American Express Company (AXP) Earnings Call Transcript & Summary

All right. Welcome back, everyone. It is our 2 p.m. session on day 2 of our summit. And I am very delighted to have the opportunity to host for the first time Anna Marrs, the President of the Global Commercial business from American Express. Anna, thanks for joining us.

Thanks for having me, Lisa. It's great to be here virtually.

Yes, exactly. Hopefully, next time in person. I guess just to start, before we dive into the Q&A, well, wait, one housekeeping item for the audience, as always. But just as a reminder, I am taking -- Anna is taking questions from the audience. So if you have them, send them to your ask a question, in your webcast, I will see them, and I will just layer them in throughout the discussion. So feel free to just send them in whenever you got them, you don't need to feel like you need to wait to the end for Q&A session. So before we dive into the Q&A, though, Anna, did you have any kind of opening comments that you wanted to start with?

Yes, sure. So I thought what I could do is just tee a couple of themes that I think you might here kind of reiterate as we get through the conversation today, just to describe Amex's global commercial services business, what's happening today and where we're focused going forward. And I think, as I said, you'll see some of these kind of come through as we go through the conversation. And the first big theme is about how we're firing up. We think about our core engine, that core card business. And there's many things that we've been doing to drive momentum there from how we're acquiring new card members to how we plan to retain card members after the crisis to driving billings growth across different categories. And we're very focused on after COVID, getting that core engine reignited and really building momentum through this year and into next. So you'll hear a bit as we go through, I think about that core card franchise, as you'd expect, it's American Express after all. But second, I want to probably talk about how we're scaling a number of next horizon initiatives across the GCS. We're really looking to accelerate growth into 2022 and beyond. And so there's new products, new capabilities, new services. Both that relate to the card, but also importantly, beyond the card, as we call it, it takes us into the next phase of our growth. So bottom line, we think it's an exciting time to be in B2B payments, exciting time to be in GCS at Amex. And if we get going, we can tell you more.

All right. Great. Well, Amex is probably best known, I suppose, for its consumer affluent card franchises like the flagship platinum franchise. But in fact, your commercial business contributed nearly half, 47% to 49% exactly, of Amex's total proprietary build business over the past 3 years. So overall, how would you describe maybe just your -- the strategy and kind of competitive positioning of the commercial business?

Yes. And what you say is true, and it was a surprise to me, too, when I first got the call about American Express, the commercial is about half of Amex. Amex is really broad franchise to, ranges from serving really small businesses with traditional cards, all the way up to these more complicated payment solutions for some of the biggest companies in the world. And another surprise, I think, for people to get to know the GCS business is that B2B spend, so businesses buying things from other businesses are the majority of the volume here. So pre-COVID across global commercial services, 70% of our volume was B2B. And in the SME segment, which is the biggest part of GCS, 80% of all the volume was processed, even pre-COVID when T&E was big was B2B payments. So when you think about it, I guess it's very obvious that if we fire up that core card franchise I spoke about and reaccelerate into the next horizon, we're very focused on that B2B payment volume. And just -- you talked about strategy and then asked about competition, and I'll just touch on both. So on strategy, first thing, absolutely laser-focused on making that core engine up and firing and building momentum. And here, we're using our usual tactics, the things we're known for, about how we're acquiring new cards. But we're also evolving our value proposition to get our customers put more of that B2B spends on card. And one of the things that I kind of model, I was amazed by is what a great working capital tool a card is when you're a small business. So we've been really focused on making sure that customers understand that and they maximize the use of that card for all their purchases. And in a way, COVID actually here gave us a bit of an opportunity. We talked a lot about something we call value injection that we roll out to card members, who were unable to use airport lounges, for example, last year. How do we embed more business-focused benefit so that customers use it for more and more of their spend. And we have some really good success on categories like shipping and wireless and home electronic equipment, like all the stuff you needed to make it through last year to get our customers to use the card more B2B spend. And I think the thing that I like best about those value injection initiatives is that it's stuck. So we did see a good take up, 75% of our business platinum card members used those value injection benefits last year. It's consistent through this year, and we're seeing a lift in spend on those categories. So that's the first thing. Part of our strategy, how do you maximize the B2B spend the card? But then we're into the next horizon. And there's 2 areas where you'll see more and more activity from us. And the first is what I will call embedding. So how do we get all of our payments products into partner ecosystem. So we kind of meet the customer where they are. And this is a trend, like most small businesses, actually, large companies as well, don't want to think about payments at all. They want to think about how they run their business. So through partnerships, we've been embedding our payment capabilities into these ecosystems. And so think more traditional players like an SAP, Ariba or Concur, but also fintech partnerships with companies like Tradeshift and Coupa. Customers love it, and it's a way of getting volume into the ecosystem and in helping scale. But then the other pillar of the next horizon that we're focused on is about building. And here, there's B2B capabilities beyond the card. How do we put more of that on the shelf for our customers. AP automation is an area where we focused, we bought a small AP automation software company a couple of years ago. We split it up, called Amex One AP and we're rolling it out. And then another beyond the car build is an SME with B2B payments and working capital, an acquisition called Kabbage, right, which we bought late last year, which has enough customers now is in pilot. So core card, next horizon and the next horizon is embedding and its building. So it's a big agenda, but it's one that we can already see flowing through some of the financial results we shared for the first quarter. Now competition to touch on that. There's a lot out there, right? We're very pleased with our starting competitive position, right? We always talk about back cycle, the #1 small business card issuer in the U.S. We have raised just with 60% of the global Fortune 500. But as you will have heard about through today as a very dynamic landscape. We're not the only ones who think B2B payments is a growth area. So both in terms of traditional banks and all the competitors that usually compete with issuers, networks. We also see some lively, I would say, fintechs who are nipping at our heels. So that's the agenda that I described earlier, has to have a good dose of innovation in it. If we're going to grow at the market in the way that we think we deserve to.

