Are we ready to go? Yeah, thumbs up? Okay, perfect. Yeah, so for our next presentation, we have American Express, and representing from American Express, we have Christophe Le Caillec, who was named CFO August of 2023, after serving as Deputy CFO for American Express Global Consumer Business. I know he's back from sunny Florida. We really appreciate you making the rounds to our conference as well, and so we're gonna try to mix up a little of the questions, 'cause I know a lot of questions were asked, but thank you for joining us. Really appreciate it.
Pleasure to be here.
This is the first time you're out... You've come to our conference, and I'm just curious, maybe you could just talk about your early observations being in the seat the last six months or so. A lot has happened. The stock has had an amazing run, so congratulations. You've done a great job. Did well, right? So how do you one-up that?
Yeah. So thank you for having me. Delighted to be here, and I apologize for my voice. I actually have a cold, but I think it's gonna be okay.
Got it.
Yes, you know, the stock did really, really well. And I think it's because this growth plan is becoming real to more investors. You know, we laid out, as we were exiting the pandemic, this plan with Steve, Jeff, and some others. We saw an opportunity for us to accelerate growth, and you've seen the growth, right? 25% revenue growth the first year in 2022. Last year we did 15%. It's quite amazing for a company our size to generate this kind of growth. It definitely changed the company in terms of scale, in terms of focus, in terms of confidence as well, because we know that we have a strategy that is working, and therefore, we are very focused on executing on that strategy.
So if you were to come to American Express and interview, you know, a series of executives or low-level people, what you would find out is that everybody's focused on getting things done and executing on the strategy, which is very comforting for me as the CFO, because we don't have to reinvent anything. We don't have to look for M&A. We don't have to transform anything. We just have the plan, we have the roadmap, and we need to execute. So, it's a good way to start in that CFO seat.
Are there any strategies, as you've come into the role, that you've enhanced or plan to enhance? Anything in the messaging, you know?
No, you know, it's really working really well, and I would say it's working even a bit better than what we laid out in the original plan from a revenue growth standpoint. So, you know, we're staying the course, and we're applying the playbook that we've been applying for the better part of the last 2, 3 years now, which is refresh the products, go after younger card members, focus on premium, execute quality servicing, and get things done. So, you know, right now, that's what we're doing.
Got it. So, these aspirational targets, you guys have the 10% revenue growth-
Yeah
... mid-teens EPS growth. It's been a hot topic of late, right? And I was really surprised, I guess how little people believed in them before earnings, but then, you know, after earnings, they were like, "Wow, yeah, they can actually do it.
Yeah.
So I'm just curious, if you could just help us get comfortable with them a little bit more. Just maybe think about... Help us think through the building blocks and what's gotten you comfortable to this accelerated growth path relative to the past.
Yeah. So, in terms of these building blocks, if you look at 2024, I tried to lay it out during the Q4 call, and we are assuming a level of spend that is similar to what we saw in Q4. We're assuming that, you know, card fees, which was growing at 17%, is gonna pick up a little bit, especially in the later part of 2024. And NII, which has been also the subject of a lot of discussions, maybe we can-
Mm-hmm
... talk a bit more about it. We expect that growth to moderate over time. So these are the building blocks for 2024. Now, if you take a giant step back and think about more long-term, what gives us confidence in our ability to grow in double-digit in the next few years? You know, the first thing, and this is always where I start, the revenue pool we play in is growing at about 7%-8% every year. That's the CAGR of the payment revenue pool in the U.S. and in globally. And so that provides a very strong foundation for us, you know, to grow.
And if you double-click on that revenue pool, if you look at what are the faster segments, fastest-growing segments, you would not be surprised to see younger, cohorts are part of those, faster-growing, you know, segments. International is also part of those faster, segments, as well as premium products. So these are the segments we are the most exposed to, and these are the segments that we are focused on, and these are the segments where, honestly, I think we're winning. So that gives me confidence in terms of our ability to sustain that double-digit revenue growth.
Right. We'll talk about NII in a little bit, definitely. I guess as we're two months into the quarter, I'm just wondering if you have any observations on the spending trends and anything investors should be mindful of?
... you know, very, very consistent with what we saw in Q4, and very consistent with what we assume in our guidance. So not a lot to report there. We're tracking well, and, and so we are exactly where we thought we would be.
