American Express Company
Financial Services / PaymentsFounded 1850- Updated June 2026
Reviewed by Swet Parvadiya
Last reviewed: June 2026
CorpDigest
American Express Company
Company History
Founded 1850 in New York, New York
Last reviewed: 2026-06-03 · By Swet Parvadiya
1850, Albany, New York. Three express delivery competitors — Wells & Company, Livingston, Fargo & Company, and Butterfield, Wasson & Company — merged under pressure from investors who were tired of watching them fight for the same routes. The new firm, American Express Company, immediately controlled the most valuable freight corridors in the northeastern United States. It was a logistics monopoly before monopoly was a regulatory concern.
The 1882 launch of money orders gave the company its first financial product, a service that let ordinary Americans send currency by mail without carrying cash. Nine years later, in 1891, Marcellus Berry invented the traveler's cheque — a pre-signed instrument that could be countersigned at the point of use and honored worldwide. The product was brilliant because it solved a real problem: affluent Americans traveling abroad couldn't access their bank accounts and couldn't safely carry large amounts of currency. American Express became the institution that wealthy travelers trusted.
The government nationalization of the freight business in 1917 was catastrophic in the moment and clarifying in retrospect. Without a freight operation to run, the company became entirely focused on financial products and the international service network that the traveler's cheque business required. By the time the war ended, American Express had offices across Europe and had positioned itself as the essential financial companion for American travelers abroad.
The 1958 launch of the American Express Charge Card — distinguished from credit cards by requiring full payment each month — established the brand positioning that persists today: a product for people who spend freely and pay completely. That positioning attracted high-income customers, which attracted premium merchants willing to pay higher interchange fees, which funded better rewards, which attracted more high-income customers.
Henry Wells (1805-1878) was one of the founding fathers of the American express industry — the network of private courier and freight companies that predated and competed with the federal postal service. Born in Vermont and largely self-educated, Wells developed his business instincts working as a freight agent before establishing his own express operations in the 1840s. His vision was simple but radical for the era: create a system of reliable, accountable freight and document delivery across the northeastern United States that merchants and banks could trust for high-value, time-sensitive shipments. The merger that created American Express in 1850 represented both his greatest achievement and, in some ways, his greatest frustration: constrained by his co-founders from expanding westward, Wells pursued the California opportunity separately through Wells Fargo. He remained associated with American Express in its early years but is remembered today primarily as the visionary who saw that private express delivery could become a major American industry long before the idea was obvious.
William Fargo co-founded American Express in 1850 alongside Henry Wells and John Butterfield, bringing operational discipline and route management expertise to the merger of competing express businesses. Born in 1818 in upstate New York, Fargo began working in the express industry in his early twenties and built a reputation for reliability and trustworthiness that translated directly into the brand values American Express would cultivate across subsequent decades. When the partners disagreed about expanding into the California market following the gold rush, Fargo joined Wells in founding the separate Wells, Fargo & Company in 1852 — a company that would develop its own legendary American history in the West. Fargo served as the second president of American Express from 1868 to 1881, overseeing the company during a period of expansion and professionalization. He simultaneously served as mayor of Buffalo from 1862 to 1866, reflecting the civic stature that successful business leaders of the era often achieved in their home communities.
John Warren Butterfield served as the first president of American Express from its founding in 1850 until 1861, bringing the organizational resources, political connections, and financial backing that made the merger viable. His business empire extended well beyond American Express: he operated stagecoach lines, telegraph companies, and eventually won the coveted U.S. Government overland mail contract in 1857, operating the Butterfield Overland Mail service across the American Southwest in one of the great transportation enterprises of the nineteenth century. Butterfield's legacy within American Express is complex: his insistence on blocking westward expansion frustrated his co-founders and led directly to the creation of Wells Fargo as a competing enterprise, a corporate bifurcation that might have been avoided had the three founders shared a unified geographic vision. Nevertheless, his foundational role in establishing the company's corporate infrastructure, financial backing, and initial route network was essential to American Express's early commercial success.
