American Express stock climbs on Supreme Court victory
Shares of financial services giant American Express were trading higher in a down market on Monday after the Supreme Court handed down a major victory for the company.
The high court ruled in favor of American Express’ policy that prevents businesses from offering discounts or other incentives to consumers if they pay with cheaper credit cards. American Express tends to charge merchants higher “swipe fees” than other credit card companies, but now retailers won’t be able to ask customers to pay with other cards.
While the overall market plummeted into the red during Monday’s trading session over trade concerns between the U.S. and China, shares of American Express popped.
|AXP||AMERICAN EXPRESS CO.||159.77||-3.00||-1.84%|
Meanwhile, rivals Visa and Mastercard were both trading lower.
In the first quarter of 2018, American Express reported that net income for its global merchant services was $427 million, a 32% year over year increase, which it said primarily reflected higher cardholder spending.
The company justifies higher merchant fees by claiming that its customers spend more, though it has had to lower them throughout recent years to get more vendors to accept its card as payment, according to The Wall Street Journal.
American Express is responsible for 26% of all U.S. credit card transactions, Reuters reported. Merchants pay $50 billion annually to process those transactions.