Payments: card networks and issuers. AXP / V. Run 16 September 2026. Built from AXP 10-Ks FY2023 and FY2025, AXP 10-Q Q2 2026, Visa 10-Ks FY2023 and FY2025, Visa 10-Q Q3 FY2026, Q2 2026 (AXP) and Q3 FY2026 (Visa) earnings-call transcripts, and cited web sources for regulation. Events swept through 16 September 2026; most recent event checked: Visa Q3 FY2026 results and guidance plus role eliminations (28 July 2026) and the MDL 1720 final-approval motion (15 July 2026). Figures in USD as reported. AXP fiscal year ends 31 December, Visa 30 September (one-quarter offset). Not a valuation and not a recommendation.
Visa's next five years rest on three cells. The first is international consumer payments, where debit and commercial volume grew 12% and 13% in constant dollars in FY25 as cards keep replacing cash. The second is cross-border travel and e-commerce, up 12% excluding intra-Europe in Q3 FY26 and priced through international transaction fees. The third is value-added services, $10.9B in FY25 and up 34% in constant dollars in Q3 FY26, sold into the issuers and acquirers Visa already serves (Visa FY2025 10-K; Q3 FY26 call). AXP clearly wins one large cell, US premium consumer. There its Platinum refresh took average fee per card from $92 (2023) to $131 (Q2 2026), and 65% of new consumer accounts come from Millennials and Gen Z (AXP 10-Q Q2 2026; Q2 2026 call). But that cell is 48% of AXP's revenue and is being bought with benefits: Card Member services expense rose 50% in Q2 2026. Meanwhile US Commercial Services has stalled at +3% billed business with flat card counts.
Visa turns growth into margin because each extra transaction mostly costs processing capacity. Network and processing expense was 2.2% of net revenue across FY23 to FY25. Operating margin before litigation held at 66.4% to 67.2% even as opex grew in the teens (Visa FY2025 10-K). AXP's extra revenue carries its own variable cost. Rewards, business development and Card Member services rose from 41.3% to 42.8% of revenue between 2023 and 2025, and provisions added another 7.3% to 8.1%. AXP's operating leverage therefore comes only from marketing and salaries, which fell from 33.2% to 30.8% (AXP FY2025 10-K). The two answers do not split, but the profit-pool view is worth noting: per dollar of spend, AXP makes about five times what Visa makes. What AXP lacks is Visa's scale and freedom from capital.
AXP's weak point is its own balance sheet in a consumer or small-business downturn. It holds $151.8B of Card Member loans, and small business and corporate clients generate 41% of billed business. CS loan net write-offs (principal only) already climbed from 1.7% to 2.6% between 2023 and 2025, and T&E is 26% of spend. A recession therefore hits volume, credit losses and discount revenue together, and the proposed 10% card APR cap (10 January 2026, not enacted) would hit the $17.4B of net interest income directly (AXP FY2025 10-K; Barchart). Visa's weak point is regulatory and slower-moving. The amended MDL 1720 settlement (preliminary approval 9 June 2026) cuts rates 10bp for five years, caps standard consumer credit at 1.25% and lets merchants decline premium cards and surcharge. The DOJ debit monopolization suit is still live, and the Credit Card Competition Act was reintroduced on 13 January 2026 (Visa 10-Q Q3 FY26; Payments Dive; Senate). These trim Visa's yield over years. A credit cycle hits AXP's earnings within quarters.