Perfect. Okay, so let's get into some of these, revenue growth drivers-
Yeah
... because the refreshes, the fee income growth is a big number for this year. And you guys have talked about the growth rate ending this year faster than where-
Right
It did the previous year. And a big part of that is the 40-some-odd product refreshes this year, relative to the 20 that happened the year before in 2023. So maybe you could just talk about the fundamental impacts of these changes, how you guys decide to make these changes. It became a lot clearer to us that, you know, why you were expecting what you were expecting once we heard about the Delta changes.
Yeah.
Maybe just unpack all of what we know about the refreshes and how you come up and derive that strategy.
Yeah. So card fee or, you know, internally, we use the word subscription fee or membership fee. That's how we think about this fee, and also the relationship that we have with our card members and how we think about what that fee covers. It's a very important line in our P&L for many reasons, because it represents exactly what we want to do in terms of developing premium relationship, quality relationship with card members. You know, there's something to be said about the fact that when someone signs up for a Platinum Card, the first thing they do is actually pay us $695, right? And that's the first thing they do, and that defines a little bit their relationship.
The other thing that the growth of card fee represents, which I think is also a very, you know, significant strength of American Express, is, you know, to grow that number, there's many things you need to do, but there's at least two things, right? One is, of course, you need to onboard more and more fee-paying card members. The second thing you need to do is you need to win the renewal decision. Every card member, once a year, has to make a decision whether they're renewing their membership with us or not. And if there's one thing that American Express is great at, is actually that. And that's exactly what is generating this very strong growth that you've seen on this subscription fee.
It's the fact that people are renewing, and as we actually raise prices, people are re-engaging with us, and we're repricing the back book, and people are very confident, you know, paying this fee. And we keep onboarding more and more fee-paying card members, and that's the kind of, like, dynamic that represents, you know, this premium-ness of the portfolio. In terms of, you know, the thinking behind the cadence of product refreshes, it's definitely something that Steve took on when he became CEO, and it's to increase the discipline and the cadence behind those product refreshes, because a lot of good things happen when you do a product refresh, right? First, it creates a demand, you know, at the top of the acquisition funnel. It allows us as well to deploy more marketing dollars, you know, cost-efficient way.
It allows us, as well, to re-engage with plenty of tenured card members with a refreshed value proposition and keep that relationship dynamic. And so there's a lot of good things that happened downstream when you refresh a product, and that's why definitely it's a focus for us, and that's why we have 40 refreshes this year across the world.
I guess, like, history has shown there's not been an adverse impact, right? It's obviously been quite successful.
Right.
How do you measure, you know, whether or not you'd see that adverse impact, you know? Like, when did you go too far?
Sure, yeah.
I'm not sure if I'm asking the question correctly, but-
Yeah, I get it. I get it.
Yeah.
So listen, I, as you know, spent 26 years at American Express, and most of my time in international, and I don't know how many product refreshes I've seen, but I've seen a lot. I recall just once where we said, "Oof, we went too far." It's actually not that we went too far, it's that the value proposition that we added to the product was not rich enough. There was, like, one case out of, you know, hundreds maybe. The rule is... And, it's also because that's how we approach it, right? The rule is that we try to make it worth, you know, the incremental fee.
So we infuse more benefits into the products, and we price for it, but we also try to make it, you know, accretive in terms of the value for the card member. And that's why we haven't seen adverse effect. And on premium products specifically, and I know you know that, you know, if you look at Platinum, which is, you know what? I was about to say the most premium product we have. It's not, right? The Centurion Card, but Centurion Card is a different category. Platinum across the world, you know, the fee in Mexico is $1,300, in Japan, $1,000. So if anything, you know, the U.S. is still very far behind in terms of price point. So I do feel that we have not hit the ceiling.
You know, in terms of how we measure the kind of like whether we're going too far, you know, the best indicator is the renewal rate, right? When we move people to a different price point, when we move card members to a higher fee, are they renewing their membership or not? And there, we actually see that the vast majority of them do that. When they don't, they typically downgrade. It's people at that point who would say, "Maybe I don't need a Platinum Card anymore, I'll go to Gold Card." But franchise attrition, very, very, very small.
A lot of smiles when you said, "We're not done in the U.S.," you know?
Yeah.
Okay. I guess, you know, just going back to one of the questions I had and thoughts I had, I mean, Delta made it very clear why you guys expect sort of the cadence of the growth-
Yeah
... over the course. I mean, do we know about other refreshes? Like, are there any larger ones? I'm gonna try asking the question, see if I can answer.