All right. Well, let's drill in a little bit on the U.S. small business franchise. It's one of the strongest franchises of Amex, where you've got -- you're the leading issuer, as you said, you're right, about a 3x margin, actually. So it's not even really close. So talk about what's unique about the value proposition of Amex? What you can do with your unique model, the closed-loop model and the other kind of services you can wrap around that, that has enabled you over time to capture such a strong leadership position in small business?

It's really -- the question really tees up what a special franchise it is. I absolutely agree when I first got to know Amex and I understood the depth and the competitive position, it's quite special, and it's a lot to those preserve and grow. But when I think about the drivers of that, I think it's part of it, that's a bit of a return to scale, like the depths and the depth and breadth of the business that becomes self-reinforcing. What's driven that? When you look at it over time, it's a nice set of diverse products. It's not just a card, but it's also beyond. Great distribution capabilities, great digital marketing and sales capabilities and then also the Amex brand. So that once you are that large and small business cards, there is some kind of ongoing distribution return to scale that we continue to see in that franchise. But then, you mentioned it, the closed-loop is what's enabled us to build this business, and it continues to play a big role. If you think about what you want as a small business owner, when you're using your cards, you need to pay for and in some cases, finance what you need to grow, you want limits. You want spend capacity. You want to know that we're going to scale with you. And the best-in-class risk capabilities and controls and spend enablement that comes out of our closed-loop data has been a big source. It will be a big source of what helps us grow. And then also in that closed loop, you want to be able to use that card for more and more suppliers. And we have within Amex, a great system, whereby if you want to use it for a supplier who doesn't accept. We have a good system with our merchant colleagues to go sign us that nonaccepting supplier and build that kind of virtuous circle, that is the payments business. So it's really those 2 things that have come together historically, and we need to continue to invest and build on to preserve that quite special position.

Okay. Well, perhaps counterintuitively as well. The U.S. small business franchise has been one of your best-performing segments throughout the pandemic in the last year. In fact, in 1Q, which you just reported a couple of weeks ago, it was the best-performing segment within Amex volumes more or less flat year-on-year despite the fact that, obviously, January and February, we were still lapping prepandemic time frame. So what has driven the outperformance? That's got to be counterintuitive to many folks like why, how has it been possible that, that small business segment has outperformed through the pandemic? And what do you expect in terms of performance as we reopen this year? Will that persist?