These six cells account for effectively all of both companies' revenue. Visa's revenue is disclosed only by US versus international and by revenue line, so Visa cell sizes come from payments volume. Each score is argued in the tabs.
| Cell (product x region) | AXP | Visa | Why (one clause, sourced) |
|---|---|---|---|
| US consumer credit and charge | 4 | 4 | AXP USCS revenue +11.3% CAGR 2023-25 with fee per card +27%, gaining premium spend; Visa carries $2.49T of US credit volume, about 2x AXP's US billed business, growing +6% with a rising yield (both FY2025 10-Ks) |
| US debit | 0 | 5 | AXP has no debit product; Visa's largest volume cell at $3.21T, +7% FY25, with the DOJ suit as the key risk (Visa FY2025 10-K) |
| US commercial and SME | 3 | 4 | AXP CS billed +3% with proprietary cards 15.4M to 15.3M; Visa US commercial volume +10% and CMS revenue +17% cc in Q3 FY26 (AXP 10-K; Visa 10-Q, call) |
| International consumer card | 3 | 5 | AXP ICS billed +14% but pretax margin only 12.3% and subscale versus the networks per its own 10-K; Visa international revenue +14.7% CAGR FY23-25 |
| Cross-border travel and FX | 3 | 5 | AXP T&E is 26% of billed (+8%), with FX fees not split out (ND); Visa international transaction revenue $14.2B, +10.3% CAGR, cross-border +12% in Q3 FY26 |
| Network, merchant and value-added services | 2 | 5 | AXP GMNS revenue +2.4% CAGR while the discount rate slid from 2.29% to 2.24%; Visa VAS grew from $7.2B to $10.9B, +34% cc in Q3 FY26 |
Each score is tied to an exhibit in the three tabs. Scores are per cell and are not summed. The lens verdicts are in the Three Answers above.
Normalization: AXP's segments map directly onto cells (USCS = US consumer, CS = US commercial and SME, ICS = international card, GMNS = network and merchant services). Visa reports revenue only by US and international and by revenue line (service, data processing, international transaction, other, less client incentives). It also gives value-added services as an overlapping cut. Visa cell sizes below product level are therefore ND, and US payments volume by product is the size signal. Revenue bases also differ. AXP reports revenue net of interest expense, with cardholder rewards and partner payments below the line. Visa reports net of client incentives, which were $15.8B in FY25.
| Cell | AXP rev (% of total) | AXP growth | Visa size | Visa growth | Margin signal / leader |
|---|---|---|---|---|---|
| US consumer credit and charge | $34.8B (48%) | +11.3% CAGR | $2.49T credit PV; US rev $15.6B (39%) spans all US cells | PV +6%; US rev +5.2% | AXP pretax 19.6%; Visa cell margin ND (company 66.8%). AXP leads on growth and economics per account |
| US commercial and SME | $16.9B (23%) | +7.0% | $1.08T PV | +4% FY25; +10% Q3 FY26 | AXP pretax 21.7% but growth now mostly interest income (+16%); Visa gaining |
| US debit | 0 | n/a | $3.21T PV | +7% | Visa only |
| International card and cross-border | $13.0B (18%) | +11.6% | $24.4B (61%), incl. $14.2B intl transaction | +14.7% | AXP ICS pretax 12.3%; Visa leads clearly |
| Network, merchant and VAS | $7.8B (11%) | +2.4% | VAS $10.9B (overlap) | +23% CAGR | AXP GMNS pretax 51.1% but shrinking profit (-10% in 2025); Visa leads |
AXP by region, 2025: US $56.0B (pretax margin 23.3%), EMEA $7.1B (17.7%), APAC $5.2B (15.9%), LACC $4.2B (21.6%). International revenue grew 10.2% CAGR 2023-25 vs 9.0% in the US (AXP FY2025 10-K Note 23). Visa volume is for the twelve months to 30 June of each fiscal year.
AXP US consumer (organic). The growth comes from price and mix. The refreshed Platinum cards launched late in Q3 2025, and net card fees rose 18% in 2025 and 15% in Q2 2026. Proprietary new cards held at 12.5M in 2025 despite higher fees. The cost is benefits: Card Member services expense rose 27% in 2025 and 50% in Q2 2026. Management says benefits cost growth should slow and fees should keep rising as the refresh is lapped (Q2 2026 call).
