Please welcome American Express Chairman and Chief Executive Officer, Steve Squeri.

Good morning, everybody. And as you can see, we did this in the morning this year versus the afternoon and we ordered no snow. For those of you brave enough to make it last year, it was quite the March day, so anyway. Welcome everyone. And thank you for joining us both in person and on the webcast and welcome to our 2019 Investor Day. Today, we're going to go through four presentations. We'll take a break after the digital presentation and we'll finish as we always do with a Q&A session. I'll start by doing a quick recap of the strong momentum we built in 2018 and talk about our foundation that enables us to capture new growth opportunities. I’ll then spend most of my time discussing how we’ll accelerate progress against our strategic imperatives by focusing on our customers as a platform for growth, expanding strategic partnerships and by implementing a more focused international strategy. After my presentation, we’ll spotlight progress on two of our strategic imperatives. Anna Marrs, our new Head of Commercial Services, will do a deeper dive on B2B payments. And Mohammed Badi, our new Chief Strategy Officer, will discuss how we're continuing to enhance our digital capabilities. Jeff will then discuss our financial growth algorithm, which enables us to invest consistently for share, scale and relevance. He'll explain why we have confidence in our ability in today's environment to deliver high levels of revenue growth, which is the foundation for steady consistent double digit EPS growth. Let's get started with a quick review of 2018. Our 2018 performance was strong across the enterprise. We delivered record revenues of 10% on an FX adjusted basis, as well as 24% adjusted EPS growth. Proprietary billings were up 11% overall. We grew loans 13% and return on…

Good morning. As I'm new to American Express, I just wanted to start by introducing myself. Before joining last year as the President of Global Commercial Services, I ran the commercial banking business at Standard Chartered Bank. I was also their Regional CEO for ASEAN in South Asia. Before that, I was a partner at McKinsey in the firm's banking practice. And prior to McKinsey, I ran a financial information technology startup based in London. My career has been very international, although, I started work here in New York. I've now lived outside the U.S. for 19 years, 15 of those in London and four in Singapore. I joined Amex in large part because of my excitement about the commercial business. We're a leader today with an opportunity to play an even greater role in B2B payments and working capital, both here in the U.S. and in our focused international countries. So here's the messages I want to convey today. First, Amex is already a leader in commercial payments. We have a distinctive customer base, delivering strong results in a spend-centric model. Second, we have many opportunities to grow. Future trends should enable us to increase our relevance in parts the commercial landscape, in which we're less well penetrated today. Third, we're investing behind these opportunities. I'll give examples of how we're investing to differentiate and grow our core card business to increase scale and business financing and supplier payments and to digitize the customer experience. And finally, I’ll touch on what the future looks like when we successfully execute our plans. So let's start with an overview of the commercial business today. Commercial has a leading customer base. We serve 3.4 million businesses with 14.5 million card members. We think of these customers in two broad groups, SMEs and…

Thank you, Anna. Good morning, everyone. As I'm also new to American Express, I'll start with a quick personal introduction. Before joining American Express, I was a senior partner with the Boston Consulting Group where I was the leader of the firm's payments practice. I was at BCG for 14 years. My work spanned the payments value chain and my mandate was global. I served companies across both developed and developing markets, and was a lead partner with clients in seven countries across four continents. So yes, I've an excellent training ground for the global business that is American Express. But also yes, my frequent flyer account balance has taken a significant hit since I came over to American Express. Before BCG I was an engineer, I co-founded a Silicon Valley startup and was part of the pre-IPO team of a New York Silicon Alley company. I also worked on the team that launched NASA's Gravity Probe B Relativity mission. I'm really excited to be here at American Express and help lead the company as a Chief Strategy Officer. Digital is topic on which I'm particularly excited to engage. Coming in candidly, I’ve a number of questions about digital. I mean after all, there's not a lot out there in the public domain on what American Express is doing digitally. Our company is known for its high touch model. And the level of digital disruption in the industry is really high. Over the last few months, I have had my questions answered. I'm excited to share with you today that Amex has harnessed digital to transform as a company. And I believe we are well-positioned to both succeed and shape the future of the industry. So with that, today, I'm going to cover three topics. First, I'll give an overview…

Ladies and gentlemen, we will now take a short break. Please return to the auditorium in 20 minutes. [Break]

Ladies and gentlemen, as you find your way to your seats, please take a moment to silence your electronic devices. Please welcome American Express Chief Financial Officer, Jeff Campbell.

