American Express Company (NYSE:AXP) and Wells Fargo & Co (NYSE:WFC) are joining hands to facilitate Wells Fargo’s attempt to market a portfolio of credit cards to its consumers.
The fourth-biggest U.S. bank, Wells Fargo & Co (NYSE:WFC), will make Amex Cards available in the market place nationwide by mid-2014. However, financial terms of the deal were not disclosed.
Wells Fargo to launch pilot program soon
The nation’s largest home lender, Wells Fargo customers will be able to apply for the Amex cards through mail, online, phone and 6,000 retail store locations. Wells Fargo & Co (NYSE:WFC) will conduct a pilot program for customers in select U.S. markets starting in the third quarter of 2013, with a full scale launch set for first half of 2014. The new cards will be accepted on the American Express global merchant network.
The new cards will be issued to San Francisco bank’s 70 million customers. Presently, only a third of Wells Fargo bank customers have a Wells Fargo credit card, offering ample opportunity for Amex Card’s penetration.
American Express, Wells Fargo share common founders
Echoing confidence with the new arrangement, Kenneth I. Chenault, Chairman and CEO of American Express indicated that given the fact that two of Amex’s founders were Henry Wells and William Fargo, the new partnership is quite significant. He indicated Wells Fargo & Co (NYSE:WFC)’s addition would enlarge American Express Company (NYSE:AXP)’s global network of card-issuing partners.
Gerri Detweiler of Credit.com also eschewed confidence as the partnership would make complete sense, as both American Express Company (NYSE:AXP) and Wells Fargo have generally good reputations for customer service.
Partner Advantage, Loytalty Edge features
The card-issuing partnership would help Wells Fargo & Co (NYSE:WFC) offer American Express Company (NYSE:AXP)’s Partner Advantage capabilities in developing a suite of products with exclusive benefits and customized offers from the online and offline Amex network. Wells Fargo can also leverage Amex’s LoyaltyEdge program to provide a wide range of merchandise and gift cards to Wells Fargo’s consumer credit customers.
Wells Fargo ranks among the seventh-largest issuer of general purpose credit cards in the U.S., while JPMorgan Chase & Co. (NYSE:JPM) tops the list with a credit-card portfolio of over $12 billion last year. Presently, about 10 banks in the U.S. including Citigroup and Bank of America are issuing co-branded American Express Company (NYSE:AXP)-branded cards.