It's the right question because I have to confess that when COVID first started to hit early last year, the first thing noticed it's a public health crisis, but then the next thing we all notice is that it's a small business crisis, right? I live in Manhattan, so many businesses were closed during restrictions, lockdowns and real concern about how small businesses would survive this pandemic. But what you say is absolutely true that our -- here at American Express, our SME business has been the most resilient, particularly in the U.S. Globally, SME spending for us has now recovered to prepandemic levels. In fact, it was up 1% in March versus March 2019. So like before we ever thought of COVID, our small businesses are spending more than they did in that pre-COVID era. So the question there is like, well, okay, why is that? Like, how could that be? And I think there's a few things. The first is when you look at our business, about what our small businesses spend on, right? So SMEs, which are 86% of my business. It's got the highest mix of that B2B spending I talked about. We call it goods and services broadly in the Amex reporting. And global SME goods and services spend was up 7% in the first quarter, that's versus the year before, but up 12% versus 2019. So you should stop and say, wow. So small businesses in our franchise spent 12% more in the first quarter of this year than they did before anyone had ever heard of COVID. And we're seeing this as they begin to restock, hire up, advertise more. And so it's really coming back because of the category of the spend is less T&E centric. I think another reason is a relative -- reason for the relative resilience is the diversity of the business we had coming in, right? So we've talked about this before. The industry distribution of our small business franchise is very broad. And the highest concentration are in industries like construction, professional services, utilities, contractors, health care, like things that when you look around the world, you know that even in COVID, these businesses have thrived. So the diversity of the segments and the fact that it isn't the small shops, the restaurant around the corner has led to more resilience. And then the last thing which you just couldn't not talk about that I think drives this resilience is the depth and strength of the U.S. economy and the effectiveness of the stimulus. So I'll give you a couple more numbers that I think are quite interesting. In April, U.S. SME billings across both goods and services and T&E, in April, it grew 55% year-on-year. Okay, like that's where, but that's, of course, included April last year, which was a terrible month. But it's up 6% over 2019. And within that, this is quite an extraordinary number that I think reports -- sort of points to both resilience and growth in this business. The U.S. SME goods and services grew 18% in April over 2019, which is quite amazing, like small businesses buying non-T&E things that needs to grow up 18% versus a preCOVID world. And what I have to say, I guess, this ongoing billions reported incomes all the time here at Amex. And the number that I tend to look at first is U.S. SME spend on advertising and marketing. This is a really interesting indicator also business confidence, like a small business are spending on advertising that means they're investing behind their business in the future. What we've seen over the last few months is that small business spend on marketing is up 30%, just over 30% versus 2019. So they're investing. And when you dig into what -- where they're advertising, I guess, it's like -- it's not a great mystery, is online, right? So Google, Facebook, Amazon, they've increased their share of advertising spend in small businesses as they make this pivot. So I agree with you back in sort of March 2020, I don't know if I would have bet this degree of resilience. It comes through a number factors, a number of factors, but it's real. When you look at those advertising numbers, like small businesses, they're planning to continue to spend, continue to invest behind building their business. So it's been -- what a surprise but a welcome one.

Yes. Good. I wanted to follow-up in your opening comments, you commented a little bit on the competitive positioning of Amex in small business. But I wanted to drill in a little bit more on the value proposition that Amex brings a small business compared to the traditional bank who might be trying to also get into cards and the fintechs which, of course, over the last couple of days, we've heard plenty out of some of the more challenger group that are starting to kind of come in with this sort of neo-bank or digital banking type of model. So how do you think about Amex's positioning and like how do you compete against those 2 groups, which is -- which kind of come at it from different lenses?

Yes. It's definitely a dynamic competitive space, and there's no lack of competition. But the way that we're competing is both through leading into our historic strength and building beyond, right? So the core kind of wedge of our business is the card franchise. We're great at building value propositions here that work with customers. We're great at distributing these products to new and existing customers. We're great at enabling spend capacity, right, to drive billings beyond even what a competitor could offer. So that card, making sure that core is strong and resilient that is the wedge of our strategy and we'll always compete, really leading with that. But then what I can't get over is the beyond the card in that broader B2B payments and working capital kind of need from the customer. There's a lot of things that are quite close in that we are building. AP automation as an example. Okay. It's software. It's not a charge card. But when you hook it into a customer, there's a partner platform or on our own, billings goes up, right? You can get that more recurring billing and the relationship becomes much more sticky. And then it's broader, more banking-like products, like short-dated working capital, transaction accounts. That's a place that both through kind of our own technology builds and acquisitions we're broadening. And we're broadening both as a defense, right, to make sure that people can't just bolt-on a charge card and pick us off. But also to provide more to the customer. And the Amex brand as a key attribute in the whole kind of primacy war I think it's really important. Our customers say they trust us, they like us, they want to do more with us. That isn't true for some banks. It isn't true for some fintechs, they haven't heard us. And it really is a core competitive strength that we leverage as they compete against those different types of players.

You mentioned the AP automation. You also earlier mentioned the acquisition of Kabbage. Last year, actually just prior to the pandemic, and you have completed a fair amount of the integration of Kabbage and started rolling out some of Kabbage's products and services to your U.S. small business customers just within literally the last few months. So I know it's early days, but can you just kind of recap the strategic reasons why you decided to make this acquisition and talk a little bit about how the integration in that product rollout is progressing.