Well, good morning, everyone. Good to be here. Welcome back from the break. So, Steve, you started by reminding people that last year there was a blizzard for this performance. For those of you listening on the webcast, who aren't in New York, we're looking out at a beautiful sunny day, and I hope that's an omen for the global economy for the rest of the year, okay? So, my role, as it is every year, is to try to put the things that you’ve heard so far today into a financial context and then get on to the thing that I suspect most of you really want us to get on to, and that's the Q&A where we will talk about whatever you would like to talk about. Certainly, at this point, you should have a good sense of the moment we have, a better sense of the B2B opportunities and how far we've come digitally. And hopefully, after the next 30 minutes or so, you'll have an even better understanding of how all that comes together, financially. So, Steve showed you the slides. And this statement is really at the heart of our financial model and philosophy. We are focused on sustaining high levels of revenue growth that delivers steady and consistent double-digit EPS growth. This model really starts with the belief Steve expressed earlier that having an investment strategy focused on growing our shares, scale and relevance creates the best foundation for long-term value-creation for our shareholders. In today's economic, regulatory, competitive environment, the model should lead to double-digit EPS growth. And in any kind of environment, it should lead to revenue growth levels in the top-tier of the industry. We provide annual EPS guidance each year, so that you understand clearly, our EPS growth expectations given…

So, even though Anré and Doug did not get an opportunity to present, we thought you'd probably like to ask them some questions. They begged to present but we -- it's true. The crying was unbelievable. But, we'll save them for a later date. But, anyway, we're here and we're happy to take whatever questions you have. So, we will go right over here who has the microphone?

Thanks, Steve. And thanks for doing this analyst day. It’s Jamie at Susquehanna. Anna, I wanted to follow up on B2B presentation, which was really interesting, incremental. I was wondering if you could characterize what portion of the B2B opportunity you described as secular versus a structural, like that video you showed of moving from paper to online versus cyclical, if you could decompose that. And I just wanted to do one more, I’ll just get them in there, not B2B, but with the disclosure that fraud rates are lower in card not present, does that argue for a lower merchant discount rate? It's a big debate out there. Those are my two, B2B and then CNP. That's.

Okay. So, I'll kick these over. They can add a little bit more color. But, let me first talk about B2B. I think, from a B2B perspective, the one thing that we've seen is you have seen an uptick in some of the global and large accounts, which is really not something that we have seen in recent history. So, I think, that has to do with the economy. But, I think, the big opportunity within B2B and it's on, on a slide with this 2% penetration as it relates to the AP files is a huge opportunity for us as there are structural changes within the industry. So, I think that's what is huge opportunity for us to continue to capture spending. And when you think about sort of small business piece of it, it really is expanding our organic core and it's the whole concept of the customer as a platform. So, let me stop there, and ask Anna if she has any color to add to that, and then we'll get to your second question.

Yes. So, as we think about the opportunity, we don't use the trillions of volume, we come back to these billions of profit. And I think that's an important lens to put on the opportunities. And $90 billion of profit in B2B payments and short-term working capital. And within that, kind of look back on that slide, there are aspects of that that have these enormous structural trends going through them, the digitization of payments, arguably being the largest on that $61 billion of payment profit, and that is simply a structural and is I believe inevitably moving towards electonification. And there are aspects of that profit pool that obviously go up and down a bit, depending on economic cycles and corporate spend. But, when you think about it, companies paying their suppliers bar major economic cataclysm, it will happen, right? These companies need to buy what they need to grow their businesses across larger, global SMEs.

So, as far as discount rate, the second question, we’ve better than the competition across, whether it's card present, card not present or digital for as long as I’ve been here, which has been forever. And we're doing better from a digital perspective now because you have more robust information. And you were talking about a couple of basis points. I think, will that lead to a redo in merchant discount rate, I don’t believe it will. I think, there is -- we look at industries. As I have said, we look at geographies when we think about this, but that is an advantage that we have and one that really just increases our overall margin. But, I don’t see that impacting the discount rates. Anré? Anré Williams: The thing I would remind you that American Express prices merchants differently than the other networks. In most cases, we price more the large merchants that you might be referring to individually as opposed to with a standard industry tables and fees in a way the other networks do. And we take into account the value that we provide to the merchant and whatever industry or geography that we are in along with the rate that we charge. And we always try to make sure it’s competitive and fair, and it makes economic sense for them to continue warmly welcoming American Express cards.

Bill Carcache with Nomura. The networks have talked about how they are partnering with third parties to expand B2B acceptance, somewhat analogous to what's been done in the consumer space with acquirers historically. Can you about the extent to which you guys are partnering with third parties or is the merchant acquiring capability is something that you are leaning into more heavily? And then, separately, Anna and Anré, what can you or are you doing to work together to expand B2B acceptance within your teams?

So, let me just start it off and then I'll kick it over to Anna and to Anré. I think, one of the big advantages we have in sort of the B2B space is the economic model that we have as well as the relationships that we have, that entire integrated payments platform where we have relationships with the suppliers and so forth. And we have the ability, and Anna talked about Early Pay, we have the ability to price those B2B transactions in the appropriate way that there is value created on both sides, and we have the data. I think, the other thing that we talked about and that was in my presentation and Anna talked about it, not only from the SME perspective but also from the global and large perspective is I think the partnerships here is the automation of the process flow. And so, when you think about people like MineralTree, Tradeshift, Bill.com, so forth and so on, I think those are the big partnerships. The other stuff that you talked about in terms of from a merchant acquiring perspective, I think, we get that for free in our model, so.

