Wells Fargo to Issue American Express Cards
Adding to their long history together Wells Fargo and American Express have added to their partnership to allow Wells Fargo & Company to issue new credit cards on American Express' network.
Wells Fargo and American Express' relationship goes back to the founding of both companies. Henry Wells, William G. Fargo and John Butterfield formed the American Express Company in 1850. The original American Express delivered packages, money and other valuable goods. Two years later during the California Gold Rush, Wells and Fargo decided to form another company, which they named after themselves, in order to provide banking and express delivery services to the West Coast. Butterfield continued to operate the American Express business in New York, yet Wells and Fargo served as the first two presidents of that company.
Now the two are partnering again for this credit card offering. Wells Fargo hopes this partnership will boost its business in the credit card issuing market. "We are delivering on our strategy to expand our credit card business," said John Stumpf, chairman and CEO of Wells Fargo, in a statement. "Our goal is to offer Wells Fargo customers a suite of cards that help them meet their financial goals. We're proud to have American Express as a partner in this effort -- a great company with a proven brand for customer service."
While Wells Fargo is the nation's fourth largest bank by assets and is the largest originator of mortgages, small business loans, commercial real estate loans and auto loans. However, its credit card portfolio is small. Wells Fargo currently only offers a handful of Visa branded credit cards. Its offerings include a platinum card, three rewards cards, a rewards card geared to college students to help them build a credit history, and a secured card to help a cardholder establish a credit history.
As part of the agreement, American Express will work with Wells Fargo to develop a range of credit card products that will leverage its Partner Advantage capabilities and services. Some of the cards may include experiences, exclusive benefits and special offers. Wells Fargo also plans to use American Express' LoyaltyEdge service to create its own loyalty program where Wells Fargo customers can trade in points for merchandise and gift cards.
The company plans to start targeting its own customers first to offer them the new American Express credit cards. "We want to give the customers who already carry our card -- and the ones who don't yet -- greater rewards and benefits for having a Wells Fargo card in their wallets. The breadth of our offerings, our strong retail network and the power of this new partnership with American Express position us well to continue to deliver compelling choices and experiences to our customers," said Avid Modjtabai, head of Wells Fargo's Consumer Lending Program, in a statement.
To do this, it will conduct a pilot program for the new cards. The pilot will take place in specific U.S. markets during the third quarter of 2013. After the pilot, Wells Fargo plans to roll out the cards nationwide during the first half of 2014. Customers will be able to apply for the cards in a variety of ways, including online, via mail, via telephone, or in person at one of Wells Fargo's branches.
American Express also looks forward to the opportunity to expand its business. "Given the fact that two of our founders were Henry Wells and William Fargo, this partnership is especially significant to all of us at American Express," said Kenneth I. Chenault, chairman and CEO of American Express, in a statement. "Wells Fargo is an outstanding addition to our global network of card-issuing partners. We look forward to starting a new journey with them and to delivering premium value and service to Wells Fargo's customers."