Visa international (organic, with small tuck-ins). The growth comes from volume and processing penetration. International consumer debit grew 12% and commercial 13% in constant dollars in FY25, and Q3 FY26 international volume was +10% in constant dollars. Renewals such as Bradesco show data processing spreading across Latin America (Visa FY2025 10-K; Q3 FY26 call). It costs little to grow: FY26 opex is guided to low-teens growth, and roles were cut in July 2026.
Visa value-added services and CMS. These are sold into the existing client base: VAS grew from $7.2B to $10.9B over FY23-25, and CMS revenue was +17% in constant dollars in Q3 FY26. AXP international. ICS billed business +14% on expanding merchant coverage. Swisscard became wholly owned on 12 January 2026, so from 2026 part of ICS growth is acquired and should be read separately.
AXP sets both prices, the merchant discount and the cardholder fee, because it runs a closed loop. The merchant price is slipping: discount revenue fell from 2.29% to 2.24% of billed business over 2023-25 on geographic and merchant mix and on competitors' capped interchange. Merchant surcharging on Amex cards is rising in the US (AXP 10-Q Q2 2026). The cardholder price is rising fast, from $92 to $117 average fee per card. Visa's route runs through issuers and acquirers. Its yield on payments volume rose from 0.270% to 0.288% over FY23-25, while client incentives rose from 27.4% to 28.3% of gross revenue (computed from Visa FY2025 10-K). Visa is gaining net price, but pays a growing share back to keep large issuers.
For payments companies the critical inputs are funding, partners and technology. AXP funds $224.8B of loans and receivables with $152.5B of customer deposits and $56.4B of long-term debt at 10.5% CET1. Its cardholder value partly comes from cobrand partners, which account for 26% of billed business and 36% of loans (Delta 13% and 21%, contract through 2029). Visa needs no credit funding, runs its own VisaNet processing, and carried $1.5B of FY25 capex against $2.4B at AXP (both 10-Ks). Visa is clearly more resilient. AXP's single largest input dependency is the Delta renewal.
In US premium consumer cards AXP competes with bank issuers (Chase, Capital One, Citi) that run on Visa or Mastercard. AXP is taking share there, per its fee and spend growth. In most countries AXP states that Visa and Mastercard are larger than it by purchase volume (AXP FY2025 10-K). Visa's rivals are Mastercard, domestic real-time and government schemes (the US, Brazil and India are named in its 10-K), and new rails including stablecoins. Visa is responding by building a stablecoin settlement platform and joining the OpenUSD consortium (Q3 FY26 call). Discover now sits inside Capital One (approx., unverified), which adds a third US credit network owned by a large issuer.
US consumer: an APR cap would hit AXP's $12.5B of USCS net interest income; Visa has no direct exposure. US commercial and SME: AXP carries the credit, with CS loan write-offs up from 2.0% to 3.0% including interest and fees; Visa does not. US debit and credit network pricing: the DOJ case, CCCA routing and the settlement fall on Visa. AXP's three-party model is not directly capped, but "downward pressure on our discount rate" follows its competitors' caps (AXP 10-K). International: AXP faces the EU cobrand interchange case (CJEU, KLM) and the Australian review of three-party networks that began in June 2026. Visa faces domestic schemes and RTP.
Premium membership brand plus closed loop (High). Average proprietary basic card spend is $25,453, and 12.5M new proprietary cards were added in 2025 while fees rose 14% (FY2025 10-K Table 5). Rivals spent years on lounges and credits without breaking this. Rewards currency and partner web (Medium). Delta, Marriott, Hilton and BA co-fund the value, but contracts are portable, as the loss of Costco in 2016 showed. Credit selection (Medium-High). The principal-only consumer and small-business write-off rate was 2.0% in 2025.