Yes. Great. Looking back to March 2020, in addition to perhaps not seeing the resilience of a small business franchise that would come out of this, I didn't think that we would be actively on the acquisition trail and seeking to integrate 300 Atlanta-based staff, virtually. There's been a whole lot of firsts for all of us over the last year. But the Kabbage idea, the concept was, again, the card is the wedge. We have some great cards here at American Express. Customers love them. Our NPS scores are industry leading, all that. But for the customer, sometimes a card and a sort of 30-day pass back later capability isn't all that they need. They want a broader set payments. So okay, we let you pay people with your card, can we also let you get paid? Okay. Sometimes you can pass back later on a pay over time future, but what about the business financing product set. And what Kabbage had was a digital-first, very easy-to-use multiproduct platform. They had a team of people who've built this, especially for small businesses. And so the idea of taking that platform, making it industrial strength and then beginning to roll it out to our customers to build ever more primary relationships that was the acquisition case, and that's what we've been standing up. And we have it in pilot. We're going to a full launch in the next couple of months. We're quite excited. And we're really excited to take this to our small business card members, but also to all the small businesses across the Amex universe. We did actually many more than just around 3 million small business card members, merchants, very relevant for our merchant base, many -- consumer card members are actually small businesses. And so it's really a chance to get more easy-to-use integrated product on the shelf to help us build be on the card. And it hasn't been super easy since it's all done virtual. And it's -- you can't really have the kind of close party that you might have had preCOVID, but so far so good.

Well, more broadly, talk a little bit about M&A. I mean, Kabbage, yes, AP automation prior to that. And as you're looking to -- looking at your overall investment strategy in the commercial business, what's the role of acquisitions and kind of what areas do you find the most interesting?

I think I'm going to end up sounding a little broken record now about the card and beyond. So we have great cards, industry leader for small business cards, industry leader for corporate cards. It's when you try to go beyond that we don't always have the skills in-house. We don't always have the products on the shelf. So we've been -- as we've executed on that strategy of the next ring of that bull's eye beyond the card into broader B2B payments and working capital, where can you find bolt-on capabilities that help you get there faster. That was the logic for acompay and AP automation. It's very much a logic for Kabbage, and that's as well the key focus as they kind of move into the post-COVID era. I think the other thing, though, that we are doing more of in commercial and that we're quite excited about is partnerships and alliances. And whether that's our kind of co-brand partnership with Amazon in small business in the U.S. and now rolling out internationally. In fact, our partnership with Amazon Germany just launched today. So we are going go global with Amazon or the kind of partnerships we're doing with Coupa. There's just a lot of getting the card integrated, getting payments inputs integrated that will help us make that progress faster. So there's kind of spectrum here between full M&A and partnerships, and it's paying a greater role in our strategy.

Well, you've commented a couple of times on AP automation, of course, as one of the big expansions. And yes, we did a deep dive in the SMB world last fall. And one very striking, data point, I think, was that the vendor payments, the B2B payments, vendor payments for U.S. small businesses, by dollar value is the same size or larger than the entire consumer to merchant payments market and far, far, far less digitized. Of course, many of these payments still made with checks. So holistically, how do you think about your strategy to help drive the secular digitization of vendor payments?

Yes. That was a great report. I think it's kind of amazing that I guess because it starts the paper check within a business like it automatically is less sexy than a consumer to merchant payment. But it's huge. And even before COVID, you couldn't believe that 10 years from now, it was going to stay the same, right? The checks being such a -- 50% less in the U.S. the payment small businesses make in the U.S. being via paper check, you knew that it was going to change, right? Just how could it be the most efficient thing, particularly in a world where cash flow is what matters to a small business, like it's slow as a payment mechanism. So we -- I thought that -- I thought it was a very true pre-COVID, and we definitely saw an acceleration of that trend in COVID. And we all have, I'm sure many companies have talked about that today. And we talked about that -- about our customers talked about that. I need to just automate this. All the paper needs to go away. In the heat of COVID and beyond, people see the potential there. And the one thing that I don't know how much you guys talked about today that we think will play a meaningful role in that digitization of vendor payments is virtual cards. So that is at the heart. We have a full file solution with the virtual cars at the heart of our AP automation volumes. And we think because it's understood by the customer, it's broadly accepted, and we think it's played a big role in the securitization of those vendor payments. We have some interesting partnerships in that space, like we have this partnership with Tradeshift, a thing called Tradeshift Go. Very nice to experience. The small business can download an app, they can quickly issue a single virtual card that can be e-mailed to the supplier. Reconciliation is super automated, and each panel could be tied to an invoice is always a pain point. And lots of people say that virtual cards are going to grow more quickly than many other payment types, but it will double over the next few years. And we think investment in that space will continue. So there's many -- when you bet some thing as big as that, 50% of small business payments being on check. It's not going to be one rail. I think there's going to be several rails. But we think automation will play a role, we think virtual cards will play a role, and it will be a big part of our strategy.