Yeah, I see that. So we're not gonna... I'm not gonna pre-announce, but yes, there are some refreshes in the pipeline. I need to say that out of the 40 that we announced, and I was surprised there, you know, how that number was picked up by investors and, and media. Most of them are out there in international, right?
Mm-hmm.
And there are many refreshes happening there. But in the U.S., yes, there are more to come.
Okay
... this year, but you'll see, you'll see that.
Does that happen, like, these announcements happen at any point through the year, or are they-
No, we try, we try to kind of sequence them in our, you know, during the year, and, you know, because it comes with, you know, tech-
Market
... capacity, marketing, messaging, media plans. So, we try to not do, you know, two or three product refreshes at the same time.
Yeah. So I wanna move on to the Millennial and Gen Z conversation. I think it's been amazing how that cohort has contributed to the growth, because I remember way back when, during the Costco period, people were thinking the opposite, like they would never contribute, right? So I think it's been amazing how you guys have sort of remixed the growth algorithm. Now you kind of hear the other side of it a little bit, where people are concerned that it is some part of your balance sheet growth, and that could be part of the problem that you might face as those customers face adverse economic scenarios. I'm just curious how you get comfortable with the cohorts that you're underwriting from a balance sheet perspective, and maybe the success points on the Millennial and Gen Z side.
Yeah. So I'm glad... So I like the way you're asking the question because I think that's the way to think about it, right? Back then, you know, go, say, go back 10 years ago, there were always two questions that investors were asking. The first question was, "You've got great products for my father, but you're not winning with the younger card members." The other question was, you know, "Why is American Express not accepted everywhere?" And these were the two big strategic questions that people had, and, and it was not easy to answer those questions. We addressed both points. We have parity coverage in the U.S. now, and we are winning with younger cohorts.
Mm-hmm.
And I'm—listen, this is a big win for us. As you said, you know, from a credit standpoint, we always had young card members; we just have a higher proportion now. From a credit standpoint, you know, I'm not too concerned with that. You know, this is something that obviously we need to monitor, but, you know, I think at Investor Day in 2022, we shared some metrics around the average FICO of those younger card members. For Millennials and Gen Z, the average FICO is 750, and for the older generation it was, like, 775, so a bit stronger, as you would expect. But it's also because they have longer tenure in the bureaus and maybe less debt. That makes a ton of sense. But... You know, take a step back.
The economics of the relationship we're trying to build with younger card members-
Yeah
... is a long game. You know, I told you a minute ago about the, our confidence that we have in retaining relationships for a long period of time. There was another number that was shared at Investor Day in 2022, and that was the fact that with those younger cohorts, we expect that relationship to last 18 years longer. So if you looked at the lifetime value of those relationships that we are building with the younger cohorts, it's worth a lot in the coming years, right? And that's how we think about it. There is a lot of, the word we use internally, there's a lot of embedded growth in building those relationships, nurturing those relationships with the younger card members, so I feel very good about those.
Can you, can you maybe compare and contrast Millennials, Gen Z to the path your legacy-
Yeah
... customers took? So as we look at this whole embedded growth phenomenon, like, how should we think about the stairsteps there? Because I'm sure that we're very early, right-
Yeah
... in the life cycle of these Millennials and Gen Zs.
Yeah, but-
Maybe more the Gen Z than the Millennials, but still.
Yeah. But, we already know a lot about, you know, about the younger card members. And for us, you know, the definition we use internally is below the age of 35. And I like, anyone below the age of 35 is young to me. I don't know how you think about it, but it's young.
Yes, I was thinking 50.
All right. Yeah, maybe we can, maybe we can adopt that.
Yeah. I was hoping.
Uh.
Yeah.
They're you know, it's exactly as you, as you think it is. The younger card members, they typically spend a bit less initially, that they're more, the older card members they're more engaged with their value proposition. They take, they enjoy the benefits a lot more. They're also more digitally engaged, and also there is, like, an interesting thing, which is sitting at the intersection of the two big strategic questions that I talked about earlier around coverage. When you sign up for an American Express card today, say you are 32 years old, and you can actually either like you don't know that 10 or 15 years ago, one of the question you needed to ask to every merchant was, "Do you take Amex?" Right?
So they don't, we haven't trained them to ask that question, so we typically get a bigger share of wallet.
Mm-hmm.
