1 More Reason American Express Is Different From the Rest

American Express is trying to create the most desirable and most convenient rewards program for its customers

Jul 9, 2014 at 3:31PM

American Express (NYSE:AXP) has done a lot over the years to set itself apart from the other payment processors and credit card issuers.


source: company

Instead of going for a massive customer base, American Express has done a great job of creating exclusive "clubs" of cardholders, as with the original "Platinum Card", the Centurion (black) card, and others.

As a result of the excellent service and perks offered, the company has managed to build a fiercely loyal customer base that is more affluent and desirable than Visa or MasterCard's.

Now, it looks like American Express is trying to be the most high-tech credit card company in the market. It's partnership with Uber is the first time consumers can use reward points in-app and on-demand for transportation.

Why is this so significant and what is the potential of this type of rewards system?

About the Amex-Uber partnership
Basically, what the partnership does is make earning and redeeming rewards with transportation service Uber easier.

Mercedes Public Domain

American Express cardholders enrolled in the Membership Rewards program can add their card to an Uber account. Then, right in the Uber app, the customer has a choice of whether to earn double rewards points for their purchase or redeem rewards points for their ride.

Why is it so significant?
The significance is that the partnership streamlines the reward process.

There is no complex redemption procedure. Cardholders simply open the app and can choose to pay with their linked reward points.

While the partnership should definitely benefit both companies, the most significant effect of this is that it creates an even more desirable rewards program for American Express' cardholders.

This is a similar program to the New York City taxi payment option introduced late last year, in which Membership Rewards participants have the option to redeem points for cab rides at the point-of-sale. However, the Uber partnership combines the convenient redemption option with the added incentive of double points on purchases.

There is really no end to the possibilities here.

American Express could theoretically integrate its Membership Rewards program into service provider or retailer's point-of-sale system. Imagine being able to pull into your local gas station and use your points right at the pump to pay for a tank of gas. Or being able to walk into your favorite store and access your reward points right at the register.

That's what this could be leading up to.

The potential is huge
In one survey, 71% of respondents said reward programs influence their credit card usage. And, the number one characteristic desired by consumers is rewards that are easy to use and redeem.

The efforts by American Express to create the most desirable rewards program in the market seems to be paying off so far, as the company was ranked number one in customer satisfaction by JD Power for the seventh consecutive year.

If the Uber partnership is successful, American Express could easily partner with many other service providers and retailers to streamline the reward redemption. As I mentioned earlier, American Express has some of the most loyal cardholders in the business, and being able to simply open an app and earn points could easily be enough to sway purchasing decisions.

So, not only will this benefit the companies lucky enough to partner with American Express, but it helps further Amex's goal of creating the most unique and desirable rewards program in the world.

Your credit card may soon be completely worthless
The AmEx in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends American Express. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers