Ladies and gentlemen, our program is about to begin. As you find your way to your seats, please take a moment to silence your electronic devices. Please welcome American Express Chairman and Chief Executive Officer, Steve Squeri.
Good morning, everybody. As you can see, we did this in the morning this year versus the afternoon. We ordered no snow. For those of you who were brave enough to make it last year, it was quite the March day. Anyway. Welcome, everyone, and thank you for joining us both in person and on the webcast.
Welcome to our 2019 Investor Day. Today, we are going to go through four presentations. We will take a break after the digital presentation. We will finish, as we always do, with a Q&A session. I will start by doing a quick recap of the strong momentum we built in 2018 and talk about our foundation that enables us to capture new growth opportunities.
I will spend most of my time discussing how we will accelerate progress against our strategic imperatives by focusing on our customers as a platform for growth, expanding strategic partnerships, and by implementing a more focused international strategy. After my presentation, we will spotlight progress on two of our strategic imperatives.
Anna Marrs, our new head of Global Commercial Services, will do a deeper dive on B2B payments. Mohammed Badi, our new Chief Strategy Officer, will discuss how we are continuing to enhance our digital capabilities. Jeff will discuss our financial growth algorithm, which enables us to invest consistently for share, scale, and relevance. He will explain why we have confidence in our ability in today's environment to deliver high levels of revenue growth, which is the foundation for steady, consistent, double-digit EPS growth. Let us get started with a quick review of 2018. Our 2018 performance was strong across the enterprise.
We delivered record revenues up 10% on an FX-adjusted basis, as well as 24% adjusted EPS growth. Proprietary billings were up 11% overall. We grew loans 13%, and return on equity was 34%. Our brand continued to resonate in the marketplace as we added a record number of new proprietary cards across the franchise.
Every line of business contributed to these strong results. We launched a number of new and enhanced propositions and achieved notable business milestones across the organization. In consumer, we grew share across the board. We launched several new and expanded products, including new co-brand cards with Hilton and Marriott. Importantly, nearly 50% of our new customers are millennials, and almost two-thirds are on a fee product.
In commercial, we launched a number of new and enhanced products for our SME customers, including a new co-brand card with Amazon in the U.S., while seeing 23% growth in international SME billings. In the merchant business, we signed over 1.6 million merchants in the U.S., the second consecutive year we've added over 1 million new merchants. We're on track to reach our goal of virtual parity coverage with Visa Mastercard in the U.S. by the end of the year. Cutting across all these businesses are new digital offerings that give our customers greater access to unique experiences and capabilities.
Key to delivering our 2018 performance was our focus on the four strategic imperatives that you've heard me talk about. They include expanding our leadership in both premium consumer and commercial payments, strengthening our network, and becoming essential in our customers' digital lives. The imperatives were supported by our investment strategy, which is aimed at achieving three key objectives: growing share, for example, by accelerating billings and lending growth. Driving scale by increasing new customers acquired and merchants signed.
Strengthening relevance by increasing engagement with our card members, merchants, and partners, especially digital engagement. As you can see by the results I just shared, our investment strategy is working. Additionally, our performance is being driven by some key structural changes. We have completed the globalization of our core lines of business.
We're managing strategic partners such as Delta, Hilton, and Marriott from an enterprise perspective, and we continue to create centers of excellence, like marketing operations, where processes are scalable and applicable across business units and geographies. We're building new technology platforms such as Amex One, which enables us to deploy our mobile app globally with one code base. We've established a new enterprise-wide brand platform that's global and supports all of our businesses. Leading our organization is a diverse and talented team who, in my view, are the best and most qualified in the industry.
As I said at last year's meeting, we have a great mix of experienced leaders who grew up at American Express, alongside more recent members who bring valuable experience from outside the company. This mix brings together different perspectives and ideas that give us a competitive edge.
Our new team members, who you'll hear from today, are recognized leaders in our industry. Anna Marrs, who joined our leadership team last September, has a wealth of knowledge in commercial banking. Mohammed Badi, who also joined last fall, has many years of experience in strategic consulting in the payment space. We're also changing the way we operate our business. We've moved from working on a game plan that was focused on repositioning the company to a strategy that is firmly focused on growth. Instead of operating with a business unit approach, we're focused on doing what's best for the enterprise overall with a leadership team whose goals and performance are measured by a single scorecard.
Our Tier 1 countries are now managed with integrated country plans. We're shifting from a card-focused approach to a membership-focused approach, and we're providing services beyond our traditional travel offerings by taking a holistic approach to the lifestyle needs of our consumer and commercial customers. Before discussing our plan for accelerating progress going forward, I want to briefly walk you through our foundation that we're leveraging to sustain growth.
Our foundation starts with our differentiated business model, which is built on our end-to-end payments platform that I discussed in detail at last year's Investor Day. Our end-to-end integrated payments platform creates value that's difficult to replicate. The platform enables relationships with all players in the commerce path, which includes millions of Card Members and merchants of all sizes, and we perform all the aspects of the payments process between them.
Our payments platform provides us with control over the economics of each transaction and the rich data that we use to drive the models that help us grow our business. The rapidly changing payments landscape features many attractive growth opportunities for us, and our model puts us in an excellent position to take advantage of them. We continue to see a secular shift from cash and checks to cards and other payment solutions, as well as a shift to e-commerce and mobile payments. These factors are expected to drive global industry growth significantly across both consumer and commercial.
Putting these industry growth opportunities together with our differentiated business model and our investment strategy is what underpins our financial growth algorithm. In today's environment, this growth algorithm delivers high levels of revenue growth that form the foundation for steady and consistent double-digit EPS growth.
Our investment strategy delivered performance in 2018 that was consistent with our growth algorithm. For 2019, our revenue guidance of 8%-10% and earnings per share guidance in the range of $7.85-$8.35 is also consistent with the levels we're targeting with our growth algorithm.
What's important to take away is this: we're committed to investing to grow share, scale, and relevance, as we believe this will lead to the greatest long-term value creation. Our strategic imperatives have served us well. In an evolving payments landscape, they have focused our organization on our customers and our most significant growth opportunities.
2018 was just the first step. As I mentioned at the beginning of my presentation, I want to share with you today how we're putting some meat on the bones of our enterprise strategy with a focus on three company-wide initiatives that will accelerate progress against all our strategic imperatives. First, we're focused on our diversified customer base as a platform for growth by using additional products and services to deepen relationships with current customers and acquiring new ones.
Second, we're expanding our powerful network of strategic partners to bring additional value propositions to our customers. Third, to continue our strong growth trajectory outside the U.S., we've adopted a more focused international strategy, which is guiding where we're prioritizing our incremental investments.
Our first enterprise-wide initiative is using our diverse customer base as a platform for growth. One of our differentiated assets is our large, high-spending customer base. Customer engagement is strong. Average spend on our cards is three times greater than our competitors.
Because of our integrated model, we deliver approximately three times more spend capacity for our U.S. small business customers. But we have a lot more untapped opportunity. For example, we now capture only about 20% of our consumer customers' borrowing. Less than 50% of our small business customers have a consumer relationship with us, and a high percentage of our SME customers have only one business product with us. As you can see, we have a significant opportunity to deepen customer engagement further.
We've already made strides to expand relationships with existing customers. We're enhancing targeting, delivering personalized offers, and expanding digital distribution channels with good results. For example, consumer customers accepted over 1 million upgrades and additional products in 2018 alone. We're seeing a 30% lift in spending when a customer upgrades their product, and a 40% lift when they add an additional product. In addition, we see a 43% lift in spending when our U.S. SME customers adopt an AP automation solution.
To drive additional growth within our current customer base and continue to attract new customers, we're in the process of redefining core membership from a card-focused approach to a member-focused one. Rather than cards having different payment and servicing functionality, we're moving to a new membership experience that's consistent across our consumer products.
Every member can choose to pay, revolve, or plan a transaction, or message our mobile concierge no matter what Amex product they have. This will take some time to roll out globally across all our products, but the result will be an enhanced membership experience that is completely accessible on mobile and that provides greater daily relevance and ease of interaction, as well as to help us better serve our customers' spending and borrowing needs. We've talked in the past about our referral program, which we call Member Get Member.
This is our second-largest acquisition channel globally, and as we continue to expand the program, it continues to deliver outstanding results in terms of customer engagement and acquiring new customers who are high spending and have excellent credit profiles. Our Member Get Member program creates a network effect. In 2018, 33% of those who referred through this program successfully referred someone else. All the participants in our ecosystem drive value to one another.
With our card member and merchant relationships and the data analytics we get through our integrated model, we can customize audiences for our partners and provide valuable benefits to our card members. Our partners see the value in this. In the last three years, we have doubled the co-funded value we're delivering from our merchants to our card members.
Additionally, we have an opportunity to further connect our constituents to one another, whether consumers, businesses, or merchants, which also creates a powerful network effect. What should you take away from our strategy of building on our customer as a platform for growth?
First, we're taking our high-spending customer base, already a valuable asset, and creating opportunities to make it even more valuable. We're redefining our core membership philosophy by evolving from a card-focused experience to a mobile, member-focused experience where we can easily unlock additional products and services in response to a customer's needs.
Finally, our ability to connect participants and provide value through our integrated model presents an opportunity to accelerate our growth. The second enterprise-wide initiative is expanding our use of partnerships, which are essential to each of our strategic imperatives. Partnerships take many forms.
Some of our most visible partnerships are co-brands, but we also have a wide and growing range of digital capability and coverage partnerships as well. Our co-brands are based on deep enterprise-wide partnerships. Our partners are attracted to our unique assets, such as our high-spending global consumer base, our premium consumer and business travel customers, our industry-leading small business franchise, our brand, and our exceptional service.
These co-brand partnerships are mutually beneficial. Just as our partners receive benefits from us, we also receive benefits from them as well, such as access to new customers and rewards and experiences that our card members value. We strive to integrate capabilities and services beyond payments, enriching our mutual customers' overall experience. Our co-brand portfolio is large and growing, and because of our business model, we have differentiated strengths in T&E and small business categories that are extremely attractive to our partners.
We have over 50 co-brand partners around the world, including over 20 airline partnerships. We also have the largest number of small business co-brands in the U.S. How does this play itself out? Let's talk about Amazon. Amazon is focused on building out their B2B capabilities and customer base.
In looking for a co-brand partner, they wanted one with a demonstrated ability to access the U.S. small business segment and the capability to provide these SMEs with the spending power to transact. With Hilton, CEO Chris Nassetta was attracted to our premium consumer and business travel assets, which speaks to our ability to use our co-brand relationships to help Hilton achieve their ultimate goal of putting heads in beds. Just a little over a week ago, we announced a new 10-year agreement with Air Canada, which includes new co-brand cards and participation in our Membership Rewards program.
Once again, our ability to reach premium consumers and our travel assets helped us to secure this partnership. Let's take a closer look at Delta, which is our largest co-brand partner and the one we've had the longest relationship with. It is a great example of a mutually beneficial partnership. Recently, Delta CEO Ed Bastian spoke at a meeting of our top 500 leaders.
He told us that American Express is one of Delta's most important partners in the world. When asked why this is, he said, "The magic of our enduring relationship is that we both lead with our values and our culture, and we both want our brands to be a premium experience to create an expectation of great service for our customers. We share that." This is a true partnership, a partnership steeped in common values, strong executive relationships, and 22 years of history.
It's also a partnership that takes advantage of virtually all of our unique assets and capabilities. We benefit from Delta's large customer base. For example, with Delta, we have a merchant relationship, we have a Membership Rewards relationship, we have a consumer and small business co-brand cards, we drive consumer and business travelers to Delta, we provide lounge access to our mutual customers, and we're Delta's corporate card and B2B purchasing card provider.
We're continuing to explore ways to enhance and expand the relationship. As a result, we continue to see strong growth in the Delta portfolio. In 2018, spending grew by double digits, and we acquired over 1 million new accounts in each of the last two years. We're also continuing to expand our digital partnerships to be even more essential in our customers' digital lives.
For consumers, we're enabling partners to plug our payment capabilities into their ecosystems, such as with Apple Pay, where we offer applications in 16 countries, the most of any payment provider. This is made possible by the fact that we have a global footprint and technology platforms that are easy to integrate with. Said another way, Apple only has to deal with one entity globally, an advantage of our integrated model for our partners.
PayPal has been an important partner for many years. When PayPal CEO Dan Schulman and I got together several months ago, our objective was to create a bigger and better partnership between the two companies by leveraging each other's key assets. We'll use PayPal's large merchant footprint and our Pay with Points capability to unlock the largest reward bank in the industry for our customers.