Yes. We think a lot about the various ways to various participants that are trying to attack this $90 billion B2B profit pool. And everyone comes at it from their position of kind of where they believe they have the competitive edge. And the slide I put up about our platform, we have the integrated model at the core and it’s very much how we see it, the ability to both hook up buyers and suppliers and know what’s happening in between them is a competitive edge. The other thing that of course we have to lead be build from as we build out on B2B is the customer base we have today. Such a significant share of the U.S SMEs who are customers in one product, most of them only have one product and then the fact that T&E, they’ve seen a really strong solution, only taps into 2% of large customers AP files. That is truly the platform for growth. So, with those customers and working with that closed -- the integrated model, that’s where we are focused. And Anré has been a key partner to this business, both before and since I have joined and love to have him talk a little bit about some of the things that he is most excited about as merchant partners with commercial. Anré Williams: Well, the thing I would remind you about is different about our models. We leverage the same acquirers that the other networks do around the world, so, whether we’re working with First Data or WorldPay or working with Adyen or Stripe or Square. So, all of the networks generally acquire, a bulk of the merchants the same. The differentiator for us is that we have a large proprietary team of people in many countries around the world to work directly with merchants. And we have a large -- small business and commercial base around the world. And it’s the connection between the commercial issuing side and the proprietary team members that we have in many countries around the world that can take the lead to AT files from the customer and go one to one and build relationships where necessary is what we think is differentiating for us that we can able the right type of spin. Along with the partnerships that Anna and team have created with the AP Automation, the Bill.com, the Tradeshift, those things just gives us a great solution to be able to go to commercial midsize companies that say we can help you figure out how you electronify your AP spend.

Let me just add one other thing. It will probably come up at some point. But, when you think about unlocking this B2B and there’s been acquisitions that have been made by our competitors, whether it be it be Vocalink or whether it be Earthport or something like that, our belief is, the significant opportunity is really the process automation piece of this. And so, that’s where we believe the importance from a partnership perspective is because when you talk to customers, integrating the payment piece with the process piece is the most important thing. You cannot have the payments piece right above it. It needs to be integrated within. And I think that's the big opportunity. And so, that's why the partnerships that we put up are so important. So, on this side, Craig? Maybe not, maybe Don.

Hey, Steve. Don Fandetti of Wells. So, I guess, on international, you sort of focused on that. I just want to clarify, are you pushing acceptance harder in international, like today versus the year ago? I feel, like the 20% number I’ve heard before. And then, if you could just talk a little bit about how you decide to push acceptance internationally and balance that because my sense is that the returns internationally are a little bit better because you’ve got some inefficiencies. But, if you throw in the sort of growing the acceptance, how does that impact profitability?

So, when you think about -- we’ve thrown out LIF numbers from a 20% perspective, probably in years past. We’re talking about coverage. And let me just talk about the differences in LIF and coverage. Because we signed 1.6 million merchants in the U.S. last year to inch our way even closer to parity with Visa and MasterCard. You have so many merchants that go out of business And you have so many merchants that come in business. It's a moving feast. And so, what I'm talking about is 20% coverage improvement, not necessarily LIF improvement. I think, the LIF actually will be much higher than that. When you think about where you go, it is -- look, the world's a big place. And what we had to do is to look at it from where we had inbound -- where we had inbound card members coming to, both from a small business perspective, corporate perspective, our premium consumer travelers, as well as the existing base we add. And so, we looked at what we called our top tier countries from a coverage perspective. We then looked at the top cities across the world and prioritized those. And then, we looked at the top verticals. When you think about verticals, think about restaurants, hotels, airline, car rental. We have really good coverage, but you could still improve that as well. So, as you think about sort of getting the best return for your investment, because I just can't put thousands and thousands of people across the globe. What you wanted to do was where card numbers are going to be. And we believe the way that we've structured it will be the biggest -- will be the best return for us. Now, having said that, look at the growth that we've had internationally. We've got 17% consumer growth and we had 23% SME growth. And let's be honest, our coverage is nowhere near as good as it as the United States. And so, we're having that growth and we still have opportunities to improve coverage. And so, we have opportunities, I believe, to even get more share of -- share of wallet. And the reason, we focused it on those countries, and we talked about Tier 1, Tier 2 and Tier 3 is we also believe that not only is that the biggest share of the spending that we have today, but also the biggest share of the profit pools going forward. Craig, and then we'll go to Sanjay.

Thanks. Craig Maurer with Autonomous. A couple of questions. First, I wanted to get your big picture view on the fight that Visa’s having with Kroger right now and what that means for the industry. Second, in B2B, you're inevitably going to have to ride -- you alluded to this before, but inevitably going to have to ride the faster payment rails. How do you intend to access that capability? And just last the relationship with PayPal and P2P, traditionally that's a zero revenue business for those that are in it. So, is there a financial relationship that's involved in that integration? Thanks.

