who-owns-american-express

Who Owns American Express?

Warren Buffet primarily owns American Express via his holding company, Berkshire Hathaway, and its subsidiaries. Indeed, Warren Buffet has a 20.4% ownership stake in American Express; followed by The Vanguard Group, with 6.33%, and BlackRock, with 6.1% ownership. American Express generated $52.8 billion in revenue in 2022 and $7.5 billion in profits.

History of American Express

American Express is an American financial services corporation with a primary focus on credit cards, payment processing, and traveler’s cheques. The company was founded in 1850 and was the result of a merger between entities owned by Henry Wells, William G. Fargo, and John Warren Butterfield.

In April 2023, American Express occupied number three on the Fortune Best Companies to Work For List. The company is also one of the world’s most valuable, with first-quarter revenue in 2023 reported as $14.3 billion.

Here is a look at the company’s history and how it has evolved since its inception.

The origins of American Express

American Express was founded on March 18, 1850, and was the result of a merger between three companies involved in the transportation industry:

  1. Livingston, Fargo & Company (formerly Western Express) – founded by Henry Wells and William G. Fargo in 1845.
  2. Wells & Co. (formerly Livingston, Wells & Co.) – founded by Henry Wells in 1846 and subsequently owned by Wells at the time of the merger, and
  3. Butterfield & Wasson – founded by John Butterfield and James D. Wasson.

With Wells as President and Fargo as Secretary, American Express (then an unincorporated association) specialized in the express delivery of valuables, goods, and other packages. 

American Express is founded

By 1862, American Express operated over 890 offices and almost 10,000 miles of railway and express routes across the United States. Its success attracted the attention of competitors – notably the Merchants Union Express Company who remained a bitter rival for two years.

On November 25, 1868, the two entities merged to form the American Merchants Union Express Company. This was later renamed the American Express Company in 1873. 

When Fargo died in 1881, younger brother James Congdell Fargo started what would become a 33-year stint at the helm of the company. Over the years, he introduced innovations such as money orders (1882) and traveler’s cheques (1891) and later oversaw the company’s first offices in France, England, and Germany, among others.

Change of direction and expansion

When the U.S. Government nationalized the express industry in 1918, American Express pivoted almost exclusively to banking and travel-related services. 

Years later, in 1958, the company debuted its now-iconic green charge card in the United States and Canada. Over the 60s, 70s, and 80s, American Express acquired various investment, insurance, and publishing companies to diversify its interests. 

In 1972, the first card-issuance partnerships were established in South America and Europe to grow the business and brand around the world. This growth accelerated in the 1990s and was no doubt helped by the introduction of the Membership Miles rewards program in 1991.

Four years later, American Express released its first cobranded card in collaboration with hotel chain Hilton. According to its website, the deal marked “a seismic shift in the company’s thinking, demonstrating the power of partnership to help serve our mutual customers.

Recent initiatives

American Express released its best-in-class mobile app in 2010, which was soon followed by its Small Business Saturday initiative to encourage Americans to support small businesses.

In 2014, the company launched the machine learning-based Amplify Fraud Protection to protect users from malicious actors anywhere in the world. American Express’s Corporate Card program was refreshed in 2019 with new flexible tools and solutions for business travelers. 

The following October, the company announced a $1 billion action plan to promote ethnic, racial, and gender equity across its colleagues, customers, and communities.

Key takeaways:

  • American Express is an American financial services corporation with a primary focus on credit cards, payment processing, and traveler’s cheques. The company was founded in 1850 and was the result of a merger between entities owned by Henry Wells, William G. Fargo, and John Warren Butterfield.
  • The company’s early success attracted the attention of competitors – notably the Merchants Union Express Company who remained a bitter rival for two years. On November 25, 1868, the two entities merged to form the American Merchants Union Express Company. This was later renamed the American Express Company in 1873. 
  • When the U.S. Government nationalized the express industry in 1918, American Express pivoted almost exclusively to banking and travel-related services. In 1958, the company debuted its now-iconic green charge card in the United States and Canada and later acquired various investment, insurance, and publishing companies to diversify.