We start, therefore, with a higher penetration than older card members. And as you would expect, they are more digitally engaged. They self-serve a lot more in the app. So there's a lot of good things that are coming with those younger card members and, and as they kind of, like, flow through, as that, you know, those vintages pile up, and they flow through the system, we see the implication of that in their servicing metrics. You know, and, and it's net-net, it's a very good thing for us.
Yeah, absolutely. Maybe just on that thought process, just engagement levels.
Yeah.
How is your engagement level today compared to the past? And, like, how much opportunity is there to improve engagement with your cardholder base?
Yeah. We always try. You know, I would say, you know, there are people at American Express who actually spend their entire time thinking about that, and there are many things we do, and especially, you know, with the relationship that we have with merchants, we try as well to develop offers. You know, if you have an American Express card, and, you know, you can see in the app that there are offers, and we try to push, you know, more offers to card members, and that's definitely something we're trying to do. To create a reason to go in the app to see, you know, some of these offers, to sign up for them, and just get further value.
So, you know, we constantly try to upgrade card members, and we know that, you know, the more premium the product is, the higher share of wallet. When you get into the Platinum Centurion space, you typically get, you know, most of the wallet of the card members.
Mm-hmm.
So that marketing machine, that marketing engine, is working really well at American Express, and it's one thing that we do really well, right? Something that is super valuable is this upgrade path that we build with card member over their... You know, over time. You know, we nurture those relationships, and we have tactics and techniques to maintain those relationships, to upgrade those relationships. And we try, you know, to get better at it every year.
There's no statistic around that, right? I mean, obviously, there's trend-
There are a lot of statistics, but we don't make them public.
All right, fair. I gotta try. I gotta keep trying, okay?
Yeah. I see that.
Don't, uh, don't-
You should.
Yeah. All right. So obviously, T&E.
Yeah
... big component of your business model, has been a home run over the last several years, post-COVID. I'm just curious if you feel like there's some T&E fatigue at this point in time, and obviously, you know, you've had some mixed statistics on corporate spending. Maybe you just talk through all of that.
Yeah. Yeah. So there was definitely... You've heard the word, revenge travel, right after COVID, so we're past that point. We are, we're not in that space anymore. This being said, T&E spend in Q4 was up 9%, and we talked about, restaurant spend in particular, which is now the biggest category for us, was up double digit. I think it was 11%. And if there is a dr- a discretionary category, it's that, right? Restaurant spend, which, you know, still says a lot about our the premium-ness of our card member base. It's a very important category for us, hence, the reason why we have- we made the acquisition of Resy.
It very much sits at the intersection of what we want to do, which is, you know, create experiences at scale for our card members. You know, if you have the Resy app, and you put your American Express credentials in the app, there are specific slots or tables that are only available to you, or you get notified first, right? If you want that table, and it's, you know, it's there, it's fully booked, you're gonna get notified, but if you have a Platinum Card, you jump the queue and get to the top. So it's a way for us to create experiences and delight the card members at scale in leveraging technology, so very, very important category. You mentioned corporate spend.
Listen, corporate spend is not back, in terms of T&E versus where it was pre-COVID. It varies quite a lot by industry. Consultants are still traveling a lot, but tech firms, you know, are typically embrace their, you know, the Zoom technology and are traveling a lot less. So it varies a lot. I don't know, you know, whether it will come back to the initial level. I think there's been a permanent change in that space.
Yeah, I guess the good news, it's not as big of a revenue driver.
It's not. You know, it's an important segment for us, but it's not a big contributor to our economics. You're right.
... And maybe just on a related, the small business growth has been slower.
Yeah.
You know, maybe, maybe just talk about if there's any green shoots, any signs that it might rebound.
So, there's a lot of things that are going well in that space. The first thing is the demand from new card members is very strong, and the quality of that demand from a credit profile standpoint is very strong. We look at retention rates, very strong. Credit numbers, very strong as well. So it's, there's a lot of, you know, I don't know whether these are green shoots, but there's a lot of good things happening in that space. What's happening, though, is that the tenure card member base, you know, is spending a bit less than they were in the past, and what we call organic spend, which is our, our version of same-store sales, is, is negative and has been for, for a few quarters now.