All right. So, let me start at the back and work my way forward. And I’ll ask Doug to comment. As we think about sort of the PayPal and P2P, think about sort of this application, because this is the application that my daughter talks about all the time. She'll go out with her friends, put down her American Express card, because that's the only card that she has, one under my account, one under her own account. And, she'll go out with her friends and she wants to get her points and so forth, and they'll Venmo her the money, but it'll be outside the system. Think about the application where now they can Venmo her the money to the American Express account, so we keep that money within the system. So, is there a financial arrangement? Keeping that money in the system and having that respent is a big deal. So, let me let me ask Doug to sort of comment a little bit more on that. But, that's the high level.

So, Steve just gave you a little sneak peek of one of the use cases. But, I mean, I would look at 3 ways, Craig. I mean, first of all, it's a build on our commitment to expanding our network in the U.S. and outside the U.S., right? It's lighting up tens of millions of additional endpoints for our payment network through the P2P connections. Second piece I would say is it should drive preference for our payment products, especially in these social purchase scenes like Steve described. And the third place, I think we’ll find some revenue is finding some -- providing financing capabilities to large ticket P2P transactions. Think like vacation rental shares and things of that nature where we would provide cost-effective financing for some large ticket P2P. So, I think at one level, it's a utility and network reach kind of game, but I think that there are some revenues that pop off it as well.

So, yes, I may have given you sneak peak but otherwise the answer would be no comment, which you probably wouldn’t have been happy with. But, let's talk a little bit about your second question, which was you think about fast payments, fast ACH. And I think that's a capability that we’ll need to have at some point, but let's think about sort of the problem we are trying to solve with this right now. The biggest problem we're trying to solve is, you’re trying to automate the payment and the process, so that's number one. Number two, most of these merchants or suppliers are getting paid anywhere for 60 to 90 days. The fact they can get paid in 5 minutes is not really their big concern right now. Their big concern right now is getting paid in less than 10 days. I mean, if we can improve this process and is where Early Pay is a really good -- is a good product for us. If you can improve this process, so that you can get this from a cash flow perspective that a small supplier is not waiting 90 days or 60 days, and having run a procurement organization, and know that's what they wait. That's a big deal. And so, I think over time, yes, it's going to be a really important capability. But, I think you have to run before you walk, so that would be my perspective. Anna?

I agree with that. And this is another example of the strength of the integrated model because as an issuer we can provide the short-term financing, so we play not into the three-day to same day but in the 90-day to 10-day part of the opportunity. And I -- in addition to having merchant capability in this partnership that we have inside the company controlling the destiny of the network in terms of how we build out P2P capabilities as needed to compete, it's another advantage. And I pass back to Anré who might want to do the Kroger question too. That was about…

He’s got a point of view, but let me -- let me give you perspective on, look, we think from a payments industry perspective, we provide value to the merchants that accept our payments. I think, what's really important though is that you have to demonstrate a price, value that you are delivering on a merchant-by-merchant basis, on a transaction-by-transaction basis. And we strive to do that every single day. And so, and as Anré said and that's one of the reasons why our model is a little bit different. I mean, we will have -- we do some merchant-by-merchant deals. But, the most important thing for us is to ensure that we are providing value to the merchants and that they are seeing that value. Anré Williams: So, Kroger is one of the larger retailers in the United States, largest supermarket chains and retailers here in the United States. They are frustrated obviously with their relationship with one of the networks that you talked about. And unfortunately they haven't come to terms that have been satisfactory to them. They felt the only recourse they have is to take it public and say they will not accept. I think, what it does is it reinforces too many people in the marketplace, the American Express is not either a more expensive all the time or doesn't provide more value. And I think, this is a large retailer, which is staying that. So, it's unfortunate to see them in this situation but it does go back to what Steve talked about which is we work with every merchant individually to try to make sure we're providing value to them. So, I think it's a great business decision to accept American Express and warmly welcome. The thing that is unique about this is that they're differentiating between credit transactions and debit transactions. They're still accepting debit transactions, they're only barring Visa credit transactions in a subset of Kroger locations. And that's something that we've never really seen at any scale in the United States. And I think we're watching it closely to see what happens over time. It's not an issue for us right now because we don't have debit capabilities and we don't have debit products in the marketplace, but just seeing what merchants do in terms of differentiating between credit and debit transactions, how this plays out I think will be interesting and informative.

Sanjay?

Thank you, Sanjay Sakhrani from KBW. I just have a question on the financial targets or I guess the quote. Is 2019 sort of synonymous with the trend that you're looking at over the intermediate or long-term, or are you above and below or below the average trend? And then, secondly, can you unpack how you intend to get to the revenue growth, like the networks give us some kind of multiplier effect on GDP growth, for discount revenue and then interest income growth. Could you just unpack revenue growth and your expectations there? And then, I've a follow-up for Anna.

