019 Credit Card Satisfaction Study, released in August, the credit card incentive war may have reached its peak. 

“The average credit card customer today has roughly 16 different benefits available, yet only about one-third of customers say they completely understand all of the benefits available to them,” said John Cabell, director of wealth and lending intelligence at J.D. Power. 

He added that rewards-based competition has led to an increase in overall customer satisfaction, but “issuers may have wrung all of the value they can out of this approach.”    

JPMorgan Chase’s success with its Sapphire Reserve card ended up straining its relationship with co-brand partner United Airlines (the company offers several United Airlines cards). However, the Sapphire Reserve card delivers more points for travel and dining, allowing users to redeem them for a variety of rewards — including United flights, making the United card redundant for many customers. 

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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