Two-sided ubiquity (High). $13.9T of payments volume and 257.5B processed transactions in FY25 (FY2025 10-K). Money cannot buy acceptance and issuance at that scale. Rules, tokens and processing (High, but litigated). VisaNet plus network rules sit at the center of every issuer and acquirer relationship, which is exactly what the DOJ and MDL cases target. Services attached to the base (Medium-High). $10.9B of VAS sold to clients already on the network.
AXP: it has no dominant merchant, but its partners are concentrated: cobrands make up 26% of billed business and 36% of loans, and partner payments are rising "particularly in the United States". It has exercised pricing power over cardholders, with fee per card up 12% to 14% a year and very high retention (Q2 2026 call). On the merchant side it is losing price: the discount rate is down 5bp in two years, surcharging is rising, and it will stop allowing surcharging in Australia from 1 October 2026 to match the networks (10-Q Q2 2026). Visa: "a significant portion of our net revenue is concentrated among our largest clients", who can issue non-Visa products on short notice (FY2025 10-K). Client incentives at 28.3% of gross revenue are the price of keeping them. Yield on volume is still rising.
AXP: its inputs are funding, partners and technology. Interest expense was $8.2B in 2025, and deposit pricing competes with banks. Pass-through is partial: fees reprice as cards renew, but partner contracts are fixed for years. Visa: its inputs are technology and people, with no funding need. Pass-through is strong: operating margin was 64.3% in FY23 through the inflation period, and FY26 opex growth is guided to low teens with July 2026 role cuts (Visa FY2023 and FY2025 10-Ks; Q3 FY26 call).
| Cell | Route control | Pocket price | Continuity | Outcome (share / margin) | Confirming KPI |
|---|---|---|---|---|---|
| US consumer credit | AXP direct to cardholder and merchant; Visa through issuers | AXP well above (2.24% discount rate plus $117 fee) | AXP: partner renewals; Visa: settlement and CCCA | AXP share up, margin flat as benefits absorb fees; Visa share flat, margin slightly down (10bp settlement cut) | USCS billed growth vs Visa US credit PV growth |
| International | AXP proprietary plus GMNS partners, subscale; Visa through local issuers | AXP above; Visa at network parity | Visa high; AXP exposed to EU cobrand rules | Visa share and margin up; AXP share up from a small base, pretax margin 9.3% to 12.3% (2023-25) | Visa international revenue growth; ICS pretax margin |
| Network and services | AXP GMNS partners; Visa VAS on its base | AXP discount rate falling; Visa yield rising | Visa high | Visa up and up; AXP flat and down (GMNS pretax -10% in 2025, partly the Accertify gain in 2024) | VAS growth; GMNS revenue |
Tension: AXP grows fastest in US premium, where its pricing power is strongest, yet that is also where it must spend most to keep it (Card Member services +50% in Q2 2026).
1. Balance sheet vs toll road (Major). AXP carries credit and funding: provisions were 7.3% of revenue and interest expense $8.2B in 2025. Visa carries neither. This is the model itself and cannot be closed. 2. Recycled value (Moderate). AXP returns 42.8% of revenue as rewards, partner payments and benefits, while Visa returns 28.3% of gross revenue as incentives. AXP narrows this only if fee growth outruns benefits after the refresh is lapped, which management puts at one to two years after launch (Q2 2026 call). 3. Scale (Major). Visa's payments volume is 8.3x AXP's billed business ($13.9T vs $1.67T). No amount of money closes that within a decade.