So, the point we're making on the financial growth algorithm is that we start with share scale and relevance. And in today's environment, that leads you to double-digit EPS growth in 2018, double-digit EPS growth in 2019. In different kinds of environment, what that focus on share, scale and relevance means is that you should expect us to always seek to be in the top tier of industry revenue growth levels because it's all about driving share, scale and relevance in the long term. It does not mean you will be at double-digit EPS growth in every environment. And that's why we give you our annual EPS guidance to try to help you understand our perspective on the environment at the time.

So, let me just comment on that and a little bit of the why, and why scale is so important, and why you need to make investments through cycles or tougher times. Let's talk about coverage. We just talked about coverage a second go. You will invest money to get that coverage. It makes no sense to stop getting scale from a coverage perspective. We're always going to need that coverage. It makes no sense to stop building capabilities that we’re going to need, either from a digital perspective or a B2B perspective. And a lot of times, your go-to-move is to stop those things that you would determine to be as discretionary and they're really not discretionary, unless you view your business as I'm only running my business for this year. If you're really thinking about it, those are investments that you really need to make for the medium and to the long-term. And so, while it may not be popular, we believe it is critically important for the overall future success of this Company to make sure that we are investing in those things that will drive our future performance. And we believe that is our merchant coverage, our investment in our network, and our investment in our capabilities to access those opportunities for growth, moving forward. So, that's why we say we can't always guarantee it will be double-digit because I'm not going to make a decision to pull away from some of those investments to hit an EPS number. We’re going to be pretty clear on what we're doing and will be as transparent as we can. But, if you just think about -- just think about the financial crisis we went through 10 years ago, boy what if we continued all our coverage through that time or what if we continued to build all those capabilities, how you then come out of that? You come out of that like a lion as opposed to coming out of that like a little bit of a lamb. So, that's the belief that we have as a management team. And that’s the belief that we will attempt to continue to communicate to all of our shareholders, and especially those are holding stock for the long-term because that's how you want us to invest.

Let's talk about your revenue growth. The reality is because of the nature, Sanjay, of our premium consumer base, the parts of B2B that Anna talked about that we access because of our share position, our share gaining in many markets, you really can't tie our revenue growth to a simple GDP number in any particular geography. If you think about the discussions we’ve had over the past year, for example, we’ve been calling out double-digit growth in Japan where there is almost no GDP growth and fabulous growth in the UK, which certainly has had its challenges over the past year. So, the belief we have, the confidence we have in our ability to sustain revenue growth, comes from the nature of our model, the investment choices we are making that focus on share scale and relevance. It’s certainly impacted by the economy, but there's not a simple multiplier who’s looked at every possible one, trust me, but you can look at, measure it.

Anna, could you just talk about how you are going to use your learnings from your previous employer and bring it to American Express in your new position here? I just would love to get a sense of your strategy, compared to the old one.

I think, there are few things that I brought that were different, as I came into American Express. The first is this commercial banking experience, the second is I’ve lived and worked outside of the U.S., and many, many places now for 20 years. And the third is, I’ve done a lot of strategy and partnerships/M&A type stuff over my career. So, as I came in, those are few areas that I knew I was hired to get right. The first is, putting out a very sharp strategic roadmap, stepping back and saying where are the profitable parts of this industry we could grow and making sure that our plans and our investments are lined up against that and get a lot of work on that with the team, just after I started. The second is, I very much believe in our opportunities in our international markets. The team that’s here has delivered a meaningful step-up in growth over the last two years. And I'm very much behind continuing that. These are markets where we are already quite strong, building on consumer, and we watch other longer term opportunities outside of those traditional eight markets with interest in the years ahead. And the third thing I would say when it comes to the M&A and partnerships, my presentation was a lot about partnerships. We really see them mattering tremendously when it comes to capturing the B2B opportunity, both to integrate into the payment flow, as Steve talked about, but also kind of temporary distribution partnerships in this increasingly sort of digital B2B world. And one of my early hires was the head of M&A and alliances just to make sure that we are looking at those small bolt-ons that a partnership that can make a difference. So, I would say those are the main areas.

Bob Napoli from William Blair. And I hate to beat B2B to death, but another question on that, then a follow-up in cross-border maybe related. But in your B2B efforts, I mean, you’re partnering, AP Automation, Steve, you called out as being very critical and you’re partnering with a few of those, Bill.com, Tradeshift, you have competitors in that space, whether it's a Coupa who is integrating that and taking it into business spend management; you’re partnering with also SAP Ariba. First of all, do you need to own the AP Automation at some point and then do you need to carry it further into business spend management? And how do you compete with somebody who is doing it all-in one platform.

My answer would be that the AP Automation, it’s really also fragmented by customer segment. You see one type of player in the smaller end, hold a different set of players in medium and then others in large. When we reflect on what American Express builds in T&E, it’s a very integrated solution around the payment category. You hook up the right merchant, you put the spend product in their hand and go all the way up to integrating into another important partner with Concur, right? And that’s what we do. So, to-date, as market is quite fragmented, working with as many people as possible to make sure plugged in and getting that spend. And those are capabilities that make plugging in easier, right KPIs. Over the long-term,. we will continue to monitor but anything we do, I think that is also very clear on our starting customers strength, particularly in U.S SME which is such a large part of our business and they can share both partnership and any bolt-ons focus on the small and medium end most likely. So that’s my answer.