We also wanted to enable our digitally savvy Card Member base to send money via Venmo or PayPal directly from the Amex mobile app. In working with Amazon, they not only wanted access to our small business customer base with a new co-brand card, but we also wanted to give our mutual customers the ability to easily track their business spending through a capability that provides them item-by-item visibility into their Amazon Business purchases.
We're also adding partners that bring new capabilities and services to our customers. We're offering new B2B products to our commercial customers that automate the accounts payable process and streamline supplier payments with partners such as Bill.com and Synaptic. We're giving merchants and business customers access to financing through a variety of partnerships. Additionally, our partnership with GreenSky, where we're enabling our merchants to offer point-of-sale financing to their customers.
We're embedding lifestyle tools and capabilities into our digital ecosystem with partners like LoungeBuddy, a digital platform that enables travelers to find, book, and access airport lounges worldwide. After partnering with LoungeBuddy for the past few years, we announced on Monday that we're acquiring the company, which we expect to close in April.
Finally, we're working with a number of merchant acquiring partners such as those you see on the slide, as well as our bank partners, to expand our global merchant footprint. We've been successfully leveraging these relationships that we have with acquiring partners to close the coverage gap in the U.S., and we're doing the same internationally. Here are the key takeaways regarding our partnership initiatives. We're expanding our focus on mutually beneficial strategic partnerships, and we're using them to drive growth across all our businesses.
We're using our unique assets to help deepen and expand our partner network to improve our overall customer experience. Our partnerships span all aspects of our integrated business model and are critically important to driving progress against all of our strategic imperatives. Turning to international. Last year, we delivered 17% FX-adjusted growth in international consumer spend and 23% FX-adjusted growth in SME spend. Our increased focus on coverage is working, delivering a double-digit percent increase in new locations in force globally in 2018.
When you compare international growth to our roughly 9% billings growth for the whole company, you see how well international is doing for us. Moving forward, we're implementing a more focused enterprise-level strategy for our international business that marks a fundamental shift in how we operate. We're selectively increasing our investments in international to drive share, scale, and relevance through a country-by-country approach.
We took a look at all the countries in which we do business and categorized them into three tiers based on our overall position and potential in each country. In tier 1 are the countries where we have our largest presence outside the U.S., representing approximately 66% of our international billings.
These are also where some of the most attractive growth opportunities are, given the relatively modest share we have in these countries. In tier 1 countries, we're making investments in all of our lines of business. For example, in the U.K., we're focusing on expanding coverage in several vertical categories nationally and with smaller merchants locally in London. We've reorientated our merchant sales force, added a new telesales team, and we're testing new merchant pricing.
In commercial, we're launching new and enhanced card products to grow our SME business, and we're partnering with local fintechs to meet our small business customers' financing needs. In consumer, we're working on strengthening our premium card portfolio and creating new partnerships. Tier 2 countries represent another 9% of our international billings. Here, we're making investments in at least one or two businesses.
We're also using tier 2 countries to test new product ideas that we may export to larger markets. The Nordics are a good example of our tier 2 approach. We're focusing our investments on expanding our premium consumer base. We've launched a new co-brand card with SAS in Norway. We've added lending functionality to all of our consumer card products. We're digitizing all aspects of the customer experience, from acquisitions to servicing.
Tier 3 is a broad array of countries where we're focusing primarily on increasing coverage. Tier 3 countries deliver approximately 25% of our international billings but include 90% of the countries in which we have a presence. We have proprietary businesses in some of these countries and bank partnerships in others.
What we've learned about coverage in the U.S. is that it's critical to driving overall customer satisfaction and increasing spend, which has been driving our high discount rate revenue growth. Given our spend-centric model, increased card member spending has driven additional lending growth as well, and our investments in improving card member value propositions also help to drive more discount revenue. It all starts with coverage. Without the proper coverage, you cannot capture spend.
Taking a page out of our U.S. playbook, we're applying the same logic by using our own sales force and our partners to increase coverage outside the U.S. Unlike the U.S., international is too large to tackle all countries at once. We've done an analysis of where our card members live and where they travel to determine how we should prioritize our coverage investments.
These investments are focused on specific countries as well as targeted cities and vertical merchant categories across all tiers. While we have different starting points in each of these categories, we've set an overall goal of increasing our international coverage by 20% over the next three years. The combination of these initiatives will increase overall merchant coverage significantly in international and add millions of new merchants to our network.
Let's take a look at the Caribbean and Puerto Rico, which are in tier 3, as an example of how our new, more focused approach works. We issue no cards in these countries, and in the past, we ran the Caribbean without looking at it from an enterprise perspective. What we realized, however, was that the Caribbean plays a crucial role in satisfying our U.S. and international customers' payment needs when they travel there.
We're now strongly focused on coverage across the region. Because of this focus, we signed 5 times as many merchants last year than we did in 2016 and increased locations in force by 46%. As a result of this initiative, Card Member satisfaction went up and we increased overall profitability as well. I want to spend a moment on China because there's a lot of interest in what we're doing there.
China, as you all know, represents an enormous growth opportunity. It's the world's largest payments market with huge growth potential over the long term. China is unique, we have to take a different approach to the market. Instead of entering China with our end-to-end integrated payments platform, we created a joint venture we are entering as a network.
We'll partner to issue cards and acquire merchants, we intend to bring to bear our differentiated expertise and assets when working with our partners. This will enable us to stay focused and leverage our existing network investments as we enter China. This approach gives us an opportunity to build scale, in so doing, drive additional volume when Chinese Card Members travel outside their home country. Establishing our business in China will be a long-term process.
We're excited that we're the first non-China based network to receive preparatory approval to build our business there. In summary, we have strong momentum in international, we have a long runway for growth. We've created a more focused strategy based on a tiered country approach to continue delivering share taking growth that is supported by our integrated model.
Our strategy includes a strong focus on increasing coverage across all countries in which we operate, which will help us sustain and accelerate growth across the enterprise. To recap, our focus on the four strategic imperatives I outlined on becoming CEO is producing strong results as we demonstrated in 2018, this focus will continue. We have established a strong foundation and momentum to sustain growth.
Going forward, we plan to accelerate our progress against our strategic imperatives through a focus on three enterprise-wide initiatives: focusing on our customers as a platform for growth, expanding strategic partnerships, implementing a more focused international strategy, which includes increasing coverage globally.
In closing, I am confident that our foundation, our enterprise strategy, the team that runs our company have set us on a course towards sustainable growth. With that, let me turn it over to Anna Marrs, President, Global Commercial Services, to talk about our growth opportunities in B2B payments.
Okay, good morning. As I'm new to American Express, I just wanted to start by introducing myself. Before joining last year as the President of Global Commercial Services, I ran the commercial banking business at Standard Chartered Bank and was also their regional CEO for ASEAN and South Asia.
Prior to McKinsey, I ran a financial information technology startup based in London. My career has been very international. Although I started work here in New York, I've now lived outside the U.S. for 19 years, 15 of those in London and four in Singapore. I joined Amex in large part because of my excitement about the commercial business.
We're a leader today with an opportunity to play an even greater role in B2B payments and working capital, both here in the U.S. and in our focus international countries. Here's the messages I want to convey today. First, Amex is already a leader in commercial payments. We have a distinctive customer base delivering strong results in a spend-centric model.
Second, we have many opportunities to grow. Future trends should enable us to increase our relevance in parts of the commercial landscape in which we're less well penetrated today. Third, we're investing behind these opportunities. I'll give examples of how we're investing to differentiate and grow our core card business to increase scale in business financing and supplier payments, and to digitize the customer experience. Finally, I'll touch on what the future looks like when we successfully execute our plans.
Let's start with an overview of the commercial business today. Commercial has a leading customer base. We serve 3.4 million businesses with 14.5 million card members. We think of these customers in two broad groups, SMEs and global and large customers. In SME in the U.S., we are the leading issuer of small business cards, larger than our nearest five competitors combined. SME customers don't want to think about financial services.
They want providers to be easy to use so they can focus on running their business. For global and large customers, our corporate card is, and has long been, the industry leader. We have relationships with more than 60% of the Fortune Global 500, and for these customers, what matters is global consistency, integrated tools, and data. Taken together, we're the number one commercial card issuer by volume across all segments globally.
To meet our customer needs, we offer a diverse suite of products. We have an industry-leading portfolio of charge, lending, and corporate T&E cards. In addition, we offer a wide range of supplier payment and working capital solutions that enable our customers to pay for what they need to run their businesses. Our commercial business is a significant driver of growth for American Express. We contribute approximately 40% of the company's total billed business.
We delivered strong financial results in 2018. Billings accelerated to 11%, driven by growth across our customer segments. We're continuing to gain momentum in our lending business as well, with 14% loan growth. As we think about our business model, it's worth stressing that the commercial business is very spend-centric. While Amex overall is 81% spend and fee based, 94% of commercial's revenue is driven by spend based discount revenue and fees.
Looking forward, as we plan to grow in both B2B payments and working capital, we expect commercial to remain a very spend-centric business. I'm now going to talk about the opportunities we see to expand on today's leadership position. First, I want to briefly cover how we define this opportunity. B2B payments is any payment flow between a business and another business, inclusive of AP supplier payments, employee-initiated T&E spending, and any other use case.
By working capital, we refer to short-term invoice and supply chain financing, term loans less than two years in duration, and any other short-term trade financing. For SMEs, this also includes borrowing on cards. Let's talk about the growth opportunity. You can see here that overall, B2B payments and working capital represent an estimated $90 billion profit pool in the U.S. and our top five international countries.
It's split roughly two-thirds SME and one-third global and large. You can also see the scale of both domestic and cross-border supplier payments. If you add up those four bars across SMEs and global and large, you get a $61 billion profit pool, $41 billion of domestic payments and $20 billion of international payments. Within this overall picture, we see three levers for Amex to grow.
First, the volume across B2B payments and working capital is growing at about 7% per year. As large participants in these categories today will benefit from that growth. Secondly, the supplier payment profit pools, that $61 billion of profit I cited earlier, are electronifying. Today, the majority of these payments are made by a check and ACH. In the future, more of these payments will be made electronically and therefore accessible to Amex.
Electronic payments are growing faster than the opportunity overall at a double-digit rate. Finally, while Amex is a significant player in some of these profit pools, we have much smaller shares than others. If we take global and large, for instance, today we capture a meaningful share of that $3 billion T&E profit pool. However, broader supplier payments represent a $14 billion profit pool, which we can attack with our growing set of supplier payment products. At this point, it's worth covering how we see the B2B payment and working capital landscape evolving over the years ahead as it drives much of the growth that I just cited.
Technology and data, evolving customer preferences, and macro trends are shifting expectations and creating new opportunities for our customers. Technology is transforming how companies small and large run their businesses.
More and more are switching to automated software-based solutions and leveraging enhanced data to improve performance and profitability. Our customers demand simplicity. They want intuitive, simple to use, and consumer-like experiences from their business tools and platforms. Finally, while an estimated 70% of U.S. B2B payments are still executed via paper check, there's an increasing shift away from traditional paper-based payments to electronic payments.
Steve spoke earlier how we're leveraging our customers as a platform for growth. It's also worth noting that in commercial, much of our opportunity also comes from existing customers. Despite our strong share in some B2B payment categories, we have real headroom to grow in other B2B payment and working capital needs. For example, U.S. SME, as we mentioned previously, we're the number one issuer of small business cards.
We still have a significant opportunity to deepen our relationships with customers, as only 33% of these customers actively use us for more than one commercial product. Breaking out international SME, although we continue to experience strong FX-adjusted billings growth of 25%, we're still under-penetrated, we have the potential to double down on our business, replicating our successful U.S. model while adapting to country specificities.
Finally, global and large. We have relationships with 63% of the Fortune Global 500, but we estimate that we've captured only about 2% of these customer AP files. Extending more deeply into global and large represents a meaningful platform for growth. To recap on this opportunity analysis, Amex has many areas of strength in B2B payments today. I go into our plans, you'll see how we're both focused on building on these strengths while expanding into historically less well-penetrated areas.
With our SME customers, we aim to play a very broad role as a leading provider of B2B payments and working capital. With global and large, our strategy is more focused, maintaining our T&E leadership while expanding more broadly into supplier payments. So far in this section, I've outlined a very large set of profit pools and covered how both industry trends and upside in our customer base create opportunities for growth.
Before I outline our forward plans, I wanted to pause on the base of assets we're attacking with both to ride broader industry trends and compete in adjacent areas. At the core, there's our integrated model, built upon our network of relationships with both buyers and suppliers. This model, which distinguishes us from major networks and traditional bank issuers, enables us to generate rich insights and deliver comprehensive economic value.
