Anré Williams, president of American Express global commercial card division, recently spoke with Business Travel News editor Michael B. Baker about the integration of GE Money's Corporate Payment Services, now nearly complete after last year's acquisition, and other growth opportunities.Business Travel News: How is American Express' acquisition of GE's card portfolio changing the corporate payment landscape
(BTNonline, April 28, 2008)?Anré Williams: Clearly, it reduces the number of large providers. There are still a lot of providers for corporate card and purchasing card, but now you have two of the top 10 consolidated. When that happens, there should be opportunities. There are only so many $10 billion clients you can acquire. To be able to acquire something like this is something that comes up not frequently.
BTN: How does the economic downturn affect the acquisition?
Williams: The timing is not something we planned. From our perspective, the timing works out well. As companies reduce the number of employees they have or trips they're taking, we're in the process of integrating billions of dollars of business and issuing hundreds of thousands of cards to clients.
BTN: Is further merger and acquisition activity in payment likely?
Williams: You never know what can happen. However, with the financial services industry overall, most of the players are going through a lot of turmoil. Some of the large ones in the United States—U.S. Bank, Wells Fargo, Bank of America, JPMorgan Chase—all of them have a lot with which to deal. Chase is dealing with the integration and acquisition of Washington Mutual. Wachovia, which was a competitor, was acquired by Wells Fargo. Also, our competitors are distracted by other issues related to financial services, lending, mortgages and banking. We, on the other hand, are uniquely focused on our commercial card business. No other competitor in the United States is like that. We can have a laser-like focus on our industry, while our competitors are focused on other challenges and opportunities that aren't in the commercial card space. When it comes to commercial card, it will be a little bit of a distraction for them. I see financial services companies continuing to consolidate, but commercial card providers probably are not going to change, and they are being distracted.
BTN: How is the integration of former General Electric payment systems customers progressing?
Williams: It's going very well. We're now switching their cards over to American Express.
BTN: Since you are honoring existing contracts with former GE clients using the MasterCard and Visa platforms, how many GE clients are moving to the American Express platform?
Williams: We can't disclose the exact number of clients, but I can say that it was in line with our projections. A significant number of large companies and organizations have decided to convert over to American Express, which we're excited about. We began issuing plastic to new accounts in December, and that will continue all the way through March. That started with General Electric itself issuing American Express corporate cards to all employees.
BTN: What's the timeline for the conversion?
Williams: What we communicated on the day of the acquisition is still true. We closed on March 27, 2008, and we said in one year we'd convert the clients who were interested in moving to American Express. We're within 90 days of being completed with the conversion.
BTN: Besides adding clients, what was driving the acquisition?
Williams: When looking at growth, you have to decide whether you want to build the business yourself or partner with someone else. We had a lot of respect for GE's commercial card team, particularly with the purchasing card product and the electronic payment technology, so when the opportunity came to buy them, we acted on it right away. We're acquiring someone with unique technology capabilities that are highly regarded. We're bringing over the client base, the technology and a lot of talented people and the strategies they were using for the purchasing card business.
BTN: What is the status of your 13 percent stake in Concur
(BTNonline, July 29, 2008)?Williams: The Concur investment was another opportunity for us, rather than building our own expense management system or trying to buy another company. In this environment, it gives you better clients. When I talk to chief financial officers about the advantages of expense management, their eyes light up, because that's what they want to do at this time. It's not just the technology that we're adding, but it also is the clients we're adding.
BTN: What other expansion opportunities do you have right now?
Williams: One of the things that didn't cost us money upfront was the partnership with Carlson Wagonlit Travel that we announced last summer. We struck a partnership with them where they will recommend American Express products. They're going to be a distribution channel for us, especially in parts of world like Europe and Asia, where they're trying to streamline their own back office. They're looking to outsource that, so the card company can pay the agency right away.
BTN: Are you looking for more of that kind of relationship this year?
Williams: It's not just about Carlson. We have distribution partnerships with other travel agencies. We'll partner with anyone who we think will help companies streamline savings. That's the ultimate customer: the one we can help better manage savings.