Yes. And on virtual card, what are some of the advantages for a small business of using a virtual card over ACH or debit or some other type of push payment choice that they might have? Why do they end up gravitating toward virtual card?

I guess we're kind of selling the thing that we're always selling, which is rewards and benefits back to the payer. That's the aspect of the benefit, depending on the ease of use of the platform, reconciliation is easier. It's an understood mechanism that they use many other types of payments, and it can be really turnkey automated, easy to reconcile solutions. I think that we're all looking at all the different rails in this space. I can't say when I look at our AP automation volume, we go to a small business or a medium-size and say, give me your full file. 100% of that won't be cardable. There'll always be a portion that the vendors -- suppliers that don't accept the card, ACH will play a role. And for some time, check will still play a role. But what we do see when we go to a small business, and we take on their full file with the amount that then gets carded as part of that total portfolio meaningfully increases. So it is preferred when it can happen. And if you can do full file now we all help manage the rest.

So just a quick follow-up question on this AP because I've actually gotten this question a couple of times from investors. So you own your own AP automation product, of course, but then you also talked about partnerships and alliances. So how do you balance those things? How do you think about, yes, making sure you're in all of the AP automation offerings out there, but then also promoting your own solution?

That's one of my questions when I joined Amex and got -- went from banking to payments and gotten to this world where things are growing, right? The actual -- the tide is rising, the boats are floating higher as payments digitize. And so we've been in the world for the last few years where you can coexist very happily with multiple partners and proprietary solutions, and we find a way, right? So our sales colleagues will go out. We'll talk about Synaptic to a customer. We'll talk about One AP, we'll find a solution that works fast, we'll implement it. We like all of them because one thing that I said it's always true regardless of the solution is that the card volume goes up and it remains much stickier in terms of the ability to swap out, which are integrated into their AP environment. So today and probably for the next decade, while that check is going away, competition is real. Like we can all work together. And we see that -- I don't know, I'm sure you guys have talked over the last couple of days about the Bill.com Divvy announcement. But the similar thing, like Divvy is a partner. We've been an early investor in Divvy, in our ventures unit, they'll continue to be a partner, and we've innovated together, now it's Divvy. They're also looking at corporate cards. We like that, a little bit less. But of course, we're going to keep working with them in the AP space. So there's just so much growth out there. There's so many better solutions and the check that is still the dominant rail here. But I think will be some time before it's going to be winner it takes all, maybe never given the quantum as long we're talking about.

Okay. Switching gears a little bit out of the U.S. and focusing a bit more on the international business. I'd say when we did our prelaunch work on Amex, this was one market that just popped out as one of the biggest potential markets for growth for Amex because we've got such a strong domestic small business franchise, but then the adoption of cards internationally in small businesses is a lot lower. So talk a little bit about your international small business business. It's only about 6% of Amex's built business, but Doug was growing pre-pandemic, like I said, in the double digits. So what are your focused markets and what's your strategy for growing that business?

Yes, when you say it was true is the smallest of our externally reported segments at Amex, but also the most rapidly growing. We are growing at 16% pre-pandemic. And we loved it because we also had less than a 5% share of that opportunity outside the U.S. And so we're really focused on continuing to grow. Then, of course, we hit the COVID challenge. We've obviously talked about many times through the day, small businesses shuttered, staff members furloughed. And like the U.S. stats, I was citing earlier, small businesses in our international franchise are actually back today to pre-COVID levels of spend. They're basically flat to 2019 levels in March and April. But then you kind of peel this onion, within that, you've got some different trends by country. And it roughly correlates to the kind of what we're seeing in terms of GDP growth coming out of COVID, but the U.K. and Japan, as an example, have really rebounded. We like truly -- I don't know if it's quite a weak, it was like down a bit for a while, but their rebound is steep. Whereas some other markets, Australia, Canada and Mexico are still below 2019 levels. And when I look ahead, this many moments, when you get through a crisis like COVID, we sit back and say, okay, is the strategy still the strategy. But when you look at the trends that are driving the international SME growth pre-COVID and what's emerged post-COVID that plan is still the plan, where we're pushing to get back to pre-COVID levels of growth. And we think that we can do it given the penetration starting place, right? There's just a lot of growth still to be had.