Last quarter, you had -- I think it was highlighted as a focus to accelerate growth of cross-border and there was some noise on cross-border coming out of fourth quarter earnings and some of your peers. I was wondering if you could give little more color on how large is cross-border, how fast is it growing, have you seen any slowdowns in -- changes in trends and then how are you going to accelerate growth?

Yes. So, it’s -- I will just make a comment, it’s a very, very small part of our business today and it's really, when you think about cross-border -- let’s call that cross-border non-card payments right, very, very small part of our overall business. We think there's an opportunity there from an SME perspective, first, we’ve done -- we did partnership with Ripple and Santander. And we’ll continue to experiment in that space. But, it’s something that we will become more aggressive over time in.

Dominick Gabriele with Oppenheimer. When you guys think about acquiring an account digitally and you saw the efficiency of your digital platform here, how does that change over time as perhaps digital wallets become of larger and larger focus. Have you seen that the accounts that you acquired digitally have more of a likelihood that they are going to use their digital wallets? How sticky are these balances, what does that mean for your digital efficiency through time? Thanks so much.

Customers that come in through digital channels, which these metrics are going to get a little bit less meaningful over time because so many of our accounts come through digital channels. When it’s 50-50, the metrics mean one thing; when you're acquiring over 80% of your customers digitally, it starts to distort these metrics a little bit. But, they are engaged digitally across a range of behaviors and categories at a much higher level than non-digital customers. So, you saw a stat about the percent of customers who are required online, who actually get their card credentials provisioned into their digital wallet before their card even arrives in the mail. So, their spend digitally, their propensity to serve digitally, their propensity to refer and remarket our products are all substantially higher than their non-digital peers. In terms of the stickiness of the volumes and the relationships that we acquire digitally, I see no degradation in the loyalty effect or retention of those volumes and memberships over time.

Thank you. Colin Ducharme with Sterling Capital. A quick question for you. Anna, I really appreciated that slide on the profit pool opportunity with B2B. As you build up those assumptions and you think about what’s cardable versus what's not, can you help us look through your same lens, how much of that assumption is cardable versus not and how are you thinking about the unit economics tied to each of those two pieces?

So, the other statistic I cited besides the $90 billion is the 70%, right? The 70% of B2B payments by most estimates that are still made by a check or ACH, so then 30% are already electronic and then other estimates say that to extent it's growing faster than the profit pool overall at double-digit. So, that's where we are today. If we look at that, it's clear that hooking into that existing customer base that I talked about, the SME is large and global, being integrated into the payment flow, the right technical capabilities and the right partners as that trend happens. The benefit to customers are so many across obviously increased efficiency, if you saw on that Bill.com video, the elimination of paper, getting paid faster, a lot of activity out there that integrates to working capital and the payments to really sort of get you paid faster when -- and having borrowing somewhere in that system. And then just over time what that means in terms of growing suppliers and growing the business, so that is the structural trend in the movement of that volume, electronic, it's beginning to happen, but it’s kind of crazy that 70% is still via check or ACH when there is just so many more efficient methods out there.

Right. Just to clarify in terms of clarification for the non-cardable B2B opportunity, what sorts of assumptions on the unit economics are you thinking about?

Margins range in that profit pool from couple of hundred basis points down to 30ish. One of the reasons why with my team I’m focused on profit pool is the way we talk about the opportunity, it's because within that there is some space as we can grow quite profitably in line with economics that Jeff would be excited about. They are lower ends, so lower margin opportunities but because of our scale and our infrastructure today, we can capitalize on to that putting more volume through. But, quite variable in that overall opportunity.

A quick follow-up for Steve. You touched on China. I know it's early there, you guys have important advantage today. Help us get inside your head in terms of how you're thinking about the monetization there on network only opportunity? And then, relatedly different geography, but domestically with the closed-loop model, you have data superiority in terms of the visibility. What can you do to leverage that advantage to grow the network only piece to the business?

Yes. So, I think, the first -- step one in China is building out the network. And at the moment, we have a preparatory approval, which allows us to continue to build. We've decided to do that with a partner, a partner that we had a longstanding relationship with from back in the serve days, and one that's very familiar with the market. So, I think, when you think about the economics in China, it's really about getting a big merchant base which will work with our partner to get merchant acquirers, much like Visa, MasterCard would. And we'll be out there getting as many issuers as we can. We do have that advantage because we have a -- we have a lead. And the economics in China, it's all going to be about just getting transactions, where I think the big opportunity is, is there're going to be a lot of traveling Chinese cardholders. And I think that's where we’ll have better economics overall by getting even more scale and more relevance outside of the China market. To touch on the closed-loop for a second, I think one of the things that was really attractive to the PBOC and will be really attractive to the acquirers and will be really attractive to our issuing partners is we will share our expertise and our learning around how do you manage premium customers, how do you manage credit, how do you manage fraud, how do you utilize that data? Now, that data will be the data from Chinese cardholders. We're not talk about the data from the rest of our base here, but how do you use that -- the data advantage to really get at your cardholders. And I think that was as attractive as anything in granting us the license. So, I think, that's a big leverage point for us as well. Over here and then we'll go right back to you.

