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Tens of thousands of MBNA issued American Express-branded credit cards are being rolled out in the US this month, with MBNA retaining its affinity-branding strategy by offering the card to alumni associations, professional groups and recreational organizations. Unlike typical Amex cards, the cards will revolve. However, they will offer a rewards programs similar to Amex, with extra points for travel and dining through to the end of this year. Some will also offer Amex concierge services and access to Amex travel service centers around the world. The cards will be accepted on the Amex global merchant network.
"Tens of thousands" of MBNA issued American Express-branded credit cards are being rolled out in the US this month, with MBNA retaining its affinity-branding strategy by offering the card to alumni associations, professional groups and recreational organisations.
Unlike typical Amex cards, the cards will revolve. However, they will offer a rewards programme similar to Amex, with extra points for travel and dining through to the end of this year. Some will also offer Amex concierge services and access to Amex travel service centres around the world. The cards will be accepted on the Amex global merchant network.
The partnership between Amex and MBNA - an issuer of Visa and MasterCard credit cards - is the first of its kind in the United States and follows October's Supreme Court ruling that Visa and MasterCard violated anti-trust laws by barring their member banks from issuing on rival networks (see CI issue 326).
Peter Godfrey, president of Global Network Services, Amex, previously told CI that Amex is in discussions with a number of other US banks to issue its cards - but clearly MBNA has several months head start. Amex will need to add additional issuing partners to increase the number of Amex cards issued, thereby counteracting the inroads that MBNA might make into Amex's traditional customer base, and potential Amex customers among MBNA's own Visa and MasterCard customers. Most commentators expect MBNA to cause greater cannibalisation of the Amex database than other Amex issuing banks overseas have previously done.
MBNA and Amex have said that following the launch of the affinity cards, they will launch a premium card with enhanced rewards, probably fee-based. Kenneth Chenault, CEO of Amex, said this would give a range of customer segments "unique value propositions." MBNA vice chairman Ric Struthers has said that the new card will be targeted at its customers who spend over $6,000 per year on their credit card.
Discover, the other payment network to have benefited from the supreme court ruling, has yet to specify any similar agreements it may have signed.
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Copyright Lafferty Ltd. Nov 16, 2004