So talk a little bit about when you're developing one of these markets in one of the countries that you highlighted, what is the competitive dynamics like? Or maybe more broadly, what's required to really build the business? Because if you're in an environment where almost like there aren't a lot of competitors maybe it's more about how do you build -- accept merchant acceptance or even kind of get a small business owners head wrapped around the value proposition of using a card, like how -- what's -- how do you build these businesses?

Yes. It actually is not a radically different playbook than what we ran in the U.S. Maybe we have to go back in time a little bit to think about how it developed here. It's like or how it developed in -- how it's developed in other countries take U.K. maybe as an example, we can run kind of close to home. So the original Amex small business branches in the U.S. was built out of the consumer base, right? It was the promoters FICO that was the most important data variable. And then you built it on more business focused features and benefits over time. And you saw eventually there were different businesses eventually, right, as they have evolved. Then you find a whole different set of suppliers. It's not about making sure the restaurant accepts, it's making sure that FedEx accepts, right, because you want a big category or Google, right? You put a lot of your advertising online. And so similarly, it's the same. So it starts with consumer and a real tight partnership on marketing and things like alliances, so like the British Airways, small business, co-brand in the U.K. with second after the British Airways consumer card. And then acceptance, right? And really being clear, it is a kind of 80/20 kind of dynamic where the largest B2B suppliers make up a good chunk of the spend. As we're using our closed-loop model, we go sign them up. And then from there, it's about thinking of that next wave of alliance is it's more business focused. Amazon is an example and now live in both the U.K. and Germany. But really finding those more B2B-focused distribution partnerships as well as our own sales. In the U.K., actually, mostly in Brighton, it's not the U.K., we have hundreds of salespeople who sell small business cards, who explain the benefits and explain that the more spend you put on as a small business. It's a great product, right? You have float. Doesn't come out of your account right away, you pay us back in an average of 30 to 45 days and you get benefits, right? You can use on your business or take your family on vacation when that's the things again. And it's the same stuff. Maybe the model isn't as mature. The competitive set, in some cases, isn't as mature, although, of course, we have competitors in every market. But it's a fairly well-known playbook, but it's effective.

Yes. And on the competitive set, do you find, yes, competitively, these markets are -- I mean in some ways, like, I never want to say like easier, but perhaps less well-developed or less competitive than you've seen necessarily in the U.S.?

So everyone is different. The banks are always there, this is in the U.S. with their credit card, charge card products, like in the U.S., maybe even -- maybe it is a little less focused even outside the U.S. They tend not to focus on small business cards to the same degree. So that gives you a bit of a competitive kind of opportunity. But then like in the U.S. is also local fintechs. There's plenty of people trying to figure out how to digitize payments, how to take advantage of that large commercial B2B spend opportunity. There's less paper checks today. So that's really a U.S. feature, but there's plenty of fintech innovation around the world as well. And that represents both a challenge, but also opportunities to partner. So as an example, as we've built out beyond the card lending products in Canada and Australia. We've partnered with the fintech. So it's a bit of good news and bad news. But every market is different. I wouldn't say it's wholesale less competitive. It's just different challenges and opportunities depending on the country.

All right. Well, coming back to maybe the trickiest one. In the current environment, your corporate business, where -- which was, again, just to level set everyone, and I know Amex has maybe -- you guys have been saying this, like a broken record for the last 15 months. It was only about 9% of Amex's total billed business in 2019, even though, of course, many people know Amex as a big corporate card. It's actually a relatively small portion of your business, but of course, has been down in the past year because of the pullback in corporate T&E. So how should investors think about the recovery trajectory for that piece of the business?