Chris Donohoe with Sandler O'Neill. One question for Jeff on the digitization and where are you in terms of getting -- it sounds like there's a lot of efficiencies coming in terms of acquisition and in terms of servicing. But, I'm wondering is there a point on the near-term horizon where those efficiencies start to drop to the bottom line or do you still have so much to do on investing in the digitization that it's going to become something of a wash over the next few years?

Well, gosh, I'll invite my colleagues to join. But, I think, Mohammed's presentation should hopefully help you understand just how broad our digitization efforts are across the entire Company. And I would suggest they're completely integrated in everything we said today about our financial model. We would not be getting the marketing efficiency gains we're getting, which are key to offsetting some of the other margin compression we have, without having made tremendous progress on digital that is dropping to the bottom line and yet we see a long runway. And I think Doug would second this, to continue to get gains. Keeping our operating expense growth to 6% over 8 years has been heavily, heavily about leveraging technology, the growing power of technology and lower cost of technology to digitize every single part of the company, from things that you would see as a customer, like our service centers around the globe and the way we interact with merchants and card members to frankly back office things you don't think about, like the big back office I have in finance where we're using robotics to take tremendous amounts of cost out. So, I think we have seen a tremendous amount drop to the bottom line, and I think there is years ahead of us.

And I think that's where you're seeing -- we talk a lot about operating leverage. But, if you think about the volume growth that we've had over the last eight years and to have 6% OpEx growth, that's not happening without the digital engagement. I mean, we didn’t talk about this today, but even people that are no longer getting statements, that's increased over 40% in the last three years. And Mohammed had a stat up there that 70% of our millennial customers are digital engaged with us. So, I don't think we’d be where we are in the expense journey without this. And certainly the marketing efficiency, Doug’s talked about it in the past, Mohammed had a slide up as well, that’s driving a lot of our growth.

Yes. I mean, I would just say the marketing efficiencies alone are driving hundreds of millions of dollars of efficiency. Some of it's going to be a cost play, whether it's marketing efficiency, whether it's the servicing efficiency. Some of it’s going to show up in enhanced customer engagement and volume growth. And to give the example of -- historically we offer travel and lifestyle services concierge service to the top 4% of our customer base globally through the application of technology. Technology, we bought when we acquired Mezi last year. We are going to be able to extend digitally offered travel and lifestyle support throughout our member base in a high-quality cost-effective way, which we think is going to drive material step up in appeal of our products and engagement with our products. So, I think, the digitization journey shows benefits both in terms of cost displacement in some of the pure bottom-line enhancement that comes with that. It shows up a lot in increased customer engagement and service provision as well.

And then, just shifting gears to another topic for Jeff. So, the Global Network Services businesses has had some headwinds over the last year from changes -- regulatory changes in Australia and Europe. Can you remind us when we expect to lap those this year or maybe it’s for Anré?

Well, I'll make a financial comment and then Anré, you might want to talk a little bit about the business. Remember, yes, we have been in the fairly slow process because we are in no rush of shutting down in Europe our GNS business, in response to regulation. The Australia shutdown of the GNS business happened in a more compressed timeframe. But, you're probably into 2020 before the impact of that has completely gone out of the numbers you all see which are the GNS billings that we report each quarter. The only other point I would make is that the GNS P&L is probably less impacted than you might think, because often there are quite different economics depending upon which part of the world is growing or shrinking. And so, the economics are actually doing better than you might think from just looking at the billings number, but I'll let you add a little color. Anré Williams: I think, Jeff covered the right part, which is for the most part in the EU and Australia we’ll conclude all of the partnerships that are ending. Most of it has happened, we’re probably down for last 20%. And it will take maybe 6 to 12 months for that to be lapsed completely. So, in the short-term you still -- on the metrics you might think that it’s not growing. If you normalize for the partnerships that ended in 2018, grew by 7%. And we see that continuing and growing as we get to moderate to long-term, which is good. We have a 120 bank partnerships around the world, they are important to us, they provide scale and relevance around the world. But, as Steve included in part of his presentation, part of what we are leveraging those bank partnerships going forward for is for expanded coverage for our integrated global network, and that's where we're making some enhancements or revisions to our current relationships to enhance the effort that they can put toward building out our merchant network around the world.

Thanks. Jeff Cantwell from Guggenheim. You guys are highlighting a number of partnerships, and I was wondering if we could just focus on Amazon. Steve, have you sort of given any thoughts like the longer term strategy would build out for a partnership like that? And I think what's interesting is, the product that you launched is off to a strong start, the Amazon is in the U.S but they're also in 13 countries globally. You guys have a very significant global footprint. Just wonder if you can talk about what your longer term thinking is for that partnership, if we can talk about that specific one? Then, maybe just talk about marketplaces like A, Amazon, and what you're thinking is -- as you kind of think about the longer-term for some of those for more strategic initiatives of yours?