Henry Wells, William Fargo, and John Butterfield merged competing express businesses to create American Express Company, incorporated in New York with 150,000 dollars in capital. The company began operations as a freight and document delivery service competing with the United States Post Office and smaller express operators across the northeastern United States.
American Express introduced the money order product, providing millions of Americans without bank accounts a reliable, affordable way to send money across distances. The product was an immediate commercial success, capturing significant market share from the postal money order service and establishing American Express as a financial institution rather than merely a freight company.
American Express executive Marcellus Berry invented the American Express Traveler's Cheque — a financial instrument allowing travelers to carry guaranteed, replaceable denominated cheques rather than cash. The traveler's cheque was so commercially successful that it would define American Express's core business for nearly a century and establish the company's global office network that eventually supported its card business.
The United States government, citing World War I transportation coordination requirements, nationalized the domestic express industry, transferring American Express's freight operations to the government-controlled American Railway Express Agency. This forced American Express to reinvent itself around its international financial services — traveler's cheques, foreign banking, and travel services — an accidental transformation that ultimately proved more valuable than the freight business it lost.
American Express entered the charge card market in October 1958, mailing 250,000 cards to initial members. Despite severe early losses from fraud and credit problems in the first year of operation, the company persisted and repositioned the card as a premium product — a strategic decision that would define the company's competitive positioning for the next seven decades and ultimately create one of the most recognizable financial brands on earth.
American Express introduced a corporate card product specifically designed for business travel and entertainment expense management, tapping the growing market of American corporations whose employees traveled extensively and needed a reliable, comprehensive expense documentation solution. The corporate card would eventually become a multi-billion-dollar revenue segment and establish American Express as the dominant player in business travel payment.
Under CEO James Robinson III, American Express pursued an aggressive diversification strategy, acquiring Shearson/American Express brokerage, the investment bank Lehman Brothers Kuhn Loeb, and IDS Financial Services in an attempt to create an integrated financial services conglomerate. The strategy ultimately failed to produce the expected operational efficiencies and the acquired businesses proved difficult to integrate with American Express's card and travel culture, leading to a decade of strategic confusion and financial underperformance.
Harvey Golub became CEO and immediately began divesting the financial conglomerate acquisitions of the Robinson era, selling Shearson to Smith Barney and eventually spinning off Lehman Brothers as an independent public company. Golub refocused American Express on its core payments and travel franchise, invested in rebuilding merchant acceptance, and restored financial discipline that had deteriorated during the diversification era.
Kenneth Chenault, one of the most respected executives in American financial history and only the third African American CEO of a Fortune 500 company at the time, took the helm at American Express. Chenault led the company through the September 11 attacks — which devastated travel spending — and the 2008-2009 financial crisis, navigating both with financial discipline and strategic steadiness that preserved the company's competitive position.
Stephen Squeri succeeded Kenneth Chenault as chairman and CEO in February 2018, inheriting a company facing meaningful competitive pressure from Chase Sapphire Reserve and growing fintech disruption. Squeri refocused the company on acquiring younger card members, enriching card benefits to justify premium fee increases, expanding the small business segment, and accelerating international growth — a strategic repositioning that would produce record financial results by 2024.
The COVID-19 pandemic caused American Express's billed business to decline 19 percent in 2020 as corporate travel and entertainment spending — historically the company's largest revenue driver — collapsed. American Express responded by accelerating its pivot toward everyday consumer spending categories, enhancing digital benefits, and adding credits for streaming, food delivery, and dining that were relevant to homebound card members, positioning the company for the eventual travel recovery.
American Express reported record FY2024 results: 63.8 billion dollars in total revenues net of interest expense, 10.1 billion dollars in net income, and 14.01 dollars in diluted EPS. Card fees reached 8.0 billion dollars, an 18 percent increase year-over-year, reflecting the success of premium card enrichment strategies. Billed business exceeded 1.7 trillion dollars, with millennials and Gen Z comprising over 60 percent of new consumer card acquisitions.
