American Express and Industrial and Commercial Bank of China (ICBC) today announced a milestone agreement for ICBC to issue the first American Express-branded credit cards in China.
This agreement is the broadest card alliance yet between a Chinese bank and a global financial services company and will be national in scope. ICBC will issue a line of American Express-branded cards that will be denominated in both local Chinese currency and U.S. Dollars.
ICBC is already the largest card issuer in China and operates a national network of 24,000 branches. It is one of China's largest banks and one of the best known brands in the country. This alliance is designed to leverage ICBC's strong local operations and product development capabilities, as well as American Express' brand and global merchant network.
American Express has now established card-issuing partnerships in 90 countries around the world. It recently signed a card-issuing agreement with MBNA, its first U.S. bank partner in the United States.
"ICBC is one of the most prestigious financial institutions in China and is a tremendous addition to the network of bank partnerships we have been building around the world," said Kenneth I. Chenault, Chairman and CEO of American Express. "We are committed to building a significant national market presence in China, and with an outstanding partner like ICBC, we expect to play a major role in developing the emerging credit card industry in China and accelerating its future growth."
American Express Cardmembers from throughout the world will also be able to use their Cards at all ICBC merchant locations in China.
The launch of the new ICBC American Express Card is expected later this year. Financial details of the arrangement are not disclosed.
"ICBC and American Express are both world-class institutions with significant card-issuing experience," said Jiang Jianqing, Chairman and President of ICBC. "This partnership provides us the opportunity to cultivate the tremendous potential of the Chinese credit card market with innovative, prestigious products that match the unique needs of the Chinese consumer. Consumers are the winners with this announcement."
The arrangement will mark a significant step in developing a card market that is currently highly fragmented. Most of the nearly 500 million bank-issued cards in China are used only for debit or ATM functions. The cards are typically valid only within defined geographic areas. The Chinese market is still predominantly cash-oriented, and a host of disparate account numbering and point-of-sale terminal standards makes it exceedingly complex.
ICBC and American Express will contribute their expertise and technical knowledge to help establish common standards for the card market and help realize the country's enormous growth.
Cardmembers will be able to use their ICBC American Express dual-currency credit cards at ICBC's merchants throughout China. The cards will also be accepted at American Express merchant locations in more than 200 countries and territories. Cardmembers also will benefit from American Express' global service through its 1,700 Travel Service Offices and access to more than 550,000 ATMs around the world.
Today's announcement reinforces American Express' longtime commitment to China. The company's involvement in the country dates back to 1918, when the first branch of American Express Bank opened in Shanghai.
The first American Express representative office was established in Beijing in 1979, followed by offices in Shanghai, Guangzhou and Xiamen. American Express Bank opened a representative office in Beijing in 1986, followed by a second office in Shanghai in 1992. In May 2002, following more than a decade of partnership, a joint venture between American Express and China International Travel Service (CITS) opened for business in Beijing, providing a wide range of business travel management services. Two additional offices of this joint venture have been opened in Shanghai and Guangzhou.
American Express also has been actively involved in a number of significant community and industry-related projects to further stimulate the growth of travel and tourism, and to support preservation of the country's rich cultural heritage.