Yes. Every time I get asked this question. First of all, we talked about SME first. That's because its the lion's share of our business. It's recovered. It's great. And then we go to large corporate and T&E. And then we do it like this virtual meeting, which makes the point. It hasn't come back. We haven't even traveled across town to see each other lease, they don't even have like an Uber fare to expense for this meeting. But it's been -- clearly been the largest impact of COVID, right? And you said it's not a giant number for Amex overall, but pre-COVID, what our largest customers spent with Amex, was about -- was much more T&E skewed, right? Half and half-ish T&E business services. And so when COVID hit, that T&E almost use the word collapsed, right? We're not going anywhere, and people just haven't been putting spend on their cards. In fact, I've had people reaching out and saying, you should send a note about people -- a former colleague yesterday told me he used Amex for the first time in many months, his corporate Amex, and he's like, I forgot the pin. Can you send out an e-mail, reminding us of the pin because now -- I might use -- might spend T&E again, I need a reminder of the pin. So what do we see ahead? I think that's the question. So overall, for T&E spend at Amex, we're saying that it will recover to about 70% of Q4 2019 levels by Q4 2021, by the end of this year. But that assumes the consumer will recover faster. Large and global is below that 70% by the end of the year, I'm very confident in that. And small business, interestingly, is somewhere in the middle. So we're seeing small business T&E already going through that kind of Nike swish inflection on T&E, but large and global, not. So it's definitely going to be a slow build back. So what do we do in the meantime? The first is there are some of our largest companies that are traveling and spending. They're more health care, people like Verizon, like tech and telecom, they're recovering faster, and we support those customers. The next is about how we penetrate more of our B2B or supplier payment solutions into those customers. I talked about some of the integrations like into SAP, Ariba, Coupa, we'll do more of that, capture more large global T&E, non-GNS spend on all of our acronyms. But I think the third thing that I'm quite interested in as we come out is what does that return to corporate travel like and how do we work with our customers to innovate on the return to travel? And the kind of typical conversation, a large and global CFO had with me, he's like, well, it was delight that my T&E line disappeared. I love saving all that money. But looking ahead, there's a portion of my colleague base that's less productive, right? Those that go out and build relationships. So how do I get them on the road in a new, more optimized, more efficient way? More efficient for the traveler, in terms of booking, expense filing, integrating into those core productivity systems. But also from a measurement perspective, I don't want my T&E to build back to 100% of COVID levels next year. But I wanted to be in the business where I know it can make me productive. So we're trying to make lemonade out of the lemon of large and global T&E spend and look to innovate there. And I do think there is some interesting opportunity that we as a leader, can embed more and add value, right, as our large and global customers T&E spend begins to recover.

Well, I can tell you that for today, I have my whole team here. We're all together for the first time in over a year. And so there's at least a few Uber trips coming back on those corporate cards.

You guys should go out for dinner and have a nice bottle of champagne to celebrate the fact that you moved from COVID.

We're doing our best. We might be in the small business category, but not...

I know it's bad when -- like I've had a few work dinners and someone who gets up Amex may show it to me, like, I am going to use this now. Yes, some day it will be normal again pretty soon, if not maybe in the next few months.

But talk also about the strategic value of these big corporate relationships and the big corporate T&E relationships to Amex because I think this is one aspect of sort of the interconnectedness of Amex that maybe people sometimes underappreciate, like, for example, the -- many of your big co-brand relationships are obviously with travel companies. And so there's sort of these interconnected aspects. More strategically, how do you think about the role of the big corporate T&E relationship with that business, even if it is small and a little bit under pressure, but how do you think about its strategic value more broadly to Amex?

Yes. So I talked about -- when you get through a crisis like COVID. So it's low point, American Expresses' global billings were down 46% year-on-year. And that was our COVID-like trough. And you as a management team, is take a step back and say, okay, what's the same now coming out of this and what's going to be different? And while I quickly arrived at the view that the growth path in SME, given some of the trends that you talked about, like the digitization of payments in the check, our starting position, it was a hold the strategy, try to accelerate story. I did ask myself this large and global T&E business, it's going to take a while to recover. It was clear early on that corporate travelers are going to be the last ones back on planes. First, we need offices to open, then we need offices to admit outsiders and then you can go with them. Like really, there's many steps. So we said what is the value here? Should we be considering more radical excess or cuts? But there are 2 big areas, which really have a meaningful franchise benefit of that large and global business. But beyond the belief that it will recover, maybe not to pre-pandemic levels in the next few years, but it will recover. That really brought home the value of the franchise. And those 2 things are first of all, the value to merchants. So corporate travelers and the T&E's wallet they represent and the value to the merchants is an important part of our merchant value proposition in the U.S., but maybe even especially outside of the U.S. The U.S. corporate traveler is somebody who want in your hotel, wherever you are in the world, and it's been a big part of our merchant value story. And then the other place is partnerships, including travel partnerships. So you could take, for example, some of our largest co-brand partnerships, the depth of airlines, the corporate traveler plays a big role there. And we have these enterprise-wide relationships that typically and that is obviously, has the most complex, co-brand merchants, membership with redemption, partner in their travel and lifestyle services capability and even delta jet fuel, like flying jet fuel through our B2B product. So it's not -- it's never been a bit -- our large and global T&E has never been a big part of the overall Amex growth story, but it is an important part of our overall model. And I kind of joke with my team that the day will come when all other payment streams have recovered. And then we get a little extra tailwinds from large and global T&E then we're going to say, "Oh, I forgot about that. That's wonderful. I love that business." So this might be a little while away still.