It also gives us pricing flexibility needed to continue to win in business, particularly as we attack the broader B2B supplier payments opportunity. Second, the scale of our marketing capabilities, face-to-face field teams, and servicing professionals. We have an organization of around 4,000 field and servicing colleagues that offer global reach and on-the-ground support to commercial customers.
We believe this positions us well for the future, as opposed to a branch-heavy distribution model, which will become less and less relevant as payments digitize and businesses just use less cash. We have a full product shelf today. I'm going to give some examples in the next section about some of our newer products. Our ability to deliver spending power. It enables us to give customers the spend capacity they need while managing their risk.
For our largest U.S. small business customers, we're able to provide line size 10 x higher than other card issuers. Finally, our brand. A synonym for service excellence, the American Express brand, which was once again named the world's most valuable financial services brand in 2018, enables us to attack the B2B opportunity from a position of trust. I'm now going to provide some examples of how we're driving growth in each of our customer segments.
First in this section, the mission. I think it's always important to ground a strategy in a mission, our mission in commercial is to be essential to our customers' business every day. We go into this presentation, we'll talk a lot about our very strong position in U.S. SME and T&E. Beyond this, we have the capabilities and the credibility to play a broader role in our customers' businesses.
As we expand, we'll become even more essential to how our customers do business. To deliver on this mission, we're executing on three overall strategic priorities. The overwhelming majority of our revenue in commercial today is from the card. To this end, we're focused on differentiating and growing our core card business by delivering new sources of customer value and forging innovative partnerships.
Second, we know B2B payment and working capital represent an enormous opportunity. To capture more of this opportunity, we're enhancing our capabilities and scaling to more customers. Finally, we're deepening engagement to this important channel by further strengthening our digital touch points and delivering a best-in-class, seamless digital experience. These priorities play out differently in each of our customer segments, so let's first have a look at our U.S. SME customers.
In U.S. business cards, we have a leadership position, but we need to continue to innovate to stay ahead. I'm going to provide two examples of how we're evolving our business cards to better address our SME customer needs. First, the Business Gold card. In November, we launched the new Business Gold card, which features Membership Rewards points that automatically adjust to a company's top two spending categories.
We also integrated a pay over time feature that gives businesses an option to pay part of their balance over time. Secondly, Business Platinum. We offer differentiated travel and business benefits for our Business Platinum card members, including a unique new B2B spend accelerator. Both cards continue to offer rewards, reloads, and no preset spending limits, giving customers the purchasing power that adjusts as their business grows.
To reflect the value of these new cards, we've increased the price of both of them, and early results from Business Gold launch are strong as we see improved lift in customer spend. Now let's cover how we're changing how we partner. As Steve spoke about earlier, American Express has a long history of building successful partnerships.
Our Business Platinum product, for example, includes benefits and offers through partnerships with Dell and WeWork. We recently launched co-branded travel cards, including the Hilton Honors card and Marriott Bonvoy Business card. In Q4 2018, we launched an innovative partnership with Amazon to create a seamless user experience with the powerful trust and backing of American Express. Let's bring this new partnership to life via a video.
For those following along via the webcast, please click on the link next to the slide titled "Amazon Partnership." Okay, we're really excited about that partnership with Amazon. While the card will likely always be where we start with the small business customer, the card alone does not meet all of our customers' needs.
SME customers want easy access to working capital and payments, we're investing to provide this. Building off our charge infrastructure, we've created products to offer customers easier-to-access short-term working capital. This extended product offering is relatively recent as compared to our traditional card products, it's been growing rapidly and will continue to be a way we focus on customers as a platform for growth.
As we saw earlier, the working capital profit pool is estimated at over $10 billion for U.S. SMEs alone, a profit pool in which we have a relatively small share today. I think a customer example brings it a bit more to life. We have an SME customer that's a growing security camera business based in Florida. The company was founded 12 years ago.
For the last 10 years, they've had an exclusive business card relationship with American Express. Two years ago, as an Amex merchant, they took a merchant financing loan to replace a loan from another provider. They went on to enroll in our invoice-based product, Working Capital Terms. With our support, the customer is able to more effectively manage their payment cycle and generate the cash flow necessary to grow and expand their business.
We have the opportunity across our SME base to replicate this to better address our customers' needs and help them grow their businesses. I spoke earlier about how technology is changing how businesses large and small are run. In SME, AP automation is a key trend, with customers looking for solutions that integrate seamlessly with our payment products.
As I mentioned earlier, nearly 70% of U.S. small business payments are still made via check, often involving manual steps. AP automation will change this. We have a suite of AP automation partners designed to meet customer needs of various size and complexity, including a recently launched solution with Bill.com called Vendor Pay. This marks the first time businesses can choose to use a card to make vendor payments within the Bill.com solution.
When our customers adopt AP automation, they're able to pay more merchants and are more willing to put spends on their card. In fact, early research demonstrates a 43% lift in spend after implementation. Let's look at how this works in practice. Again, for those of you following along via webcast, please click on the link next to the slide titled "AP Automation." Okay. Hopefully you saw from that video, AP automation can make a big difference to our SME customers.
L et's walk through how we're driving growth through our digital capabilities. Over the past few years, our digital channels have become the largest driver of new customer acquisition. We think of the digital acquisition journey as a funnel. Our above-the-line campaigns, like Don't do business without it, trigger connection rooted in business needs. We further engage prospective customers with relevant messaging and advanced targeting.
We drive them to our site, personalizing the content to improve conversion. Once acquired, we engage our customers through the web and mobile app to offer differentiated service and expand on the relationship. Finally, we connect with our customers via loyalty programs, which feed the top of the funnel for new high-quality prospects.
As our acquisition becomes increasingly digital, we aim to grow efficiently. Here are a few examples of how we're driving this change. In 2018, 53% of our U.S. accounts were acquired via digital channels, representing 18% year-on-year growth. We've seen an 83% year-on-year growth in new accounts acquired through digital referrals. Finally, customers who are engaged digitally spend 10 times more than those who do not log into their digital accounts.
Turning now to international SME, where we have the opportunity to replicate, adapt, and scale the successful foundation we've built in the U.S. As I mentioned earlier, we've generated sustained growth in the international SME segment with average FX-adjusted billings growth of over 25% in our five largest international countries. There's still significant runway to grow. We currently have relationships with less than 5% of the addressable SME customers across our top five markets.
To build on this considerable growth momentum and significant remaining runway, we're adopting the American Express country-by-country strategy Steve discussed earlier. We're globalizing the playbook upon which the success in the U.S. has been built and customizing for each priority country. As this slide sets out, we're doing this through a number of growth drivers. We're making considerable investments in the commercial distribution engine to achieve scale.
We're leveraging consumers' infrastructure to grow cost efficiently. Thanks to our integrated model, we're partnering with our merchant teams to enable our SMEs to make payments to their suppliers wherever they operate. Across all these efforts, we're maximizing the reach, expertise, and capabilities of our U.S. business. Let me give you an example. In Australia, Amex has had a co-brand relationship with Qantas in consumer for a number of years.
In 2017, we decided to relaunch our small business product. We built off consumers' infrastructure, and it worked. We saw the benefits of the refreshed product in 2018, driving nearly three times more volume than the prior year and doubling the number of accounts. However, thanks to our starting position in consumer, the incremental investment required was modest. We're also investing to capture the opportunity in cross-border supplier payments. Supply chains are increasingly global.
As I cited earlier, cross-border payments represent a $20 billion profit pool. Customers need to be able to make these payments efficiently and quickly. Our products, including FX payments, global currency, and buyer-initiated programs, can offer more efficient, transparent, and flexible global trade solutions. In this last section covering our forward plans, we're going to move on from SME to look at our strategy for global and large customers.
Let's start with our core T&E business. One of our most important advantages is our integrated model, which allows us to access issuer, merchant, and partner data at scale. When I meet our largest customers, these analytics are what excite them. They want to control their spend, and our insights, delivered in a truly global platform, enable them to do this.
For example, with one client, we were able to reduce non-compliant spend by over 40%, providing more control over what their employees were spending on. For many clients, our analysis enables them to decrease spend leakage. In this example, total employee utilization improved from 72% - 90% for a large client.
That's clearly a win-win, as it also increases spend through American Express. As set out in the profit pool data earlier, there's a meaningful opportunity to extend our leadership position in one B2B payment category, T&E, more broadly, and get more broadly into our customers' AP files. In doing so, we can focus on our customers as a platform for growth by delivering a set of products that serve these broader payment needs.
The recent launch of Early Pay in October helped our customers more efficiently manage the middle and tail end of their AP files while enabling American Express to capture B2B volume outside of our traditional T&E focus. Early Pay is an exciting, distinct, and simple new addition to our suite of solutions. For users of Early Pay, it's easy. Buyers approve invoices through their normal process and send the approved invoice information to Amex.
Amex uses this data to make early payment offers to the suppliers. Suppliers choose when they want to be paid on the platform and then receive a payment directly to their bank account. The platform generates savings for buyers and improves cash flow for suppliers. It's simple for the customer, but it would not be simple for a competitor to stitch this together.
Early Pay builds on our deep relationships with the procurement functions of the largest companies in the world and on the advantages inherent in our integrated model, an ecosystem of buyers and suppliers, the ability to apply dynamic pricing, and access to the right data. As in the SME segment, AP automation is a big trend for our global and large customers. We're innovating our product offerings in this space with automation and network partnerships such as Amazon Business, SAP Ariba, and Tradeshift.
Over $2.8 trillion of B2B payment volume are transacted on these platforms today, the majority of which today is ACH and check. We're well-positioned to capture this payment volume as 60% of our largest customers already use at least one of these platforms today. Our partnerships with these top players will cover a wide range of payments, driving more efficient working capital, security, and enhanced data.
Over the long term, we'll co-develop new capabilities for both buyers and suppliers, creating a growing network of customers. To close, the commercial business is in a strong position and has demonstrated proven performance, creating a platform for future growth. Here's what our strategy is setting out to achieve. For U.S. SME, we'll strengthen our leadership in card while deepening our relationships to serve more of our customers' B2B payments and working capital needs.
For our international SME customers, we'll achieve scale in our largest international countries by leveraging our U.S. assets and focused on our American Express winning country-by-country strategy. Finally, on global and large, we'll maintain our leadership position in T&E. We'll also deploy new capabilities and partnerships to capture more of our customers' B2B payment volume. To close, many of you will have seen our global brand platform launch last year.
American Express as a B2B brand is very much a part of this. I hope the last 30 minutes have given you an overview of our strong starting position, the large opportunity, and our plans to both defend historic areas and grow in new ones. We're confident as we execute on these plans, we'll have a growing base of customers who won't do business without us. Thank you. I now want to hand over to our Chief Strategy Officer, Mohammed Badi. Mohammed.
Thank you, Anna. Good morning, everyone. As I'm also new to American Express, I'll start with a quick personal introduction. Before joining American Express, I was a senior partner with the Boston Consulting Group, where I was the leader of the firm's payments practice. I was at BCG for 14 years. My work spanned the payments value chain, and my mandate was global.
I served companies across both developed and developing markets and was a lead partner with clients in seven countries across four continents. Yes, an excellent training ground for the global business that is American Express. Also, yes, my frequent flyer account balance has taken a significant hit since I came over to American Express. Before BCG, I was an engineer. I co-founded a Silicon Valley startup and was part of the pre-IPO team of a New York Silicon Alley company.
I also worked on the team that launched NASA's Gravity Probe B relativity mission. I'm really excited to be here at American Express and help lead the company as a Chief Strategy Officer. Digital is a topic on which I'm particularly excited to engage. Coming in, candidly, I had a number of questions about digital. I mean, after all, there's not a lot out there in the public domain on what American Express is doing digitally.
Our company is known for its high-touch model, and the level of digital disruption in the industry is really high. Over the last few months, I've had my questions answered. I'm excited to share with you today that Amex has harnessed digital to transform as a company, and I believe we are well-positioned to both succeed and shape the future of the industry. With that, today I'm going to cover three topics.
First, I'll give an overview of Amex's transformation into a digital-first company and our outstanding results. Second, I'll share how our digital approach has spanned all elements of Amex's model. Finally, I'll talk about how we're positioning for the future. We all know this. This is a really exciting time to be in payments. The landscape's evolving quickly.
Three factors are driving the change in our landscape, advancing technologies, changing customer needs, and evolving macro trends. We see a wide range of possibilities, many of them called out here on the right side of the page. We are ready to attack these opportunities, and we believe that they'll drive value for American Express. Why? Because this company has been intentionally transforming to prepare for this digital future.
