American Express

AmEx benefits from multiple durable competitive advantages. It is a premium, closed-loop payments network (issuer and network combined), which captures both merchant ‘discount’ fees and cardmember fees. Its brand and service are geared to affluent customers (high usage, loyalty and switching costs).

Management notes the “long-standing advantage” of AmEx’s proprietary platforms (e.g. exclusive dining access via Resy/Tock). These factors constitute a wide moat: network effects of millions of merchants × millions of cardholders, strong brand, and differentiated rewards.

However, the network is smaller than Visa/Mastercard and faces fintech competition, so we score the moat high (80) but not perfect. Continuous innovation will be needed to fend off competitors in the premium segment.