How American Express UK is looking to crack Gen Z
American Express’s UK boss, Hannah Lewis, sits down with City AM to talk breaking into a younger markets and shaking up its image.
“Do you take Amex?”
It’s a question that has slipped so far into the cultural lexicon there are even memes about it.
Scroll through a dedicated Reddit page on American Express and you’ll find users joking about the type of people who like to ask it: one cartoon shows a shopper deliberately shouting the question so loud the rest of the shop will hear; another offers a “starter pack” of accessories that might come alongside it (a flashy white jeep and luxury handbag make the list).
It is a hangover from a time when an Amex card was a yuppie symbol of status and power in the late 20th century, immortalised as Patrick Bateman’s card of choice in American Psycho.
But fast forward 30 years, and it’s one from which Amex is understandably keen to distance itself. And Hannah Lewis, the Yorkshire-born boss of the credit and payments firm‘s UK arm, insists it’s a world away from reality.
“I think the old world of just having it for showing it off… maybe there’s a population that works like that, but I think increasingly it’s actually ‘look at the incredible things I get with this card’,” she tells City AM at the company’s UK headquarters in Victoria.
Lewis, a 16-year veteran who took over as UK managing director in 2022, has been trying to forge new ground for the payments firm which began life as a US shipping business in 1850.
After the world was plunged in covid lockdowns and global travel was all but frozen, she has swung the UK division deeper into the world of premium ‘experiences’ to try and tempt in new customers: everything from concerts, festivals, theatre and sport. As of today, Amex has even struck a new global deal with F1 to allow users to snap up tickets ahead of sale.
It forms part of a strategy to win both new card users and ‘members’ but also tempt in smaller retailers keen to tap into a lucrative customer base.
‘I don’t think there is a typical customer anymore’
Lewis, a self described “geek” who grew up with a passion for science and “taking the world to pieces and putting it back together again”, is a company person. She joined the firm in 2008 after a brief stint as a management consultant, and a question on her childhood brings a quick precis of the early years before she launches into what drew her to Amex as a manager 16 years ago.
Her task of breaking new ground for a firm with a 130-year history in the UK may seem a tall one. Amex opened its first office in 1896 in London with operations specialising in shipping, money orders, travellers’ cheques, and foreign currency exchange.
It launched the first American Express pound sterling card in 1963 and now boasts some 15 Cards in its stable for both consumers and small businesses.
Lewis’s strategy since taking over in 2022 has been a far cry of her childhood passion of breaking things apart and remaking them. As one of her predecessor’s lieutenants, she says the strategy has been to double down and push ahead with what the company was already doing: namely, break into a new demographics and convince more merchants to accept its cards.
One arm of that has been shaking off the lingering perception of a company reserved for wealthy businessmen and snap up a younger demographic. While people might have an image of a Amex card wielder, she says “I don’t think there is a typical customer anymore”.
“I’m sure people have their own preconceptions of what they think an Amex customer could or would be,” she adds.
“If I told you well over 65 per cent of the customers we’ve acquired in the last few years are millennial or Gen Z, that may not be what people preconceive when they think of Amex.”
Central to its pitch to a younger generation has been the offer of events and experiences. But it’s also rolled out new products to try and tap into an age group more accustomed to buy-now pay-later tools than traditional credit cards.
Its “Plan It” feature launched earlier this year, which allows shoppers to split purchases over £100 into monthly instalments, has thrust it into a £30bn market dominated by still-unregulated firms like Klarna and Clearpay.
Lewis insists it’s not a “competitive” move to eat up the market share of fintechs but about listening to what customers want. She is keen to draw a distinction between the two.
“It’s a bit different to buy-now pay-later. You’re fully regulated. It’s very clear. It’s very transparent. It’s part of your underwriting in the normal risk models,” she says. “It’s actually something we feel really excited about as a feature we can give to our customers, but it’s within that fully protected model.”
She’s more diplomatic than the firms looking to topple the dominance of traditional credit card providers.
Klarna’s founder and chief executive Sebastian Siemietkowski has been keen to put the boot into the traditional players and paint them as the baddies. In a tweet last year, he claimed the challenger version was “fairer”. Does she understand the criticism as they jostle for the same market?
“To be honest, I try not to be too distracted by what [the BNPL industry] is saying,” she adds
Outdated perceptions
But winning consumers is just one front in Amex’s fight for UK growth. The reason “do you take Amex?” has such ubiquity is the perception of lofty fees dissuades retailers from offering it as a payment choice.
The fees Amex charges merchants make up one of its core revenue streams alongside membership fees and interest income. But the perception of prohibitively high fees is another image Lewis says she’s keen to dispel.
“I think there’s, again, some maybe outdated perceptions from a merchant perspective,” she adds. “But essentially, we have a very large, vibrant, growing customer base, and our customers really want to use their cards wherever they can.”
When it launched in 1963 in the UK it was accepted by about 3,000 hotels, restaurants, shops, and hire-car agencies.
It does not provide exact figures on that number now, but it says the amount of shops expanded by 30 per cent last year and it now counts “every major supermarket chain in the UK, including Aldi and Lidl” among that list.
“Amex UK is on a mission to retire the question “Do you accept Amex?” from the UK high street forever,” the company says in its PR materials.
We’re very fortunate that a lot of our customers are in a probably slightly more privileged financial position
However keen it is to shake the image, though, Amex has also been the beneficiary of its typically well remunerated customer base over the past two years.
Lewis’s two years at the top have spanned a cost of living crunch, soaring inflation and sharp interest rate hikes that have squeezed some competitors and triggered a downturn in spending. For Amex customers, the pain has been more limited.
“We’re very fortunate that a lot of our customers are in a probably slightly more privileged financial position and have weathered the storm fairly well,” she adds.
“And actually, what we’ve seen is despite the sort of newspaper backdrop being very doom and gloom, we still see people actually wanting to spend, to grow their spend, joining Amex and being very engaged in the benefits and rewards.”
Default levels have barely budged despite rising interest rates, and the business is in an “overall very healthy position”, she adds. In its latest global quarterly numbers last Friday (it does not break out UK performance), the firm recorded its 10th consecutive quarter of record revenue and profit that topped Wall Street’s estimates.
For Lewis, ignoring the macro pain and political machinations since 2022 have formed a pillar of her ethos in steering the company. We speak two weeks before the budget and she’s either keeping an Amex wish-list close to her chest or has not drawn one up.
“To be honest, I choose not to get too caught up in it,” she says.
“I think it’s a question of whatever comes on 30 October is what comes on 30 October. And that’s just the dynamic that we need to operate in.
“But to be honest, my next few weeks are much more focused on the London Film Festival and the restaurant festival and an announcement next week, which is going to keep us all pretty busy right up until then.”
While some firms might be fretting, two years of period of macroeconomic turmoil seem to have settled the nerves.
“We’ll control what we can control,” she adds.