So listen, you know, this group of—this segment, this group of card members is going through a lot with the interest rates, with, you know, supply chain disruption, with, you know, the massive bounce-back post-COVID. You know, it will take a while probably to settle. Importantly, for us, the assumption we made from a planning standpoint and to, you know, to compute our guidance is that the level of spend is just gonna maintain in the zone of where we were in Q4, and that's, as I said, that's where we are right now.
I do want to talk about NII. I know you guys talked a lot about it yesterday-
Yeah
... so I don't want to exhaust. There's a lot there, and you guys can read the transcripts there, but I'm just at a high level. You know, people have always been concerned about the mix of NII as a percentage of the total-
Yeah
... revenues, right? That's sort of the marker. I know there's different variables driving it, the liabilities are driving it as well as the assets, you know. I get it, but, like, how big is NII ultimately going to get to as a percentage of total revenues? You know, what's the, what's the red line?
Yeah.
If you could just talk about that.
You know, I don't know where the red line is, and I'll let you decide where it is. But there's definitely a lot of-
We take a poll?
Yeah, we can, actually. It would be interesting. As you said, when you look at NII, for us, it's important to tease out what is asset growth versus margin expansion, spread expansion. And asset growth, total asset growth was 13% in Q4. Lending balances were 17%, not that different from the rest of the industry. So it's not like we are outgrowing massively, the rest of the industry. Although NII was up, you know, in the 30% range, you know, lending balances were up 17%, so the rest is spread expansion. And that spread expansion, one very big contributor of that spread expansion is the fact that over the last, I would say, 10 years, we transformed the way we fund American Express. We used to...
You know, if you, you know, we were going back in time, a few minutes ago, so if you go back to the great financial crisis before we became a bank holding company, most of the funding for the firm was coming from commercial paper, asset-backed securities, wholesale loans, so expensive. What we did, we introduced, high-yield savings accounts, and despite the name, it's a much, lower funding cost for us. You know, a rule of thumb is take it, like, at 70% of the Fed funds rate, right? The beta is about 0.7. And over time, we have increased in our funding stack, you know, the weight of that, and that has contributed to increasing the NII quite a lot. This is margin expansion. This is ROA increase, ROE increase, so, you know, we think it's good stuff.
The other thing is this, if you take not a finance view, but a more business view, our card members need some revolving facility, and if we don't give it to them, they're gonna get it from someone else. So since we have these relationships, since we want to have their share of mind and their share of wallet, we think it's right for us to play in that space, and we typically get a big share of their spending wallet and a much smaller share of their lending wallet, and so we're trying to rebalance that a little bit here.
And the last thing I would say in that space, if you unpack a little bit, where the growth is coming from, we have introduced a new feature, and we don't talk a lot about it, but it's the biggest contributor to the balance growth. It's Pay Over Time. Pay Over Time is a capability that is attached to paying-in-full products, so charge card, like Platinum and Gold, and it allows card members to have a revolving facility for big-ticket items. You know, you buy a TV, you take your family on to a vacation, and you want to spread that over a period of time, several months. We give you that facility. Importantly, that lending facility, because it's attached to a very premium base, comes with very low credit risk.
It's very different to grow balances this way versus balance transfers at 0%, where you have a lot of balance parkers, and you have a lot of people who just like seeking credit for the sake of credit.
Mm-hmm.
This is not the way we're growing balances. It's super important to understand that.
No, that's fair. One more on revenue is just international markets.
Yeah.
The billed business growth has definitely been growing, outpacing U.S. growth. I mean, can you sustain this mid-teens type growth on a go-forward basis? And maybe just share with us what markets you're being most successful in targeting.
Yeah. There are, when we talk about international, there's like something like 25 or 27 markets, but there are five that are, you know, much more important, for us: Japan, Australia, the U.K., Canada, and Mexico. This is also, if you were to look at where the revenue pool is, you would find that it's mostly there. If you take Russia and China out, of course, for obvious reasons. So this is where we focused on. You know, and if you were to, to look at those markets, we typically start with a much, much lower, market share, so our opportunity to grow is much higher. We also typically have a much more premium base, so a lot more charge card, a lot more premium. I told you about the price point, typically much higher level.
So we feel that, you know... And coverage, which has always been an issue, is actually improving. And there are markets such as Japan, where I don't know what, you know, maybe parity is not the right word, but we are near parity in Japan, and we have a very small market share, and it's a painful market, and it's a market where brands matter, and it's a market—it's the most important market we have out there in international. It's a big economy, and as I said, very small market share. So I feel confident about the opportunity, and you might remember, Sanjay, pre-COVID, if you look at the eight quarters prior to COVID, we were growing in double digits, you know, every quarter. And so we're back to that range of 12, 13% billing growth-
Mm-hmm
... and I think we can sustain that for a period of time. The way we think about international is accretive in terms of pretty much every single metric that we have in the company versus the U.S.