Mapping, with R&D ND for both because neither reports it. AXP (calendar year): revenue = total revenues net of interest expense. COGS proxy = Card Member rewards + business development + Card Member services + provisions for credit losses. SG&A = marketing + salaries and employee benefits + other, net. EBIT = pretax income. Visa (fiscal year to September): revenue = net revenue after client incentives. COGS proxy = network and processing. SG&A = personnel + marketing + professional fees + D&A + G&A. EBIT = GAAP operating income, which includes litigation provisions of $927M, $462M and $2,562M. The two companies book customer payments differently: Visa nets incentives out of revenue while AXP books rewards and partner payments as expenses. That asymmetry understates Visa's revenue base, so a gross-basis check is shown below.
| % of revenue, 3y avg | American Express | Visa | Gap | What drives it |
|---|---|---|---|---|
| COGS (proxy) | 49.6% | 2.2% | 47.4 pts | AXP pays rewards, benefits and credit losses; Visa's marginal cost is processing |
| R&D | ND | ND | ND | Not reported by either |
| SG&A | 31.7% | 30.9% | 0.8 pts | Near parity: AXP falling (33.2 to 30.8), Visa rising (30.6 to 31.4) |
| Gross margin (proxy) | 50.4% | 97.8% | 47.4 pts | Business model, persistent in all three years |
| EBIT margin | 18.7% | 63.3% | 44.6 pts | Visa 66.8% before litigation; AXP improved from 17.4% to 19.1% |
| Year | AXP rev $M | COGS p. | SG&A | EBIT | Visa rev $M | COGS p. | SG&A | EBIT (ex-lit.) |
|---|---|---|---|---|---|---|---|---|
| FY2023 | 60,515 | 49.4% | 33.2% | 17.4% | 32,653 | 2.3% | 30.6% | 64.3% (67.2%) |
| FY2024 | 65,949 | 49.2% | 31.2% | 19.6% | 35,926 | 2.2% | 30.9% | 65.7% (67.0%) |
| FY2025 | 72,229 | 50.1% | 30.8% | 19.1% | 40,000 | 2.2% | 31.4% | 60.0% (66.4%) |
Gross-basis check: in FY25 Visa's incentives plus network and processing were 29.9% of gross revenue ($16.6B of $55.8B). AXP's rewards, business development and Card Member services were 42.8% of revenue, plus 7.3% in provisions. Even on the most generous comparison, AXP returns about 13 more points to the customer side before credit. Profit per dollar of volume, FY25: AXP 0.83% of billed business, Visa 0.17% of payments volume (0.19% before litigation). Return on equity: AXP 33.9% as reported; Visa about 52% on average FY24-25 equity (computed).
The most persistent difference is the gross-margin proxy: about 48 points in every year from 2023 to 2025, driven by the Step 1 and Step 2 mechanisms, not by one-offs. AXP owns the cardholder, the credit line and the reward liability. Visa rents its rails to banks that carry all three. Because SG&A is at parity, this is not a discipline gap a new management team could close. It is the model. The cost data confirm the power map in both directions. Visa's power over the system shows up as margin. AXP's power over its customers shows up as fee growth and five times Visa's profit per spend dollar, earned with a regulated bank balance sheet. The one cost line to watch at AXP is the rewards, partner and benefits ratio. It rose 1.5 points in 2025 during the Platinum investment, and management expects it to ease as the refresh is lapped.
| Metric | Threshold | By when | If it hits, it favors | Where published |
|---|---|---|---|---|
| AXP rewards + business development + Card Member services as % of revenue net of interest expense | 41.5% or below (vs 42.8% in 2025) | FY2027 (Feb 2028) | AXP | AXP 10-K income statement |
| AXP net card fee growth | 15% or more | FY2027 | AXP | AXP quarterly earnings releases |
| AXP consumer and small-business net write-off rate (principal only) | Above 2.6% in any quarter | Through Q2 2028 | Visa | AXP 10-Q credit statistics |
| Visa client incentives as % of gross revenue | 29.5% or above (vs 28.3% FY25) | FY2027 (Nov 2027) | AXP | Visa 10-K revenue note |
| Visa VAS revenue growth and cross-border volume ex intra-Europe (constant $) | VAS 20% or more and cross-border 10% or more | FY2027 | Visa | Visa earnings calls and 10-K |
| Visa US net revenue growth after the MDL settlement takes effect | Below 4% | FY2027 | AXP | Visa 10-K geographic revenue |