If you think about it, becoming digital really has been a natural evolution for American Express, given our lack of a legacy footprint. Digital is a bit of an ambiguous term, so let me be really specific. We think about digital in four buckets, and you see them here. We've called out some of our key milestones over the last decade. In the next section, I'll walk you through our activities within each of these rows. What I want to focus on now is the results of our transformation.
T oday, American Express operates as a global digital-first company. Our customers, who we define as consumers, businesses, merchants, and partners, interact with us digitally at all stages of their life cycle. Let's start with acquisition. 70% of new customers and small and medium business accounts are acquired through digital channels. These members are highly digitally engaged.
78% actively use our app or our website, and in many cases, take advantage of the way they can seamlessly switch from one device to another. Our customers spend digitally. Four of our top five merchants are digital. I know many of you have asked the question: What will happen to our business when the card goes away? It is already happening. 60% of proprietary volume is from card-not-present transactions.
T his includes everything from online shopping to paying your utility bill to automatically re-upping your transit card. As you saw from Steve's presentation earlier, business has not been better. Servicing, this is an area where we see digital working for us every day. Over the past three years, we saw our digital servicing channels grow. Almost half our base self-serves digitally.
This enables our world-renowned customer service organization to focus on the more complex interactions, continuing to offer powerful backing to our customers. How have we benefited from this digital transformation? Well, let's start with customer engagement. Our digitally acquired consumers and small and medium businesses are 57% more likely to engage with our app. Across all of these newly acquired customers, almost 70% are digitally active within the first month.
Among corporate decision-makers, these are the program administrators who are choosing Amex as their company's payment provider and then managing the relationship. Among these folks, our net promoter score is a full 22 points higher when they use our app. Increasing customer engagement holds for our merchants as well. The total investment by merchants in Amex Offers grew 32% over the last year. Now let's talk about the financial implications.
From a top-line perspective, last year, consumer and small business members who were acquired digitally spent anywhere from 11%-36% more with us. These customers seek us out digitally, engage with us digitally, and discover the tangible value of the products and services available in our digital channels. Turning to the bottom line, digital brings efficiencies. Let's look at three examples.
First, early in our transformation, we embraced the power of digital marketing and its inherent efficiency. Our marketing efficiency, here we are talking about our acquired billings for every dollar invested, has grown over 20% per year in the last two years. Second, over the past seven years, our fraud rate has decreased from three and a half basis points to two and a half basis points. Third, OpEx. We enjoy a 92% digital bill pay rate. Among millennials, 70% have gone paperless.
Overall, we have reduced paper servicing communications by 30% over the last three years. Putting them together, our top-line digital growth with bottom-line efficiencies, you can see that our digital transformation has created and will continue to create significant value for the company. I will now walk you through the four buckets we use to define digital and share how they impact all elements of our differentiated model.
You heard Steve talk about our integrated model and its advantages. You see them in the dark blue in the middle of this page. They are the relationships we have on both sides of the transaction, the economic flexibility that comes from playing end to end, and the data we receive across the value chain. Get this is really important. In an increasingly digital world, each of these advantages become more meaningful.
Digital allows us to deepen relationships with existing customers, as well as bring on new ones, resulting in a strengthened and expanded network. Digital also fuels new product creation, our economic model allows us the flexibility to experiment. Of course, the proliferation of digital commerce means more payments, which creates more data. Let's get into the four buckets we have at the bottom of the page, digitizing our core, building new digital products and experiences, evolving our analytics stack, and creating digital partnerships.
First, digitizing our core. When we set out to digitize our core, we started with the customer and thought about the journey the customers go through with American Express. In total, we've mapped 117 customer journeys across 15 distinct customer groups. We define a journey as a set of end-to-end actions a customer takes to complete a need.
It might be something like apply for my card, pay my supplier, or update my merchant account. Focusing on journeys allows us to take a customer view rather than a product view. We systematically reimagine journeys to make sure they meet three criteria. First, personalized, relevant experiences that show our customers we know them and we can deliver the right solution at the right time.
Second, coordinated experiences across channels, backing our customers on the go, even on multiple devices. Third, seamless experiences that save our customers time and effort. As an example, to make this real for you, let's start with our digital acquisition journey for consumers, let's look at the use case of a prospect who is referred to by a current card member. Referral is vital to Amex. Steve mentioned the program we call Member Get Member, or MGM, and its associated network effect.
He also talked about our customer base as a platform for growth. MGM is a real-life manifestation of net promoter score. We don't just ask our customers, will you recommend us to a friend? We encourage them to do it. We reward them for it, we make the process seamless for them. In fact, if you came through our MGM program, you are six times more likely to refer another friend.
When our card member refers a friend, the friend receives a link with a personalized offer. We optimize both the terms and the suggested product, as well as determine the right messaging and channel. Your friend enters a mobile responsive application. We've pre-filled fields in the application wherever possible, we also allow for flexibility to save the app and finish later.
Once the application is complete, we enable instant spend by making it easy to spend online or provision the card to your friend's choice of mobile wallet. Of course, the physical card will arrive shortly afterwards. Until it does, our instant membership capabilities ensure over 70% of those eligible in the U.S. have access to their member benefit immediately. MGM is our fastest-growing digital acquisition in the U.S.
We see higher approval rates and higher spend from card members acquired through this program. The credit scores of applicants through this program in the U.S. are on average 32 points higher. We've also built a robust referral journey for small business, called Refer a Business, we've seen 50% growth in acquired small business billings from this channel already. Now let's look at a merchant journey, Amex Offers.
This is a journey where we help merchants attract business from Amex card members. Our system enables that merchant to construct an offer, choosing between different offer types and targeting methods. In the background, we personalize these offers at a level that is increasingly differentiated from our peers.
Of the hundreds of offers that might be available to a card member, we use proprietary algorithms to score all of them and then determine the most relevant. We take care of delivery for the merchant, ensuring our card members can access these offers seamlessly with a click of a button or a voice command. When the merchant makes a sale, we handle all redemption steps in the background. We provided the merchant with a platform and the analytics needed to source the new customer, and in turn, our card members enjoy benefits that merchant partners are willing to fund.
Last year, 24% more card members redeemed offers, driving incremental value to our merchant base. There's two major elements that support our digital-first end-to-end journeys. The first is automation. We've streamlined what customers experience and have freed up hundreds of thousands of hours for our teams to focus on the highest value activities. We started investing in automation well before many of our peers in financial services, and we've cracked the code on how to extract value from the large number of automation tools available.
The second element that supports our end-to-end journeys is our global integrated network. At the foundation of our integrated payments platform is the advanced technical infrastructure that enables the authorization, clearing, and settlement of our global transactions. We continue to invest in modernizing this network, moving to a more modular infrastructure that will add speed and flexibility around the world.
This modular infrastructure will enable us to build a capability once and then easily deploy it to new geographies and customers. I started with digitizing our core. Let's move on to the second area of our digital transformation. We've introduced a variety of new digital products and experiences. I'll walk you through Amex Offers.
You'll recall Pay It Plan It from Investor Day last year, which has seen great adoption from our customers. As a third example, Amex Go, where we eliminate the tiresome expense reporting process for companies through the issuing of temporary cards to employees, contractors, and recruits. In a digital-first world, we see the Amex app as a hub for many of our products, experiences, and services. We have a rich set of features in our app that vary depending on where you are in the world.
For those of you here in New York today, you can compare flights, check your FICO score, request a credit extension, find an airport lounge, and more. In the U.K., you can even book a dinner reservation, and we're rolling this functionality out to more countries soon.
This range of functionality and the ease with which we deliver it earned us the top spot in J.D. Power's ranking of U.S. credit card mobile apps for 2018. Last year, we moved the app to a single global code base. Remember how I told you we were scaling our network infrastructure? We're also scaling digital channels. With a single global code base, updates and improvements can be rolled out to the majority of our proprietary countries around the world in a fraction of time it would've taken a year ago.
Both within and outside our app, we've rolled out mobile messaging and chat functionality that embeds our world-renowned customer service into our digital channels. In our app, the number of conversations is growing rapidly. Last year, we saw a 96% increase in engagement through mobile messaging conversations. Roughly a quarter of these conversations are fully automated, and the balance of 75%, automation plays a key role, an important role in assisting our customer care professionals.
Beyond our app, we bring our service into our customers' preferred channels, such as Amazon Alexa or Facebook Messenger. For businesses, we're currently piloting a solution with Apple. The third area of our digital transformation is our analytics stack. I mentioned the data available through our end-to-end integrated model. You'd expect it comes from two sources. The first is our base of customers, diversified across consumer and commercial, with concentrated high profit segments.
Add to this data from merchant locations. We have decades of experience interpreting, actioning, and protecting this data, and investing in analytics continues to be a priority. This data feeds models that drive our business, which are at various points in their evolution. Our fraud and risk organizations use some of the most sophisticated machine learning techniques available.
I'll double click on this on the next page. Our marketing techniques are highly digitized, from targeting and channel optimization to the ways we drive organic spend with small and medium businesses. Finally, we're continuing to invest in personalization. Many successes to date and a lot of excitement for what's next. Here's two examples of the power of analytics within American Express. First, now you guys already know this, our fraud rates are significantly lower than the competition.
The point I want you to take away here, though, is that as the world becomes more digital, we have even more information from our proprietary integrated model to feed our analytics. This has driven down our fraud rate at a time when industry fraud rates have risen. We're targeting fraud in ways that others cannot, driving an increasing gap between our net fraud loss rate and the industry average. Second, we use machine learning for credit decisioning.
Today, we're at scale. For U.S. consumers, 90% of new account decisions are driven by these proprietary models. Let's move on to our fourth and final area of our digital transformation, our digital partnerships with some of the world's leading companies. We work closely with select strategic partners. These include digital giants, lifestyle players, and retail. We are co-creating the best digital customer experiences using the strengths of both parties.
We're the partner of choice, as these strategic players benefit from our seamless integration capabilities, our global footprint, and our innovative mindset. Let's dig into our recently announced partnership with PayPal. As you're all aware, PayPal and Venmo are leading peer-to-peer payments apps in the U.S., with high usage among our member base, particularly millennials and Gen Z.
With our partnership, American Express Card Members will easily be able to add their cards from our website and mobile app to their PayPal and Venmo wallets. We will bring Amex's Membership Rewards together with PayPal's merchant network. When shopping with PayPal, Amex members will be able to Pay with Points across millions of online merchants. Finally, the partnership means integrating our app with PayPal and Venmo's P2P capabilities.
As you'll see when we roll it out, we'll be going to market with some really exciting industry first use cases for P2P that streamline and simplify the process for our Card Members. Let's talk about Apple. We share a customer base around the globe, especially in the premium segment. These customers reap the rewards when Apple and Amex work together to provide a best-in-class digital experience.
We regularly market with Apple, whether that's through Amex Offers or engaging our Card Members directly for Apple Pay. As Steve mentioned, we're present with Apple Pay in more countries than any other issuer in the world. We also have a close relationship with iTunes. We noticed that when customers shopped on iTunes, they had an unusual number of disputes.
On their statements, they'd see a charge next to iTunes that they didn't recognize, forgetting it might be made up of multiple transactions, a movie, a game, and hopefully for my kids, an education app or two. Is that too much to ask? To address this, we partnered with Apple to enable the direct link to detailed iTunes receipt information that we now display on the Amex app and on our website.
This drove a significant reduction in disputes, minimizing friction for our Card Members and for our partner. That's an overview of where we are today. Let's talk about how we're thinking about the future. When we approach the opportunities of the future, we do so from a running start. We set ourselves up to innovate with speed. Our enterprise-wide digital product and tech organizations ensure coordination and prioritization.
They encompass over 4,000 engineers, many of whom are tied into a network of state-of-the-art digital peers through industry and affinity groups. Separately, Amex Digital Labs is our standalone innovation hub through which we experiment with and integrate new capabilities. We believe an innovative mindset is a prerequisite to remain competitive.
Across our company, we're adopting the Scaled Agile Framework with over 600 teams around the world sharing a common sprint calendar. These teams share centralized tech resources and benefit from an always-on test and learn environment that allows us to continuously optimize.
Finally, we keep an ear to the ground to maintain an external perspective. Through Amex Ventures, we have over 40 investments that help us identify the next waves of technology, from consumer commerce to B2B services. We explore partnership opportunities with our portfolio companies, and in some cases, a partnership leads to an acquisition.
For example, last year we acquired Mezi, a smart mobile concierge, which has been piloted with Card Members and integrated into our app. What's next? We will continue to make our customers the North Star and use digital to create experiences that make us essential to them. These will further embed us with merchants, businesses, and consumers, and they will range from the payments and financial services for which we're known to new commercial capabilities and lifestyle tools.