All right. We have about 5 minutes left. So I just wanted to transition to a few looking ahead type of questions. The first one is around investment. What are the big investment areas that you have underway in the commercial business and sort of what's changed as a result of the pandemic in your investment?

So it's back to that story, so at the start of cards and beyond the card. And in the card, the big investments in 2021 are marketing, right? That's fire enough of that core acquisition engine. I mean, you could almost hear the sound in 2020 when we shut it down. COVID hit, you step -- how are your models predicting? What really the spike would tell you when you are? Those are the kind of questions we asked in 2020. And we hugely ratcheted back marketing spend. And then late this year, we began to fire it up, and we're going into this year, planning to deploy record levels of marketing spend. And the great news is it's going pretty well in terms of the levels of new account acquisitions. And one pleasant surprise has been premium acquisition. There's a statistic that I think Jeff may have shared in the results, which is about U.S. consumer and SME premium acquisition being back to prepandemic levels. We didn't expect it to happen this quickly. But that's the core -- given the core marketing engine fired up, it is firing, and that's a lot of our spend in the core card business today. But then beyond, I talked about some M&A, alliance opportunities, both to embed cards and then the build, right? And our technology spend has been meaningfully deployed towards some of the beyond the card capabilities, whether it's integrating Kabbage, AP automation, stemming that up. We're working on a better version of our cross-border payments capabilities. We're looking at more checking and transaction accounts. And that will be -- it's not going to hit. It's a benefit in 2021, but it's very much a part of that beyond the card build momentum into '22 and beyond.

Okay. And so when you think about sort of the steady state for your business, obviously, realizing 2021 has a lot of lapping dynamics going on. But what is your growth aspiration for the commercial business? Like what do you consider to be a sustainable long-term growth rate?

I won't give you a number. I think it's too early post-COVID to make any hard predictions. As I thought about both U.S. SME and international SME, I talked about returning to pre-COVID levels of growth in the card business. And then you look at beyond the card capabilities, it's about how we both defend, all these kind of lively fintech attackers and their traditional competitors. But also build beyond into that broader B2B payments and working capital opportunities. And it's an interesting thing, right, that we have this core charge business, we love it. Within that next ring, of B2B payments and working capital, it's a very large profit pool. And these are fairly -- it's not as sort of tried and true much of a sort of big machine as a charge business. But as you begin to compete successfully beyond the card, we do -- I do believe we should be targeting more growth over time.

All right. And for our final wrap up question, I'll just ask you personally, what are the areas as you're looking ahead with your business that you are maybe -- you personally -- your personal priorities. So what are you focused on? And also sort of what are the couple of areas that you're the most excited about?

So I think the focus on the whole agenda, right? It really is quite a special opportunity to have a franchise that's so strong today in that core charge business. And so many opportunities that are closed in beyond the card. And what I find really interesting to maybe underappreciated is that the card is a great payment tool for small businesses. I mean it's evident when you look at the size of our franchise, but our customers love it. Like it's so easy. It's accepted in most places, you get rewarded, you can pay us you get float. You can extend it to pay over time. It's such a useful tool. And so making sure that continues to be a real business spend tool in things like our very important business platinum proposition. That's a major focus area. You can't take your eye off the core, right, because if you can't afford the beyond, right. So the core is key. So personally, I came into Amex out of card background. I've come to -- now they love that business, but it came in from banking. So I do feel like I had a kind of differential focus and push in beyond the card product set, whether it's the Kabbage acquisition and stand up or AP automation or these other products. So I believe I have to lean in pretty hard on those. So I think I just answered your question by saying everything. But it's an exciting agenda. So -- and it's -- we talk to our customers about not wanting to kind of ways to recovery, we want to make sure we win the recovery together. And that's very much what we're trying to do in commercial services.

All right. Wonderful, Anna. Thank you very much. It was delightful to have you for the first time. Looking forward to maybe next year in person, actually.

That will be great. We'll get there in person. We'll put it on an Amex, we'll go for an amazing dinner. T&E will be back, Lisa...

Exactly. All right. Wonderful. Thank you very much. And have a good...

Thanks, Lisa. Thanks.

Thanks a lot.