American Express Co. is pulling new levers to build its business with small merchants and drive mobile wallet adoption, emphasizing its work with Apple Pay.

The card brand has benefited from positioning itself as one of the few funding mechanisms available in Apple Inc.'s new mobile wallet, said Jeffrey Campbell, American Express' executive vice president and chief financial officer, during an Oct. 15 conference call to discuss earnings.

"There is a real affinity between the Apple brand and what it means to our cardmember base," Campbell said.

Amex has similarly benefited from its participation in the Softcard mobile wallet (formerly Isis), which has been a successful enrollment channel for Amex's Serve digital wallet and prepaid card platform. Both Apple Pay and Softcard enable merchants to accept contactless Near Field Communication-based payments from mobile phones.

Additionally, Amex's small-business play, called OptBlue, has caught the attention of acquirers seeking to increase acceptance of Amex cards. The OptBlue program allows acquirers to adjust pricing to better compete with other card brands.

"OptBlue will make significant strides in the remaining merchant coverage gap we have," Campbell said.

It will take time for American Express to realize the full benefits of OptBlue, but the company is "pleased with the progress we have made with the merchant acquiring community and very bullish about the long-term prospects of the program," Campbell added.

Despite Campbell's upbeat predictions on Apple Pay and its momentum with Softcard, the company has been open about its difficulty gaining traction in the mobile wallet space. Speaking at a Barclays conference last month, Josh Silverman, Amex's president of consumer products and services, spoke of the card brand's troubles with building consumer adoption of a mobile wallet.

Campbell would not comment on what type of deal American Express may have struck with Apple, such as a discount on interchange. In building partnerships with the major card brands, it is believed that Apple negotiated lower rates for Apple Pay transactions.

Over time, Apple Pay could do much to boost use of card payments and erode the use of cash, Campbell said. "That's a very good thing for us and, frankly, very good thing for the industry."

Apple Pay supports payments from Amex, Visa and MasterCard accounts. Discover has said it is working to join Apple Pay, and although PayPal has not written off a partnership, its marketing indicates it views Apple Pay as a rival.

American Express couldn't afford to be left out of Apple Pay, but it remains to be seen what the card brand can bring to the merchants and consumers using Apple's mobile wallet, said Michael Taiano, senior research analyst with Burke & Quick Partners LLC.

"It is not clear what the value proposition is for Apple Pay yet," Taiano said.

Amex's OptBlue program makes a lot of sense, as the pushback on Amex for a long time has been that it does not have the merchant coverage that other major card brands enjoy, Taiano said.

"At this point, it is hard to pinpoint exactly what OptBlue is contributing to spend volumes for them, but it is a positive incremental attribute for them going forward," Taiano added.

Amex's net income rose 8%, to $1.48 billion, in the third quarter from the same period a year earlier. Total revenues net of interest expense increased 6%, to $4.5 billion, from a year earlier.  The increase reflected a 9% increase in cardmember spending and a rise in net interest income.

U.S. Card Services reported third-quarter net income of $889 million, up 14% from a year earlier.

Campbell said American Express will enjoy a one-time $700 million gain when software provider SAP closes its proposed acquisition of cloud-based travel expense provider Concur. The deal is scheduled to close in the fourth quarter of 2014 or the first quarter of 2015.

Amex and Concur have had a partnership for expense management for the past six years, and the card brand has owned stock in the company.

Overall, Amex expects to use its flexibility and various partnerships to continue growth, especially in the prepaid market with Serve and Bluebird, Taiano said.

Last summer, American Express added financial management service tools to its Serve and Bluebird prepaid cards, while expanding the cards' cash reload network.

"Our track record for using all of the levers we have to achieve growth is very good," Campbell said. "It gets tougher every day, but we are committed to using every lever we have to reach those EPS (earnings per share) targets."

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