Merchants will see us expand and enhance the Amex Offers program, bringing in new offers from digital partners and applying some of the digital tools we've built in-house. For instance, we've just started a pilot Amex Offers that combine a deal funded by a merchant with the digital lending capabilities that we built through Pay It Plan It.
On the commercial side, you heard Anna speak about our innovations in AP automation, this is just one of the new types of digital services we will bring to businesses. We are using digital to simplify and personalize supplier payments. Anna told you about our tool, Early Pay, which allows buyers to optimize cash flow while also allowing suppliers to choose when they get paid.
This is fully digital, from the connection of the two parties to the scheduling of payment. For consumers, we will continue to build on our 360 degree view of financial and lifestyle needs. This means bringing together our global travel, dining, and entertainment platforms with mobile as a hub.
We want to personally and seamlessly connect Card Members to the experiences that mean the most to them, making Amex an indispensable part of how they live, work, and see the world. Every one of these efforts rests on our integrated model, this model places us at the center of digital partnerships and collaboration. In a digital world, partnering with a financial services player is complex. We make it easier. We enjoy the advantages of being a one-stop shop: issuer, network, and acquirer. Partners can do more with us, more simply, our strategy is to selectively open our APIs to those who will bring value to our customers.
The combination of digital capabilities with our underlying model accelerates the relationships we can build, the products and experiences we launch, the data we gather and bring into play. So in closing, we're proud of how far we've come and excited by what lies ahead. To tie back to my comments in the beginning, I'm really excited to be part of the team. American Express operates as a digital company. Our results have proven we can capitalize on the enormous digital shift in our landscape.
Our results are powered by our integrated model. Technology enhances this model, building on the data, economic flexibility, and relationships that make it so valuable. Remember, in an increasingly digital world, each of these advantages become more meaningful. We've transformed this company. We have maintained our longstanding practice of keeping the customer at the center as we've digitized our core.
We've created innovative digital products and enabled them with our powerful analytics stack. Our digital partnerships create relevant, differentiated value. Looking to the future, we're ready to innovate with speed and scale. Our focus on being essential to our customers, as well as our integration across the payments value chain, will help drive continued success. With that, we'll take a quick break and return in 20 minutes. Thank you.
Ladies and gentlemen, we will now take a short break. Please return to the auditorium in 20 minutes.
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Ladies and gentlemen, our program is about to resume. Please return to the auditorium, and as you find your way to your seats, please take a moment to silence your electronic devices. We will begin again in just a few minutes. Thank you. Ladies and gentlemen, as you find your way to your seats, please take a moment to silence your electronic devices. Please welcome American Express Chief Financial Officer, Jeff Campbell.
Well, good morning, everyone. Good to be here. Welcome back from the break. Steve, you started by reminding people that last year there was a blizzard for this performance. For those of you listening on the webcast who aren't in New York, we're looking out at a beautiful sunny day, and I hope that's an omen for the global economy for the rest of the year. Okay?
My role, as it is every year, is to try to put the things that you've heard so far today into a financial context and then get on to the thing that I suspect most of you really want us to get onto, and that's the Q&A, where we will talk about whatever you would like to talk about.
Certainly, at this point, you should have a good sense of the momentum we have, a better sense of the B2B opportunities and how far we've come digitally. Hopefully, after the next 30 minutes or so, you'll have an even better understanding of how all that comes together financially. Steve showed you this slide, and this statement is really at the heart of our financial model and philosophy.
We are focused on sustaining high levels of revenue growth that deliver steady and consistent double-digit EPS growth. This model really starts with the belief Steve expressed earlier, that having an investment strategy focused on growing our share, scale, and relevance creates the best foundation for long-term value creation for our shareholders. In today's economic regulatory competitive environment, the model should lead to double-digit EPS growth.
In any kind of environment, it should lead to revenue growth levels in the top tier of the industry. We provide annual EPS guidance each year so that you understand clearly our EPS growth expectations given the environment at any point in time. It starts with share, scale, and relevance. We feel pretty good if you look at our 2018 progress on how we're doing on all three fronts.
We have grown both billings and lending share in most of the major countries in which we do business. We had significant double-digit expansions in the number of card members and our merchant network. I certainly hope after Mohammed's presentation, you have a good sense of how much progress we're making on engagement with all of our partners, but particularly the progress we're making on digital engagements and relevance.
It's that focus on share, scale, and relevance that we believe, combined with all the changes we've made in the company over the past few years, that is what has led to six straight quarters of having revenue growth on an FX-adjusted basis of at least 8%. It's that focus on share, scale, and relevance. That led to the results in 2018, very consistent with the model. 10% revenue growth.
When you take out the impact of the Tax Act and some other very positive tax discrete items we had, 13% EPS growth. When you look at our 2019 guidance, if you were to take, say, the midpoint of the EPS guidance range, you're at 8%-10% revenue growth and 11% EPS growth. That is the same foundation that we see we're following into the future.
Let's unpack a little bit the financial model and talk about revenue, talk about the investments driving that revenue, operating expense leverage, and then our disciplined approach to both risk management and capital deployment. The first point that gives us confidence in the sustainability of our revenue growth is the breadth of the sources of that growth.
When you look at 2018, we had really good growth in all of our discount revenue lines, our net card fees line, and our net interest income line. Now, as Anna showed you on an earlier slide, in the context of the commercial side of the house, when you look at the company overall, we remain heavily spend and fee centric, 81% of our revenues coming from spend fees. I also know that I talk to many of you in this room who say, "Yeah, I hear that, Jeff.
Boy, when I think about the growth we're getting in lending, what does that mean for the future?" Well, let me just remind you of the basic math, given the very small portion of our revenues that net interest income is today. If you go back more than a decade, in 2006, net interest income was 19% of our revenues, about where it is today, 12 years later.
Because we're getting great growth across all three of our revenue lines, if you think about the next decade and project out a decade, and let's assume for a second that net interest income as well as card fees grow at about 150% of discount revenue, it actually makes very little difference. Our model remains very spend and fee centric. The starting point, of course, of the discount revenue growth we've seen is billings growth.
The second thing that gives us great confidence in the sustainability of our revenue growth is not just the breadth across income lines, but the breadth that you see across geographies of the growth and the breadth that you see across our customer segments. You put all that together, and we've had five consecutive quarters of having FX-adjusted discount revenue growth above 6%.
On the bottom of this slide, you see our average effective discount rate, which actually has been pretty stable over the course of 2018. I'd make two points here. First, it was stable as you went through 2018 because we are getting further from some of the impacts that we've talked about for a number of years now.
The impact of regulation in Europe and Australia, the impact of the rollout of the OptBlue program in the U.S., the impact of a couple of strategic partnerships we struck. The second point I would make here is that you've now heard over the past year, both Steve and I steadily de-emphasize our focus on the average effective discount rate.
That's because we have made very clear that our focus is on driving the top half of this slide. Our focus is on driving discount revenue, not necessarily maximizing the average effective discount rate. In fact, as Anna talked about in her presentation on our B2B business, we see the pricing flexibility that our integrated model gives us as a tremendous asset as we seek to sustain our real goal, which is steady discount revenue growth. The next part of our revenue is card fees.
Here we were really pleased because when you look at 2018, you actually see a steady acceleration in our card fee growth. As I look forward, I would expect card fee growth to continue to be above the average revenue growth for the entire company. Why do we have that confidence? It's because of the breadth of the sources of that growth.
We have a long history of running a playbook all over the globe. Of every few years, refreshing our products, adding more value for our card members, then having the courage to price for that value. A long-established road, we think there's a long runway to continue to do that.
I also want to make sure everyone noticed one number that was also in Steve's deck, because this number, 64% of our new card members acquired last year being on fee-based products, we see as another tremendous strength of our franchise right now and another example of what gives us confidence in the sustainability of the great growth we've seen in card fees. That brings us to net interest income.
Once again, our confidence is bolstered by the breadth of the sources of loan growth with good growth across all of U.S. consumer, international consumer, and our commercial business. As we've talked about for many years now, this is so important, we see our above-industry growth on loans driven by the fact that we have a unique opportunity that nobody else has because of our historical under-penetration of our own customers' card-based borrowing behaviors.
If you look at 2018, 59% of our growth came from just getting better at capturing our existing customers' borrowing behaviors. Interestingly, if you were to just take out of our growth rates the portion coming from getting better at capturing our own customers' behaviors, you'd actually then see us growing at about the industry rates.
As we grow our lending balances as we grow the balance sheet, we have also become more focused in the last year or so on evolving our funding mix. If you look at 2018, we significantly grew as a portion of our funding stack, our online personal savings program. I would expect that to continue to be the fastest-growing part of our funding stack.
As you all know, in a rising rate environment, that does help to mitigate the impact of rising rates on our very charge card and spend-centric business. When you put all the economics together of our lending, I would suggest we've achieved something over the last four or five years that is really quite a feat, and I would suggest fairly unique.
That is we have been growing above the industry while actually increasing our net interest yield and net credit margin, and while retaining best in class, lowest in the industry loss rates. I think that's a tremendous testament to a couple of things, the unique nature of the opportunity we have, the power of the integrated network, as well as the strong management teams we have, and the premium nature of our customer base.
You put all of those things together, and we feel really good about the revenue guidance we've provided for 2019. Let's talk about what's driving that revenue growth. Of course, it starts with the choices we have made over the last few years around investments. The first point I would make is there's lots and lots of things we do to drive revenue growth.
One of the things we spend the most time on as a management team is thinking about getting the mix right between those things that are going to drive shorter-term benefits to make sure we meet our shorter-term commitments to shareholders. Have to balance those with the things that are very important to long-term sustainability. Of course, we have to balance the fact that different things we do to drive growth hit different lines of the P&L.
As we do all of that, we see as a tremendous strength of our business that we always have a long list of excellent growth initiatives that we actually can't quite fully fund, given the balance we need to strike between short-term commitments to shareholders and the long term.
That's why we have a long history as a company and as a management team of when we see a little bit of upside, perhaps that we didn't initially expect, we tend to put a little bit of it in our shareholders' pocket, and we tend to put a little bit of it to work driving or accelerating initiatives that would otherwise not have gotten funded until later in time. We'll accelerate those initiatives to drive further growth.
The largest dollar component of what we spend on in terms of investments is what we, a couple years ago, began to lump together in a category we called customer engagement. These costs have been growing faster than revenues. I expect they will continue to grow faster than revenues, and they are a source of some margin compression.
There's three parts to this, Cardmember Services, Rewards, and Marketing and Business Development, and I'm going to stop on each one of the three and talk a little bit about them. Let's start with Cardmember Services. This is the smallest dollar component of customer engagement costs, but it has been, and I expect it will continue to be, the fastest-growing part of our customer engagement costs. Why?
Because we have become much more focused over the last few years on making sure we are doing things with our value propositions that emphasize the parts of our network, of our business model that can create value for our Card Members, but are more difficult for others to replicate.
These are things like the Global Centurion Lounge Collection, like some of the digital efforts that Mohammed Badi talked about, the Mezi acquisition, many of the experiential things that we offer to our Card Members. Second category of customer engagement costs are rewards. If you look at recent history, these have been growing roughly in line with our proprietary billings.
That does create a little bit of margin compression because our proprietary billings tend to grow a little bit faster than our revenues. C ertainly for planning purposes, we charge ourselves with making sure we can create the financial returns our shareholders expect while still seeing that same pattern continue into the future. The third category in customer engagement is marketing and business development. The business development half of that consists of three things, right?
It's payments to our corporate clients, payments to our GNS issuing partners, and it's payment to our co-brand partners. Certainly the fastest-growing of those three in recent years has been the payments we make to co-brand partners. It is really important to make the point that because of the range of unique assets we can bring to our co-brand partners, Steve, in particular, talked about these earlier using Delta as an example.
We are able to add tremendous value to our co-brand partners while still getting very attractive returns for our shareholders as well. When you look at our co-brand partners, certainly Delta is the most significant, 8% of our billings, 21% of our lending. There's really three others who are individually significant, Marriott, Hilton, and British Airways.
Then we see as a real strength that there are over 50 other co-brands around the globe that make up the other category here. You put all that together, and we feel very encouraged by the steady progress over the last few years on bringing more Card Members into the franchise every year.
I do want to call your attention to the bottom of this slide because another question that I often get from many of you in this room is, "Boy, are you doing something to lessen your credit standards to help drive all the growth you're getting?" If you look at the average FICO of our new Card Members in 2018, it was actually up from 2017, which I think is a real testament to the model and the team.