Got it. So maybe we shift gears, talk about the competitive landscape. I think we've put to bed that there's, like, many viable bank competitors, and we're gonna talk about Capital One getting and buying Discover. All right? But I'm just curious, we back that out and we just think about the competitive dynamics, how, how do you feel about your prospects relative to five years ago when we were in the wars, right?
Yeah.
What are you doing to prevent something like that happening again?
You know, this is one of the best thing that happened to American Express, is that competitors started to focus on that space. I say this now, you know, I would say back in 2016, we were probably not feeling the same way. But I say now, today, the fact that some competitors are very focused on the premium space, which was, you know, typical of American Express' core value proposition, is a good thing, is a net good thing. It did a lot of things. It made us better, but more importantly, it made the premium category expand. There's a lot more premium cards in the U.S. today than there were, you know, five, six years ago. And guess what? What's happening is that when the category expands, who is benefiting the most from that expansion? The category leader.
It's very telling, and I'm sure you've seen it as well, every time our competitors announce either a new value proposition or a change, or... Because they're copying essentially a lot of what we do, right? We went into lounges, they open up lounges, right? And they, you know, either our competitors would open a new lounge. By the way, we just announced that we just opened our biggest lounge in Atlanta. You should come and visit if you're a Platinum Card member. You know, so typically when they announce you know, the new value proposition, the media would pick it up, and there would always be an article that says, "By the way, American Express has so many lounges, so many more lounges. They're so much better. They're so much nicer." We benefit from that.
One of the best thing that happened was that expansion of their premium category. So, you know, more competition, the better for us. I'm not concerned. It forces us to remain ahead of the pack. It, you know, it's part of what drives their, you know, the cadence of product refreshes as well. We need, we need to keep innovating, but net-net, I think, is a good thing.
You know, Capital One has been at the edges of sort of what you guys-
Yeah
... have been trying to do among the transactor space. Now they have a network. I'm just curious how you think it changes anything, right? Like, then, if to the extent that the deal passes and they get this network, what more could they do that could have an impact on you?
Yeah. So, I don't have any information that you don't have in that space, and I think you have yours-
And we'll have Rich here and
Yeah, exactly.
Announce.
So I'm not, I'm not gonna go too far in that, in that space. But I feel, I feel confident and comfortable about, about our, our position. And, you know, the one takeaway for you is that it's not impacting or it's not changing our growth plans. You know, the first question that you had was about this growth plan and, and what we were doing about it. As I said, we are focused on executing. We know exactly what we need to do, and we're gonna keep doing it. The fact that Cap One and Discover decided to, to get together, it's not gonna impact us much. It's not gonna change a lot. We'll watch that. They're gonna have...
They have, you know, a long, you know, multi-year integration plan that's gonna keep them busy during this next, you know, two or three years as they work on integration. We're gonna keep growing the company, and we'll see where we are, you know, two or three years from now. But I'm not concerned. So I'm gonna—American Express, the cost of fraud is, I think, a third of what you see on their competitive networks, and it's because we have a lot more data from the on every transaction, which allows us to identify those out-of-pattern transactions a lot better than our competitors. There are many other benefits I told you about. You know, definitely something that we're pushing, and if you're an American Express card member, you've seen it, right?
It's those offers, you know, we discuss, negotiate with merchant offers that they can make and push in a targeted way directly onto specific card members. You know, these are things that you can do when you have the direct relationship with the merchant and the direct relationship with the card member. And so that data, you know, availability is, for us, critical. That's the way we developed American Express over the years. It allowed us as well to. You know, every time there was a regulation, it was typically four-party schemes that were regulated, and three-party schemes, such as American Express, because we negotiate one-on-one with a merchant, one-on-one with a card member, was kept out of, out of this. So, you know, there's many upsides. It's challenging to do it, but we feel that that was the way for us.
Discover and Capital One are in a different space because they're gonna merge. They're gonna need to integrate, right? It took us years to build this, and they're gonna have to integrate those two companies. No one has done it before. Good luck to them. And as I said, you know, it's not gonna change much in terms of what we're gonna do.