American Express acquired IDS Financial Services — a Minneapolis-based financial planning and insurance company — in 1984 as part of CEO James Robinson's vision of creating a comprehensive financial services conglomerate that could offer investment advice, insurance products, and payment services through a unified brand. The acquisition was intended to capture the growing market of American middle-class families seeking comprehensive financial planning services. American Express believed that its brand credibility and distribution capabilities could accelerate IDS's growth beyond what it could achieve independently.
American Express acquired the venerable investment bank Lehman Brothers Kuhn Loeb in 1984 as part of its financial supermarket strategy, seeking to add investment banking and capital markets capabilities to its payments and financial planning franchise. CEO James Robinson believed that the combination of American Express's wealthy client base with Lehman's Wall Street investment banking relationships and capabilities could produce significant cross-selling opportunities and fee income.
American Express acquired Loyalty Partner, a German loyalty marketing company operating the Payback coalition loyalty program in Germany, Poland, and India, as part of its strategy to expand its loyalty expertise and international presence beyond the card network itself. The acquisition was intended to expand American Express's data analytics capabilities and provide a foothold in loyalty program management services for retail merchants who did not necessarily use American Express as their payment network.
American Express made a strategic minority investment in aCommerce, a Southeast Asian e-commerce enablement company, as part of its strategy to establish presence in rapidly growing Southeast Asian digital commerce markets and understand the payment infrastructure needs of emerging market e-commerce businesses. The investment reflected American Express's recognition that Southeast Asia's rapidly expanding middle class and accelerating digital commerce adoption represented a long-term opportunity for premium card products and merchant payment services.
American Express acquired significant assets of Kabbage, a small business lending and financial services platform, in late 2020 following Kabbage's financial difficulties during the COVID-19 pandemic. The acquisition was a strategic accelerant for American Express's ambition to expand from pure card products into a comprehensive small business financial services platform, adding cash flow management tools, line of credit products, and data analytics capabilities that would deepen the American Express relationship with the approximately 3 to 4 million small business card members in its existing portfolio.
American Express nearly collapsed in 1963 when its warehousing subsidiary Allied Crude Vegetable Oil issued $150 million in fraudulent receipts for non-existent soybean oil, exposing Amex to massive liability claims. The scandal, perpetrated by commodities trader Anthony De Angelis, cost American Express $58 million and threatened its credit rating and business partnerships. Warren Buffett famously invested in American Express during the crisis, recognizing that customers still trusted the Amex brand despite the scandal, and the company recovered by exiting the warehousing business and refocusing on its core financial services, validating Buffett's thesis.
American Express launched its first charge card in 1958 to compete with Diners Club, but the company remained primarily a travel services business until the 1980s when CEO James Robinson III prioritized card growth. By 1987, card revenues surpassed traveler's checks for the first time, generating $4.8 billion versus $600 million from travel services. The transition accelerated through the 1990s as international travel opened up and e-commerce emerged, and by 2000 American Express derived over 70% of revenue from card products, completing its transformation from a 19th-century express mail company to a modern payments network.
American Express lost $2.7 billion in 2008-2009 as credit card defaults spiked above 10% and consumer spending collapsed, forcing the company to convert to a bank holding company to receive $3.4 billion in TARP funds. Amex's stock fell from $64 in 2007 to $10 in March 2009, and the company cut 7,000 jobs (10% of workforce) while raising $3.5 billion in emergency capital from shareholders including Warren Buffett. The crisis exposed American Express's vulnerability to economic downturns because its affluent customer base—while more resilient than mass market—still cut discretionary spending sharply during recessions, leading to questions about Amex's premium positioning.
Costco ended its 16-year exclusive partnership with American Express in 2016, switching to Visa in a deal with Citibank that cost Amex approximately 10% of its US card spending volume ($80 billion annually). The breakup occurred because American Express refused to reduce its merchant discount rates to match Visa's lower interchange fees, and Costco's low-margin business model made the 2-3% Amex fees unsustainable. The loss triggered an 8% stock decline and forced CEO Ken Chenault to accelerate Amex's shift toward direct consumer relationships rather than co-brand partnerships, marking a strategic inflection point toward premium products like Platinum and Centurion cards.