Our last category of customer engagement costs is traditional marketing costs. Here you see us getting efficiencies that are actually helping to mitigate some of the margin compression we see in the other lines of customer engagement. One of the biggest sources of that efficiency is what Mohammed Badi already talked about, that is the incredible progress we have made in recent years on getting ever more efficient at making digital our main acquisition channel.
Just like I called attention to Steve Squeri's number of 64% of new card members being on fee-paying products, I really do want to emphasize a number that both Mohammed Badi and I have in our charts, that is that we have grown our marketing efficiencies. How many new dollars of billings do we bring in for every dollar we spend on marketing by an annual rate of 21% the last few years? Yet, we see a long runway to continue to get efficiencies here. Overall, customer engagement costs have been undergoing some margin compression.
We mitigate some of that compression with the marketing efficiencies I just talked about. We mitigate much of the other margin compression through our longstanding history of getting operating expense leverage. I hope I can be brief on this because I think our track record is clear over many, many years. If you look at the last eight years, our company has grown its volumes by 66%, while only growing the operating expense base of the company by 6%. 6% is not a CAGR.
I mean, we've grown 6% in total in eight years, so in other words, it's a growth rate of less than 1% a year. Of course, that's driven by the nature of our integrated model, our ability to leverage technology, our global scale, centers of excellence.
We see a long runway to continue to do this given the nature of our model, the growing power of technology, and the desire of our card members and merchants to interact with us ever more digitally. I would even suggest that our track record is a little better than what that chart shows because there are areas of operating expense where we have made choices to spend more money.
We have been growing sales forces. We have been, and Steve really focused on this, doing things to drive faster growth in our merchant coverage. We have been focused on our digital capabilities. We have to find even more efficiencies elsewhere in the company to fund the investments we're making in that area.
Let me preface this next section by saying, as we look across our global company today, we do not see any broad signs of a significant economic slowdown anywhere in our business. Despite that, I would say in every discussion I have with anyone in this room, the question of, "Gee, what's going to happen if and when the economy slows down? How are you guys thinking about it?"
That is one of the top questions I get. Let's talk a little bit about how we approach risk management. I would start by reminding you of just some of the inherent strengths of the integrated model we've been talking about all morning. One of the things we look at from what I might call a margin of safety perspective, is how much net revenue we get from our customers as a multiple of the current write-off.
When you look at where we are on that metric, we are at multiples of where the rest of the industry is in terms of the margin of safety we have. That is on a more macro basis reflected when you look at the Fed CCAR results, where every year we tend to be the institution with the highest margin of any, and one of the few institutions that continues to make money right through an economic cycle more severe than the last financial crisis. We feel good about the nature of our model in the face of any potential future downturn. We're not oblivious to the many conflicting signals in the external environment.
We have, over the course of the past year, been evolving a number of the things we're doing on the risk management side to make sure that we're doing things today that will position us well for any potential downturn at some point. I would point out, we've done all these things while still retaining above-industry growth rates, while still driving net interest yield up, and of course, while still retaining best-in-class credit metrics.
That's what you see when you look at a long history of our write-off rates. They remain best in the industry and low by our own historical standards. Another thing we constantly do when we think about the company is we constantly are thinking about have we institutionalized and learned all the lessons from the last downturn.
Part of that is thinking about capabilities, part of that is thinking about processes, part of that is thinking about resources, and part of it is thinking about the portfolio. Well, we are constantly looking to make sure our portfolio today looks very different than it did in 2007. You put all that together, for 2019, we have provided guidance around our provision growth that it should be less than 30%.
I would suggest that is consistent with the levels of loan growth we've shown for years. It's consistent with the expected seasoning we've been talking to you about for years, and it's consistent with producing really good overall economics for our shareholders. Let's touch on the last aspect of our financial model, and that's our disciplined approach to capital deployment. Of course, we start with a tremendous advantage, right?
We generate capital at a rate nobody else in the industry does. With ROEs that for as far back as you might want to look have always been at the top of the industry. What do we do with that capital? Well, we pay a dividend that we have been steadily moving up as the company's earnings move up. You should expect going forward that the dividend will grow roughly in line with the way our earnings grow.
Beyond that, we use our capital, need a little bit to support organic growth every year. Need a little bit to support the occasional M&A that you've heard us talk about a little bit here, although that's mostly capability-oriented, smaller transactions.
We use the rest really to return to our shareholders consistent with our view that we do need to keep our common equity Tier 1 capital ratio, which for us is the most critical one in the 10%-11% range. We draw particular comfort from the fact that if you look at 2018, where we started the year below our target capital range because of the impact of the Tax Act charge we took in Q4 of 2017.
In one year, we added 200 basis points to our capital ratio while still returning $2.9 billion to our shareholders. We see that as a tremendous testament to the strength of our capital model. That's the financial model. Hopefully, it gives you a little bit more insight. Let's talk for a minute about how it's faring in 2019. It's March 13th.
We are in the process of closing the books on the second month of the year. If you think about billings and loans growth, you will recall that back on the January earnings call, I talked about the fact that late in Q4, we began to see evidence of a lapping of a surge in organic growth that we first saw late in Q4 of 2017, sort of broadly across all aspects of our business.
That drop in organic growth became a little bit more evident, as you recall, in Q1 of 2018. Standing here today, it is clear to us now that that lapping is something that will be with us for all of 2019. Second point I'd make is just a reminder that we did acquire the Hilton portfolio early in Q1 of 2018, so we will be lapping that.
That said, we are right on track with our guidance to have FX-adjusted revenues in the 8%-10% range, with particularly strong contributions from card fee growth, from net interest income growth and stability in the discount rate. I would point out, if you look at our Q4 results, we had about a 200-basis point difference between our reported revenue growth and our FX-adjusted revenue growth due to the strengthening of the dollar year-over-year.
The dollar remains at about that stronger level if you do year-over-year comparison. In Q1, I would expect that to again be a more modest headwind for us. As you go through the rest of 2019, assuming the dollar stays roughly where it is, that effect will lessen as we go through 2019. Provision. It's really tracking as we've long said it would. Probably nothing to add there.
In customer engagement costs, I'd just make one point, that is if you look at our 2018 results by quarter, you would see a little bit of back-end loading in 2018 of the spending we did around customer engagement. Our goal in 2019 is actually to spread that spending more evenly because we think it's a better way, more efficient way to run the business. That does mean that you will see a little higher year-over-year growth rate in these costs in Q1 than I would expect to see later in the year.
Q1 then leads to the full year, as is hopefully obvious to you already, we are affirming again our guidance for the year of having FX-adjusted revenue growth in the 8%-10% range, having our earnings per share be between $7.85 and $8.35, subject, of course, to any contingencies or legal settlements.
I said back on the earnings call in January that the lower end of this range is there because, while as I said earlier, I'll repeat it because it's important, we do not see any broad signals of a significant economic slowdown in our business. We read the same headlines you do. Who knows what's going on in the U.K. today. The lower end of the range is there if there is some more significant economic slowdown relative to 2018.
Should the economic environment in 2019 look more similar to 2018, I'd expect to be in the middle to upper part of this range. I'm going to end where Steve started. I hope by now you have a keener understanding of the many growth opportunities we have across our global company. In particular, you should have a little better understanding of our commercial opportunities, a little better understanding of just how far we have come digitally, but also how much runway there is to go further.
You should have a better understanding of how we are evolving our international and partnership and customer as a platform for growth strategies. I've now been here for six years of investor days, since I joined the company in 2013.
When I look at the repositioning we have gone through over the past several years, I would tell you we have more growth momentum and better growth opportunities today than we have had any time in my tenure, and I would suggest better than the company has had any time since before the last financial crisis. We are focused on seizing those growth opportunities. It starts with our view that focusing on growing our share, scale, and relevance provides the best foundation for long-term value creation for our shareholders.
Today, our financial growth algorithm captures the essence of that philosophy in today's environment. We are pleased with our performance. We do appreciate the confidence that our shareholders place in us, and we will now get on to what I suspect is the part of the day you're most interested in, the Q&A. I'll invite Doug, Anna, Henri, and Steve to join me on stage for a Q&A session as we bring some chairs out, hopefully, to sit in. Thank you. Are you going to have a seat? You'll-
Yeah.
All right. I'll sit here.
Up.
Just making sure we had one more chair unless maybe there was a message Steve was trying to send to us.
There was.
I don't know. Even though Henri and Doug did not get an opportunity to present, we thought you'd probably like to ask them some questions. They begged to present. It's true. The crying was unbelievable. We'll save them for a later date. Anyway, we're here, and we're happy to take whatever questions you have. We will go right over here. Who has the microphone?
Yeah. Thanks, Steve, and thanks for doing this. Yeah, it's Jamie at Susquehanna. Anna, I wanted to follow up on the B2B presentation, which was really interesting incremental. I was wondering if you could characterize what portion of the B2B opportunity you describe as secular versus structural, like that video you showed of moving from paper to online versus cyclical, if you could decompose that. I just want to do one more.
I'll just get them in now. Not B2B, but with the disclosure that fraud rates are lower in card-not-present, does that argue for a lower merchant discount rate? It's a big debate out there. Those are my two, B2B and then CNP. Thanks.
Okay. I'll kick these over. They can add a little bit more color. Let me first talk about B2B. I think from a B2B perspective, the one thing that we've seen is you have seen an uptick in some of the global and large accounts, which is really not something that we have seen in recent history. I think that has to do with the economy.
I think the big opportunity within B2B, and it's on a slide with this 2% penetration as it relates to the AP files, is a huge opportunity for us as there are structural changes within the industry. I think that's where there's a huge opportunity for us to continue to capture spending.
When you think about sort of the small business piece of it really is expanding our organic core, and it's the whole concept of the customer as a platform. Let me stop there and ask Anna if she has any color to add to that, and then we'll get to your second question.
As we think about the opportunity, we don't use the trillions of volume. We come back to these billions of profit, I think that's an important lens to put on the opportunity. $90 billion of profit in B2B payments and short-term working capital. Within that, as you kind of look back on that slide, there are aspects of that that have these enormous structural trends flowing through them.
The digitization of payments arguably being the largest on that $61 billion of payment profit. That is simply structural and is, I believe, inevitably moving towards electronification. There are aspects of that profit pool that obviously go up and down a bit depending on economic cycles and corporate spend.
When you think about it, companies paying their suppliers, bar major economic cataclysm, it will happen, right? These companies need to buy what they need to grow their businesses across large and global or SME.
As far as discount rate, the second question, we've done better than the competition across whether it's card present, card not present, or digital for as long as I've been here, which has been forever. We're doing better from a digital perspective now because you have more robust information, and you're talking about a couple of basis points.
I think will that lead to a redo in merchant discount rates? I don't believe it will. We look at industries, as I've said, we look at geographies when we think about this. That is an advantage that we have and one that really just increases our overall margin. I don't see that impacting the discount rates. Henri.
The thing I would remind you that American Express prices merchants differently than the other networks. In most cases, we price more of the larger merchants that you might be referring to individually, as opposed to with standard industry tables and fees in the way the other networks do.
We take into account the value that we provide to the merchant in whatever industry or geography that we're in, along with the rate that we charge, and we always try to make sure it's competitive and fair, and it makes economic sense for them to continue warmly welcoming American Express cards.
Good morning. Bill Carcache with Nomura. The networks have talked about how they're partnering with third parties to expand B2B acceptance somewhat analogous to what's been done in the consumer space with acquirers historically. Can you talk about the extent to which you guys are partnering with third parties, or is the merchant acquiring capability something that you're leaning into more heavily? Separately, Anna and Henri, what can you or are you doing to kind of expand B2B acceptance within your teams?
Let me just start it off, then I'll kick it over to Anna and to Henri. I think one of the big advantages we have in sort of the B2B space is the economic model that we have, as well as the relationships that we have. It's that entire integrated payments platform where we have relationships with the suppliers and so forth. We have the ability, Anna talked about Early Pay.
We have the ability to price those B2B transactions in the appropriate way that there's value created on both sides. We have the data. I think the other thing that we talked about, that was in my presentation, Anna talked about it not only from the SME perspective but also from the global and large perspective, is I think the big partnerships here is the automation of the process flow.
When you think about people like MineralTree, Tradeshift, Bill.com, so forth and so on, I think those are the big partnerships. The other stuff that you talked about in terms of from a merchant acquiring perspective, I think we get that for free in our model.
Yeah. We think a lot about the various ways the various participants are trying to attack this $90 billion B2B profit pool. Everyone comes at it from their position of where they believe they have a competitive edge. The slide I put up about our platform where we have the integrated model at the core is very much how we see it. The ability to both hook up buyers and suppliers and know what's happening in between them is a competitive edge.
