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American Express, Knot Enhance Card Members' Checkout Experience

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American Express Company (AXP - Free Report) and an Amex Ventures portfolio company, Knot, recently introduced a pilot feature designed to streamline the process of adding payment information at certain retailers. This pilot feature is currently available to a select group of American Express customers, allowing them to effortlessly input their payment details at popular merchants such as Bloomingdale’s, Hilton and Macy’s (M - Free Report) . 

Knot is a fintech firm that focuses on managing card-on-file data. It provides a seamless way for customers to automatically update their card information across a specific set of merchants. Meanwhile, Amex Ventures is the corporate venture capital branch of American Express and aims to fund early-stage companies that can drive innovation and generate value for AXP’s customers and partners.

This new service is powered by Knot’s CardSwitcher technology and American Express’ proprietary secure data-sharing technology. The Knot technology allows customers to switch payment methods without manually re-entering their card details while the AmEx technology facilitates the secure sharing of payment information with customer consent.

The recent move is likely to result in a number of benefits for American Express cardholders. The cardholder who had previously shopped at a participating merchant but did not save their card details can now do so easily when prompted. This new integration ensures an easier payment process, smoother checkout process and frictionless transactions for cardholders. It is expected to improve efficiency and boost online sales conversions for merchants.

Benefits of the Recent Move to American Express

An elevated American Express membership experience as a result of Knot’s solutions is likely to serve as a means for AXP to attract new clients, as well as retain existing Card Members. Increased utilization of its card offerings is likely to boost card spending and contribute to the top line since the company primarily generates revenues from card spending activities. 

Efforts to infuse new benefits or enhance existing ones within card offerings are of utmost importance as the card-issuing business remains an important source of revenues for American Express. Management anticipates revenue growth to be between 9% and 11% in 2024.

AXP Stock’s Price Performance

Shares of American Express have gained 60.6% in the past year compared with the industry’s 19.7% growth.

Zacks Investment Research
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Zacks Rank & Key Picks

AXP currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the Finance space are MFA Financial, Inc. (MFA - Free Report) and Ally Financial Inc. (ALLY - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of MFA Financial outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 8.55%. The Zacks Consensus Estimate for MFA’s 2024 earnings indicates an improvement of 0.6%, while the consensus mark for revenues implies growth of 19.6% from the respective year-ago figures. The consensus mark for MFA’s earnings has moved 5.3% north in the past 30 days.

Ally Financial’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 24.71%. The Zacks Consensus Estimate for ALLY’s 2024 earnings indicates an improvement of 15.1% while the consensus mark for revenues implies growth of 0.6% from the corresponding year-ago figures. The consensus mark for ALLY’s earnings has moved 17% north in the past 60 days.

Shares of MFA Financial and Ally Financial have gained 14% and 49.8%, respectively, in the past year.

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