The deal - set to close in the first quarter subject to regulatory approval - consists of EUR425 million in cash up front and an extra EUR71 million equity interest that will be held by Loyalty Partner's management. Amex will then acquire that interest over the next five years at a value based on business performance.

Loyalty Partner's coalition programme sees loyalty cards distributed to millions of people who can earn points and get discounts and benefits at thousands of merchant partner locations. Merchants fund the consumer offers and Loyalty Partner earns revenue from operating the platform and providing marketing support.

The business will become part of the Amex's international consumer and small business services group, led by its president, Douglas Buckminster. Alexander Rittweger will continue as Loyalty Partner CEO.

American Express says the deal helps it boost its presence in new international markets, adding more than 34 million people to its international customer base and expanding its range of rewards and loyalty marketing services.

Ed Gilligan, vice chairman, American Express, says: "We recognise that network scale, technology, marketing expertise and customer loyalty are keys to a new generation of mobile and location-based digital marketing services. With its state-of-the-art platform, rewards that serve as a virtual currency, outstanding management team, and large customer and partner base, we think Loyalty Partner will be an excellent complement to our existing businesses."

Last month Amex outlined plans to offer cardholders reward redemptions for virtual goods and games produced by Zynga, the developer of the popular Farmville Facebook game.