After taking a body blow from Sapphire, Amex is reaping the benefits
While American Express initially lost customers after JPMorgan Chase introduced the popular Sapphire Reserve premium card in 2016, the firm said Tuesday it's seen a 60% increase in growth in Platinum accounts after it added new benefits and perks the following year. More than half of new Platinum card customers are under the age of 35.
"It actually did us a service," Doug Buckminster, president of Amex's global consumer services group, told investors at a conference on Tuesday. "It really intensified interest in the premium payments category. Suddenly everybody was talking about high-fee credit cards that have lounge access and rich benefits."
With Sapphire, JPMorgan was taking aim at Amex's Platinum accounts and the lucrative market for high-rewards cards. Amex has responded by spending more on marketing and refreshing many of its most popular cards.
Amex is targeting younger adults who flocked to cards like the Sapphire Reserve because they offer perks tied to travel and dining. The firm has also introduced "Pay It, Plan It," which gives customers options for paying off card balances, a feature that was copied by JPMorgan and Citigroup Inc. in recent months.
JPMorgan is "staffed by a whole bunch of Amex alums who at least know our historic playbook and I always assume are 18 months behind whatever feature or functionality we introduce," Buckminster said. "They're going to show up with a knocked-off version." JPMorgan didn't immediately respond to a request for comment.
Buckminster declined to say if Amex is developing a product for customers whose spending habits lie somewhere between its Platinum and Centurion cards. The top-tier Centurion card has an initiation fee of $10,000 and a $5,000 annual membership.
"I love the lineup that we have today, but there's always room to look and say, Do you have the segments that you want to serve covered very well?" Buckminster said. "That's an ongoing process for us both in our proprietary and our partner portfolios as well."