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AmEx (AXP) Teams Up With Worldpay to Expand Payment Choices

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American Express Company (AXP - Free Report) recently signed an agreement with payment solutions provider Worldpay to make onboarding of loyal and high-spending American Express cardmembers more convenient for small businesses, per reports. The move is expected to enhance AmEx’s footprint in the U.K. market.

In the past three years, the number of places accepting AmEx cards rose 46%. The latest deal will likely further enhance the number of locations. This February, AmEx introduced its Plan It product in the U.K., which enables its credit card members to pay off their purchases in installments. This move aligns with its strategy to expand its presence in the U.K. market.

The latest deal will likely strengthen the longstanding partnership between AXP and Worldpay. Early this year, Fidelity National divested a majority stake in Worldpay Merchant Solutions to private equity funds managed by GTCR. Fidelity National currently holds a 45% stake in Worldpay.

With this latest agreement, small businesses will have another option of accepting AmEx payments, enabling them to capture more spending from customers. Merchants under Worldpay are expected to benefit from a simplified transaction reconciliation and resultant operational efficiencies. This move will likely expand AmEx’s merchant coverage, leveraging its cardmember base growth.

The spending of AmEx cardmembers, on average, is 3.9 times higher per annum, and they make purchases 3.2 times more frequently than non-cardmembers. This presents a significant growth opportunity for small businesses.

Price Performances

Shares of American Express have gained 60.5% in the past year compared with the 24.2% growth of the industry.

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Zacks Rank & Key Picks

American Express currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Finance space are Euronet Worldwide, Inc. (EEFT - Free Report) , Jackson Financial Inc. (JXN - Free Report) and CleanSpark, Inc. (CLSK - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Euronet Worldwide’s 2024 earnings indicates 15.8% year-over-year growth. During the past month, EEFT has witnessed three upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters with an average surprise of 9.3%.

The Zacks Consensus Estimate for Jackson Financial’s current-year earnings indicates 27.4% year-over-year growth. JXN beat earnings estimates twice in the past four quarters and missed on the other occasions. The consensus mark for current year revenues predicts a 114.3% jump from a year ago.

The Zacks Consensus Estimate for CleanSpark’s current-year earnings suggests a 140.3% year-over-year improvement. During the past month, CLSK has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for current year revenues predicts a 183.6% surge from a year ago.

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