Yes. So, I think when we think about sort of cobrand opportunities, the first thing we think about is how do we leverage our strengths, right? And the two things that I highlighted in my presentation, we've got some great travel assets and we’ve got really great access into small businesses and we have great ability to provide spending capacity to those small businesses. And you have to ask Amazon, but I think from my quote, that’s what was attractive for them, the accessibility to small businesses and again, the spending capacity that that we gave. As we think about growing the partnership, we will look at that as we move forward. I think you're right though, it's off to a strong start and it speaks to our position in the small business space. We will look at other opportunities from a marketplace perspective as they arise. And if there are co-brand opportunities, we will certainly take advantage of those and bring all the payment capabilities that we have to bear on that, which is why it was so important. Anna talked about some of the payment capabilities, things like merchant financing, things like working capital, we talked little bit about cross-border. I think, when you think about the small business segment, and you think about those kinds of opportunities, we’re really looking to manage the overall working capital flow of small businesses. And I think that's what makes us an attractive partner for marketplaces and obviously makes us attractive partner for Amazon.

Quick follow-up, same topic. Some of your merchant acquiring partnerships, like you’re naming Square, Stripe, Adyen, they're some of the fastest growth acquires in the world. If you kind think about your own strategy with them, what stands out the most as far as interesting opportunities that you think you have with them? Is it a product type of strategy that you’re working on, there is no acceptance strategy with the merchant, I’m just curious what are your thoughts are?

You could throw Stripe, Adyen, Square, you thought PayPal was probably the first one that we had, their total acceptance plays for us. And now, you see as we talk to PayPal over time as these companies mature, there are other opportunities and we’re taking advantage of those opportunities. So, we have great relationships with those companies, we talk to them all the time. As partnership opportunities come up, beyond acceptance, we’re open to those, and you saw that happen with PayPal. So, at the moment, they provide a tremendous amount of coverage, leverage for us. Any other questions? Yes, right here.

Thank you. Vincent Caintic with Stephens. So, two questions. First, going back to the year 2019 guidance, I really appreciate the color on that and the revenue guide and the EPS guide. I guess, when you think about, say, going through that stressed economic -- macroeconomic situation, is that a scenario where regardless you’re able to achieve at 8% to 10% year-over-year revenue growth that you might have to -- so the investments that you make are rewards or something in order to get to that 8% to 10%. So, I’m just of wanting to understand the EPS moves, as a result of that. And then, second point, so I thought it was interesting, the merchant offer, so the Amex offers program, it's almost like that's a cobrand or private label type offering to the customer and it is being paid by the merchant without necessarily yet having that cobrand relationship yet or maybe a precursor. So, I'm just kind of wondering what’s the merchant engagement has been on that, maybe if there is any more rollouts, any other opportunities ahead?

Let me answer the second one first and then I'll kick the second -- the first one to Jeff and Anré if you want to provide any color, but I will attempt to answer the second question. I think, what we try and to do with our partners is a value to our mutual customers, I mean that's what we try and do. Whether it's fully funded, co-funded, half funded -- we work out between ourselves what's the right way to access the customers. And yes, I think -- you raised a very good point that without the cobrand relationship, we've been able to provide value to our joint customers. And why does that happen? Well, you look at fine hotels and resorts, we have two terrific cobrand relationships with Marriott and with Hilton, but if you look at the breadth of our fine hotels and resorts program, it's enormous and it's not just in the U.S., it's on a global basis. And what happens is, we’re able to put together great offers for our joint customers. And those are customers that the hotels desperately, desperately want to stay in there and it's a value, especially for the platinum cardholder. We've done the same thing in retail, whether it's with the Centurion base, the platinum base or other members within our ecosystem, and we will continue to do that. And we do that because our merchant partners find it as a high ROI investment for them to either increase customer engagement or to acquire new customers. And our ability to have these great relationships with merchants and being able to access our card base it’s hard to replicate I mean people trying replicate it and come up with programs that are not quite as scale as ours, but we're going…

On revenue growth, I'd just say, look, we remain very comfortable with the revenue growth guidance we've given for 2019 o FX adjusted growth to 8% to 10%. Now, in different kinds of environments, revenue growth should always, given our focus on share, scale and relevance, we will always be seeking to get it into the top tier of the industry. But, if you have a financial crisis that looks like the financial crisis of 2009, you should not expect 8% to 10% revenue growth. You should expect us to maintain the focus on share, scale and relevance. And we think that will drive top tier revenue growth.

Okay. Well, I’d say, it was almost an hour. That’s okay. It’s lunch time too. So, people have to get to lunch. We want to thank you for spending some time with us today and coming out on such a beautiful day. And thanks for your interest in American Express, taking time out of your day, and have a great day. Thank you very much everybody.