Key Highlights

  • Ownership and Financials:
    • Warren Buffet’s Berkshire Hathaway owns a 20.4% stake in American Express.
    • American Express generated $52.8 billion in revenue and $7.5 billion in profits in 2022.
    • The Vanguard Group and BlackRock are other significant shareholders.
  • Founding and Merger:
    • American Express was founded in 1850 as a result of a merger between three transportation companies.
    • Henry Wells, William G. Fargo, and John Warren Butterfield were key figures in its inception.
  • Early Success and Rivalry:
    • By 1862, American Express had over 890 offices and extensive railway and express routes.
    • The company had a notable rivalry with Merchants Union Express Company.
  • Merger and Name Change:
    • American Express merged with Merchants Union Express Company in 1868.
    • The resulting entity was renamed American Express Company in 1873.
  • Shift to Banking and Travel Services:
    • In 1918, due to government nationalization, American Express shifted focus to banking and travel-related services.
  • Iconic Charge Card and Diversification:
    • American Express introduced its green charge card in 1958 in the US and Canada.
    • Over the years, the company diversified by acquiring various investment, insurance, and publishing companies.
  • Global Expansion and Partnerships:
    • The company expanded internationally, establishing offices in countries like France, England, and Germany.
    • It initiated card-issuance partnerships in South America and Europe in the 1970s.
    • The Membership Miles rewards program was launched in 1991.
  • Co-branded Cards and Innovations:
    • American Express introduced cobranded cards, starting with Hilton in 1995.
    • The company released its mobile app in 2010 and launched Small Business Saturday to support local businesses.
    • Amplify Fraud Protection, a machine learning-based security measure, was introduced in 2014.
  • Equity and Social Initiatives:
    • In 2019, the Corporate Card program was updated for business travelers.
    • American Express announced a $1 billion action plan in 2019 to promote equity across colleagues, customers, and communities.
  • Recent Recognition and Financial Performance:
    • In April 2023, American Express was ranked third on the Fortune Best Companies to Work For List.
    • The company reported first-quarter revenue of $14.3 billion in 2023.

Related Visual Stories

American Express Revenue

american-express-revenue
In 2020, American Express reported a revenue of $36.08 billion. The company saw an increase in revenue in 2021, reporting $42.38 billion, indicating a growth from the previous year. In 2022, American Express’s revenue significantly increased to $52.86 billion, showing a strong upward trend over the three-year period.

American Express Profits

american-express-profits
In 2020, American Express reported a net income of $3.13 billion. The company’s net income significantly increased in 2021, rising to $8.06 billion. In 2022, the net income slightly decreased to $7.51 billion, but it was still considerably higher than the 2020 figure.

Who Owns Mastercard?

who-owns-mastercard
Mastercard is primarily owned by the Mastercard Foundation, which owns 10.7% of the company’s stocks, followed by The Vanguard Group, 8.2%, and BlackRock, 6.8%. Mastercard generated over $22 billion in revenue in 2022 and over $9.9 billion in profits (net income).

Mastercard Revenue

mastercard-revenue
Mastercard’s revenue in 2020 was $15.3 billion. The revenue increased to $18.88 billion in 2021. By 2022, Mastercard’s revenue had grown further to $22.24 billion. The growth in revenue from 2020 to 2021 was approximately 23.4%. The growth in revenue from 2021 to 2022 was approximately 17.8%. Over the three-year period from 2020 to 2022, Mastercard’s revenue increased by approximately 45.3%.

Mastercard Profits

mastercard-profits
In 2020, Mastercard’s net income was $6.41 billion. The net income increased to $8.68 billion in 2021. By 2022, Mastercard’s net income had grown further to $9.93 billion. The growth in net income from 2020 to 2021 was approximately 35.4%. The growth in net income from 2021 to 2022 was approximately 14.4%. Over the three-year period from 2020 to 2022, Mastercard’s net income increased by approximately 54.9%.

Who Owns Visa

who-owns-visa
Visa is primarily owned by institutional investors like The Vanguard Group, with an 8.62% ownership stake, and BlackRock, with a 7.75 ownership stake. Some top individual shareholders comprise Chairman of the Board of Directors Alfred Kelly, President of Technology Rajat Taneja, and CEO Ryan Mclnerney.

Visa Revenue

visa-revenue
Visa’s revenue in 2020 was $21.84 billion. In 2021, Visa’s revenue increased to $24.1 billion. By 2022, Visa’s revenue had grown further to $29.31 billion. The revenue growth from 2020 to 2021 was approximately 10.4%. The revenue growth from 2021 to 2022 was approximately 21.6%. Over the three-year period from 2020 to 2022, Visa’s revenue increased by approximately 34.2%.

Visa Payments Volume

visa-payments-volume
In 2020, Visa’s payment volume was $8.8 trillion. The payment volume increased to $10.4 trillion in 2021. By 2022, Visa’s payment volume had grown further to $11.6 trillion. The growth in payment volume from 2020 to 2021 was approximately 18.2%. The growth in payment volume from 2021 to 2022 was approximately 11.5%. Over the three-year period from 2020 to 2022, Visa’s payment volume increased by approximately 31.8%.

Visa Transactions Processed

visa-transactions-processed
In 2020, Visa processed 140.8 billion transactions. The number of transactions processed increased to 164.7 billion in 2021. By 2022, Visa had processed 192.5 billion transactions. The growth in transactions processed from 2020 to 2021 was approximately 16.9%. The growth in transactions processed from 2021 to 2022 was approximately 16.8%. Over the three-year period from 2020 to 2022, the number of transactions processed by Visa increased by approximately 36.7%.

Visa Profits

visa-profits
In 2020, Visa’s net income was $10.86 billion. The net income increased to $12.31 billion in 2021. By 2022, Visa’s net income had grown further to $14.96 billion. The growth in net income from 2020 to 2021 was approximately 13.3%. The growth in net income from 2021 to 2022 was approximately 21.5%. Over the three-year period from 2020 to 2022, Visa’s net income increased by approximately 37.8%.

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