The other thing that, of course, we have to lead from as we build out on B2B is the customer base we have today. Such a significant share of U.S. SMEs who are our customers in one product, but most of them only have one product. The fact that T&E, this really strong solution only taps into 2% of large customers' AP files.
That is truly the platform for growth. With those customers and working with that closed integrated model, that's where we're focused. Henri has been a key partner to this business both before and since I've joined, and would love to have him talk a little bit about some of the things that he's most excited about as merchant partners with commercial.
Well, the thing I would remind you about that's different about our models, we leverage the same acquire that the other networks do around the world. Whether we're working with First Data or Worldpay or working with Adyen or Stripe or Square. All the networks generally acquire a bulk of the merchants the same. The differentiator for us is that we have a large proprietary team of people in many countries around the world that work directly with merchants, and we have a large small business and commercial base around the world.
It's the connection between the commercial issuing side and the proprietary team members that we have in many countries around the world that can take the leads, the AP files from the customers and go one-to-one and build the relationships where necessary is what we think is differentiating for us that we can enable the right type of spend.
Along with the partnerships that Anna and team have created with the AP automation, the Bill.com, the Tradeshift, those things just gives us a great solution to be able to go to commercial mid-size companies to say, "We can help you figure out how you electronify your AP spend.
Let me just add one other thing. It'll probably come up at some point, but when you think about unlocking this B2B and there's been acquisitions that have been made by our competitors, whether it be VocaLink or whether it be Earthport or something like that. Our belief is the significant opportunity is really the process automation piece of this.
That's where we believe the importance from a partnership perspective is because when you talk to customers, integrating the payments piece with the process piece is the most important thing. You cannot have the payments piece right above it. It needs to be integrated within, and I think that's the big opportunity. That's why the partnerships that we put up are so important. Let's go on this side, Craig. Maybe not. Maybe Donat.
I guess on international, you sort of focused on that, and I just wanted to clarify, are you pushing acceptance harder international like today versus a year ago? I feel like the 20% number I've heard before. If you could just talk a little bit about how you decide to push acceptance internationally and balance that, because my sense is that the returns internationally are a little bit better because you've got some inefficiencies. If you throw in the sort of growing the acceptance, how does that impact profitability?
When you think about, we've thrown out LIF numbers from a 20% perspective probably in years past. We're talking about coverage, and let me just talk about the differences between LIF and coverage because we signed 1.6 million merchants in the U.S. last year to inch our way even closer to parity with Visa, Mastercard.
You have so many merchants that go out of business, and you have so many merchants that come in business. It's a moving feast. What I'm talking about is 20% coverage improvement, not necessarily LIF improvement. I think the LIF actually will be much higher than that. When you think about where you go, the world's a big place, right?
What we had to do was to look at it from where we had inbound card members coming to, both from a small business perspective, corporate perspective, our premium consumer travelers, as well as the existing base we had. We looked at what we called our top-tier countries from a coverage perspective. We looked at the top cities across the world and prioritized those.
We looked at the top verticals. When you think about verticals, think about restaurants, hotels, airline, car rental. We have really good coverage, but you could still improve that as well. As you think about sort of getting the best return for your investment because I just can't put thousands and thousands of people across the globe. What you wanted to do was where card members are going to be.
We believe the way that we've structured it will be the best return for us. Now, having said that, look at the growth that we've had internationally. We've got 17% consumer growth, and we had 23% SME growth. Let's be honest, our coverage is nowhere near as good as it is in the U.S. We're having that growth, and we still have opportunities to improve coverage.
We have opportunities, I believe, to even get more share of wallet. The reason we focused it on those countries, and we talked about tier 1, tier 2, and tier 3, is we also believe that not only is that the biggest share of the spending that we have today, but also the biggest share of the profit pools going forward. Craig, we'll go to Sanjay.
Thanks. Craig Maurer with Autonomous Research. Couple questions. First, I wanted to get your big picture view on the fight that Visa's having with Kroger right now and what that means for the industry. Second, in B2B, you're inevitably going to have to ride the faster payment rails. How do you intend to access that capability? Just last, the relationship with PayPal and P2P. Traditionally, that's a zero revenue business for those that are in it. Is there a financial relationship that's involved in that integration? Thanks.
All right. Let me start at the back and work my way forward, and I'll ask Doug to comment. As we think about sort of the PayPal and P2P, think about sort of this application, because this is the application that my daughter talks about all the time. She'll go out with her friends, put down her American Express card because that's the only card that she has. One under my account, one under her own account. She'll go out with her friends, and she wants to get her points and so forth, and they'll Venmo her the money.
It'll be outside the system. Think about the application where now they can Venmo her the money to the American Express account, so we keep that money within the system. Is there a financial arrangement? Keeping that money in the system and having that re-spent is a big deal. Let me ask Doug to sort of comment a little bit more on that, but that's the high level.
Steve just gave you a little sneak peek of one of the use cases, but I would look at it three ways, Craig. First of all, it's a build on our commitment to expanding our network in the U.S. and outside the U.S., right? It's lighting up tens of millions of additional endpoints for our payment network through the P2P connections. Second piece I would say is it should drive preference for our payment products, especially in these social purchase scenes like Steve described.
The third place I think we'll find some revenue is providing financing capabilities to large ticket P2P transactions. Think like vacation rental shares and things of that nature where we would provide cost-effective financing for some large ticket P2P. I think, at one level, it's a utility and network reach kind of game, but I think that there are some revenues that pop off it as well.
Yeah, I may have given you a sneak peek, but otherwise the answer would've been no comment. Which you probably wouldn't have been happy with. Let's talk a little bit about your second question, which was you think about fast payments, fast ACH. I think that's a capability that we'll need to have at some point. Let's think about sort of the problem we're trying to solve with this right now.
The biggest problem we're trying to solve is you're trying to automate the payment and the process. That's number one. Number two, most of these merchants or suppliers are getting paid anywhere for 60-90 days. The fact that they could get paid in five minutes is not really their big concern right now. Their big concern right now is getting paid in less than 10 days.
If we can improve this process, and this is where Early Pay is a good product for us. If you can improve this process so that you can get this from a cash flow perspective, that a small supplier is not waiting 90 or 60 days and having run the procurement organization, I know that's what they wait. That's a big deal. I think over time, yes, that's going to be a really important capability, but I think you have to run before you walk. That would be my perspective. Anna?
I agree with that, and this is another example of the strength of the integrated model because as an issuer, we can provide that short-term financing. We're playing not in the three-day to same-day, but in the 90-day to 10-day part of the opportunity.
In addition to having this merchant capability and this partnership that we have inside the company, controlling the destiny of the network in terms of how we build out B2B capabilities as needed to compete is another advantage. I pass it back to Henri. He might want to do that Kroger question too.
Sure.
Talk both about the network and.
Let me.
I have a view on that one.
He's got a point of view.
Yeah.
Let me give you a perspective. Look, we think from a payments industry perspective, we provide value to the merchants that accept our payments. I think what's really important, though, is that you have to demonstrate a price value that you're delivering on a merchant by merchant basis, on a transaction by transaction basis. We strive to do that every single day. As Henri said, that's one of the reasons why our model is a little bit different. We do some merchant by merchant deals, but the most important thing for us is to ensure that we're providing value to the merchants and that they're seeing that value.
Yep. Kroger is one of the larger retailers in the United States, largest supermarket chains and retailers period in the United States. They are frustrated, obviously, with their relationship with one of the networks that you talked about, and unfortunately, haven't come to terms that have been satisfactory to them, and they felt the only recourse they have is to take it public and say they will not accept. I think what it does is it reinforces to many people in the marketplace that American Express is not either more expensive all the time or doesn't provide more value, and I think this is a large retailer which is saying that.
It's unfortunate to see them in this situation, but it does go back to what Steve talked about, which is we work with every merchant individually to try to make sure we're providing value to them so they think it's a great business decision to accept American Express and warmly welcome. The thing that is unique about this is that they're differentiating between credit transactions and debit transactions.
They're still accepting debit transactions. They're only barring Visa credit transactions in a subset of Kroger locations, and that's something that we've never really seen at any scale in the United States, and I think we're watching it closely to see what happens over time.
It's not an issue for us right now because we don't have debit capabilities, and we don't have debit products in the marketplace, but just seeing what merchants do in terms of differentiating between credit and debit transactions and how this plays out, I think will be interesting and informative.
Sanjay?
Thank you. Sanjay Sakhrani from KBW. I just have a question on the financial targets, or I guess the quote. Is 2019 sort of synonymous with the trend that you're looking at over the intermediate or long term, or are you above and below or below the average trend?
Secondly, can you unpack how you intend to get to the revenue growth, like the networks give us some kind of multiplier effect on GDP growth for discount revenue, and then interest income growth? Could you just unpack revenue growth and your expectations there? I have a follow-up for Anna.
You want to answer the first one?
The point we're making on the financial growth algorithm is that we start with share scale and relevance. In today's environment, that leads you to double-digit EPS growth in 2018, double-digit EPS growth in 2019. In different kinds of environment, what that focus on share scale and relevance means is that you should expect us to always seek to be in the top tier of industry revenue growth levels because it's all about driving share scale and relevance in the long term. It does not mean you will be at double-digit EPS growth in every environment, that's why we give you our annual EPS guidance to try to help you understand our perspective on the environment at the time.
Let me just comment on that and a little bit of the why, and why scale is so important and why you need to make investments through cycles or tougher times. Let's talk about coverage. We just talked about coverage a second ago. We'll invest money to get that coverage. It makes no sense to stop getting scale from a coverage perspective.
We're always going to need that coverage. It makes no sense to stop building capabilities that we're going to need, either from a digital perspective or a B2B perspective. A lot of times your go-to move is to stop those things that you would determine to be as discretionary. They're really not discretionary unless you view your business as I'm only running my business for this year.
If you're really thinking about it, those are investments that you really need to make from the medium into the long term. While it may not be popular, we believe it is critically important for the overall future success of this company to make sure that we are investing in those things that will drive our future performance.
We believe that is our merchant coverage, our investment in our network, and our investment in our capabilities to access those opportunities for growth moving forward. That's why we say, we can't always guarantee it'll be double-digit because I'm not going to make the decision to pull away from some of those investments to hit an EPS number. We're going to be pretty clear on what we're doing, and we'll be as transparent as we can.
If you just think about the financial crisis we went through 10 years ago, boy, what if we continued all our coverage through that time? What if we continued to build all those capabilities? How you then come out of that, you come out of that like a lion as opposed to coming out of that like a little bit of a lamb. That's the belief that we have as a management team, and that's the belief that we will attempt to continue to communicate to all of our shareholders, and especially those that hold this stock for the long term because that's how you want us to invest.
Let's talk about your revenue growth. The reality is because of the nature, Sanjay, of our premium consumer base, the parts of B2B that Anna talked about that we access because of our share position, our share gaining in many markets, you really can't tie our revenue growth to a simple GDP number in any particular geography.
If you think about the discussions we've had over the past year, for example, we've been calling out double-digit growth in Japan, where there's almost no GDP growth, and fabulous growth in the U.K., which certainly has had its challenges over the past year. The belief we have, the confidence we have in our ability to sustain revenue growth comes from the nature of our model, the investment choices we're making, that focus on share scale and relevance. It's certainly impacted by the economy, but there's not a simple multiplier. We've looked at every possible one, trust me, that you can look at to measure it.
I just have one follow-up for Anna. You don't mind? Sorry.
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I said it.
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Signal.
He called it.
All right. If I could, Anna, could you just talk about how you're going to use your learnings from your previous employer and bring it to American Express in your new position here? I just would love to get a sense of your strategy compared to the old one. Thanks.
I think there are a few things that I brought that were different as I came into American Express. The first is this commercial banking experience. The second is I've lived and worked outside of the U.S. in many places now for 20 years. The third is I've done a lot of strategy and partnership/M&A type stuff over my career.
As I came in, there's a few areas that I knew I was hired to get right. The first is setting out a very sharp strategic roadmap. Stepping back and saying, "Where are the profitable parts of this industry where we could grow?" and making sure that our plans and our investments really lined up against that. We did a lot of work on that with the team just after I started. The second is, I very much believe in our opportunities in our international markets.
The team that's here has delivered a meaningful step up in growth over the last two years. I'm very much behind continuing that. These are markets where we're already quite strong, building on consumer. We watch other longer-term opportunities outside of those traditional eight markets with interest in the years ahead. The third thing I would say when it comes to the sort of M&A and partnerships, my presentation was a lot about partnerships.
We really see them mattering tremendously when it comes to capturing the B2B opportunity, both to integrate into the payment flow, as Steve talked about, but also kind of temporary distribution partnerships in this increasingly kind of digital B2B world. One of my early hires was a head of M&A and alliances just to make sure that we are looking at those small bolt-ons or the partnerships that can make a difference. I'd say those are the main areas.
In the middle, right here. That's dead center. All right, Bob.
Thank you. Bob Napoli from William Blair. I hate to beat B2B to death, but another question on that and then a follow-up on cross-border may be related. In your B2B efforts, you're partnering AP automation, Steve, you've called out as being very critical and you're partnering with a few of those, Bill.com, Tradeshift. You have competitors in that space, whether it's a Coupa who's integrating that and taking it into business spend management.
You're partnering with also SAP Ariba. First of all, do you need to own the AP automation at some point? Do you need to carry it further into business spend management? How do you compete with somebody who's doing it all on one platform?
My answer would be that the AP automation space, if we'll call it that, is really fragmented today, and it's certainly evolving. Every week there's another headline. When we look at the AP automation, it's really also fragmented by customer segment, right? You see one type of player in the smaller end, a whole different set of players in medium, and then others in large.
We reflect on what American Express built in T&E. It's a very integrated solution around a payment category. You hook up the right merchants, you put the spend product in their hand, and you go all the way up to integrating into another important partner with Concur, right? That's what we do. To date, as the market is quite fragmented, we're working with as many people as possible to make sure we're plugged in and getting that spend and building capabilities that make plugging in easier, like the right APIs.
Over the long term, we'll continue to monitor. Anything that we do, I think we'll have to be also very clear on our starting customer strengths, particularly in U.S. SME, which is such a large part of our business, and making sure both partnerships and any bolt-ons focus in the small and medium end, most likely. That'd be my answer.
Cross-border, I think it was highlighted as a focus to accelerate growth of cross-border, there was some noise on cross-border coming out of fourth quarter earnings in some of your peers. I was wondering if you could give a little more color on how large is cross-border? How fast is it growing? Have you seen any slowdowns in changes in trends? Then how are you going to accelerate growth?
Let me just make a comment. It's a very small part of our business today. It's really when you think about cross-border non-card payments, right? Very small part of our overall business. We think there's an opportunity there from an SME perspective first. We did a partnership with Ripple and Santander, we'll continue to experiment in that space. It's something that we will become more aggressive over time in. Over here.
Hi, thank you. Dominick Gabriele with Oppenheimer. When you guys think about acquiring an account digitally, you saw the efficiency of your digital platform here, how does that change over time as perhaps digital wallets become a larger and larger focus? Have you seen that the accounts that you acquire digitally have more of a likelihood that they're going to use their digital wallets? How stickier are these balances? What does that mean for your digital efficiency through time? Thanks so much.
Doug.
Customers that come in through digital channels, which these metrics are going to get a little bit less meaningful over time because so many of our accounts come through digital channels. When it's 50/50, the metrics mean one thing. When you're acquiring over 80% of your customers digitally, it starts to distort these metrics a little bit.
They are engaged digitally across a range of behaviors and categories at a much higher level than non-digital customers. You saw a stat about the percent of customers who are acquired online who actually get their card credentials provisioned into their digital wallet before their card even arrives in the mail.
Their spend digitally, their propensity to serve digitally, their propensity to refer and remarket our products are all substantially higher than their non-digital peers. In terms of the stickiness of the volumes and the relationships that we acquire digitally, I see, I see no degradation in the loyalty effect or retention of those volumes and memberships over time.
Hi, thank you. Colin Ducharme with Sterling Capital. Quick question for you, Anna. I really appreciated that slide on the profit pool opportunity with B2B. As you build up those assumptions and you think about what's cardable versus what's not, can you help us look through your same lens? How much of that assumption is cardable versus not? How are you thinking about the unit economics tied to each of those two pieces?
Yep. The other statistic I cited besides the $90 billion is the 70%, right? The 70% of B2B payments by most estimates are still made via check or ACH. 30% are already electronic. Other estimates say that that 30% is growing faster than the profit pool overall at double digits.
That's where we are today. As we look at that it's clear that hooking into that existing customer base that I talked about, the SMEs, the large and global, being integrated into the payment flow with the right technical capabilities and the right partners as that trend happens. The benefits to customers are so many across obviously increased efficiency, as you saw in that Bill.com video, the elimination of paper, getting paid faster.
There's a lot of activity out there that integrates working capital and the payments to really sort of get you paid faster and having borrowing somewhere in that system. Just over time, what that means in terms of growing suppliers and growing the business. That is the structural trend, right? The movement of that volume electronic. It's beginning to happen, but it's kind of crazy that 70% is still via check or ACH when there's just so many more efficient methods out there.
Right. Just to clarify, in terms of clarification for the non-cardable B2B opportunity, what sorts of assumptions on the unit economics are you thinking about?
Yes, exactly. Yep. Margins range in that profit pool from a couple hundred basis points down to 30-ish, right? One of the reasons why with my team I'm focused on profit pool is the way we talk about the opportunity is because within that there's some spaces where we can grow quite profitably in line with economics that Jeff would be excited about. There are lower ends, so lower margin opportunities, but because of our scale and our infrastructure today, we can capitalize on by putting more volume through. Quite variable in that overall opportunity.
Just a quick follow-up for Steve. You touched on China. I know it's early there. You guys have an important advantage today. Help us get inside your head in terms of how you're thinking about the monetization there. A network-only opportunity. Relatedly, different geography, but domestically with the closed loop model, you have data superiority in terms of the visibility. What can you do to leverage that advantage to grow a network-only piece to the business? Thanks.
Yes. I think the first step one in China is building out the network, right? At the moment we have preparatory approval, which allows us to continue to build. We've decided to do that with a partner. A partner that we've had a longstanding relationship with from back in the Serve days and one that's very familiar with the market.
I think when you think about the economics in China it's really about getting a big merchant base which will work with our partner to get merchant acquirers, much like Visa, Mastercard would. We'll be out there getting as many issuers as we can. We do have that advantage because we have a lead. The economics in China it's all going to be about just getting transactions. Where I think the big opportunity is there's going to be a lot of traveling Chinese cardholders.
I think that's where we'll have better economics overall by getting even more scale and more relevance outside of the China market. To touch on the closed loop for a second, I think one of the things that was really attractive to the PBOC and will be really attractive to the acquirers and will be really attractive to our issuing partners is we will share our expertise and our learning around how do you manage premium customers?
How do you manage credit? How do you manage fraud? How do you utilize that data? Now that data will be the data from Chinese cardholders. We're not talking about the data from the rest of our base here. How do you use the data advantage to really get at your cardholders? I think that was as attractive as anything in granting us the license. I think that's a big leverage point for us as well. Over here we'll go right back to you.
Hi, Chris Donat with Sandler O'Neill. I have one question for Jeff on the digitization and where are you in terms of getting. It sounds like there's a lot of efficiencies coming in terms of acquisition and in terms of servicing. I'm wondering, is there a point on the near-term horizon where those efficiencies start to drop to the bottom line, or do you still have so much to do on investing in the digitization that it's going to be something of a wash over the next few years?
Well, gosh, I'll invite my colleagues to join, but I think Mohammed Badi's presentation should hopefully help you understand just how broad our digitization efforts are across the entire company. I would suggest they're completely integrated in everything we've said today about our financial model.
We would not be getting the marketing efficiency gains we're getting, which are key to offsetting some of the other margin compression we have without having made tremendous progress on digital. That is dropping to the bottom line. Yet we see a long runway, and I think Doug would second this, to continue to get gains.
Keeping our operating expense growth to 6% over eight years has been heavily about leveraging technology, the growing power of technology, and lower cost of technology to digitize every single part of the company, from things that you would see as a customer, like our service centers around the globe and the way we interact with merchants and card members, to frankly, back office things you don't think about, like the big back office I have in finance where we're using robotics to take tremendous amounts of cost out. I think we have seen a tremendous amount drop to the bottom line, and I think there's years ahead of us.
I think that's where you're seeing, we talk a lot about operating leverage, but if you think about the volume growth that we've had over the last eight years and to have 6% OpEx growth, that's not happening without the digital engagement. We didn't talk about this today, but even people that are no longer getting statements, that's increased over 40% in the last three years.
Mohammed had a stat up there that 70% of our millennial customers are digitally engaged with us. I don't think we'd be where we are in the expense journey without this. Certainly, the marketing efficiency, Doug's talked about it in the past, Mohammed had a slide up as well. That's driving a lot of our growth.
Yeah. I would just say the marketing efficiencies alone are driving hundreds of millions of dollars of efficiency. Some of it's going to be a cost play, whether it's marketing efficiency, whether it's the servicing efficiency. Some of it's going to show up in enhanced customer engagement and volume growth. I give the example of historically, we offer travel and lifestyle services, concierge service to the top 4% of our customer base globally.
Through the application of technology we bought when we acquired Mezi last year, we're going to be able to extend digitally offered travel and lifestyle support throughout our member base in a high-quality, cost-effective way, which we think is going to drive material step up in appeal of our products and engagement with our products.
I think the digitization journey shows benefits both in terms of cost displacement and some of the pure bottom-line enhancement that comes with that. It shows up a lot in increased customer engagement and service provision as well.
Okay. Then just shifting gears to another topic for Jeff, though. The Global Network Services business has had some headwinds over the last year from regulatory changes in Australia and Europe. Can you remind us when we expect to lap those this year? Or maybe it's for Henri.
Well, I'll make a financial comment, and then Henri, you might want to talk a little bit about the business. Remember, yes, we have been in a fairly slow process because we're in no rush of shutting down in Europe our GNS business in response to regulation. The Australia shutdown of the GNS business happened in a more compressed timeframe, but you're probably into 2020 before the impact of that has completely gone out of the numbers you all see, which are the GNS billings that we report each quarter.
The only other point I'd make is that the GNS P&L is probably less impacted than you might think because often there are quite different economics depending upon which part of the world is growing or shrinking. The economics are actually doing better than you might think from just looking at the billings number, but I'll let you add a little color.
I think Jeff covered the right part, which is for the most part in the EU and Australia, we'll conclude all of the partnerships that are ending. Most of it has happened. We're probably down to the last 20%, right? It will take maybe 6- 12 months for that to be lapped completely.
In the short term, you still on the metrics you see might see that it's not growing. If you normalize for the partnerships that have ended in 2018, we grew by 7%. We see that continuing and growing as we get to moderate to long term, which is good. We have 120 bank partnerships around the world. They're important to us. They provide scale and relevance around the world.
As Steve included in part of his presentation, part of what we're leveraging those bank partnerships going forward for is for expanded coverage for our integrated global network. That's where we're making some enhancements or revisions to our current relationships to enhance the effort that they can put towards building out our merchant network around the world.
Thanks. Jeff Campbell from Greentown. Henri, you guys are highlighting a number of partnerships today. I was wondering if we could just focus on Amazon. Steve, have you sort of given any thought to the longer-term strategy or build-out for a partnership like that? I think what's interesting is the product that you launched is off to a strong start on Amazon is in the U.S., but they're also in 13 countries globally.
You guys have a very significant global footprint. I just wonder if you can kind of talk about what your longer-term thinking is for that partnership. If you can't talk about that specific one, maybe just talk about marketplaces like Amazon and what your thinking is as you kind of think about the longer term for some of those more strategic initiatives of yours.
Yeah. I think when we think about co-brand opportunities, the first thing we think about is how do we leverage our strengths, right? The two things that I highlighted in my presentation, we've got some great travel assets, and we've got really great access into small businesses, and we have the great ability to provide spending capacity to those small businesses.
You'd have to ask Amazon, but I think from my quote, that's what was attractive for them, the accessibility to small businesses and again, the spending capacity that we gave. As we think about growing the partnership, we'll look at that as we move forward. I think you're right, though. It's off to a strong start, and it speaks to our position in the small business space.
We'll look at other opportunities from a marketplace perspective as they arise. If there are co-brand opportunities, we will certainly take advantage of those and bring all the payment capabilities that we have to bear on that, which is why it was so important, as Anna talked about some of the payment capabilities, things like merchant financing, things like working capital.
We talked a little about cross-border. I think when you think about the small business segment and you think about those kinds of opportunities, we're really looking to manage the overall working capital flow of small businesses. I think that's what makes us an attractive partner for marketplaces and obviously made us attractive partner for Amazon.
Quick follow-up, same topic. Some of your merchant acquiring partnerships that you're naming, Square, Stripe, Adyen, they're some of the fastest-growing acquirers in the world. If you think about your own strategy with them, what stands out the most as far as interesting opportunities that you think you have with them? Is it a product type of strategy that you're working on, or is it an acceptance strategy with the merchants? I'm just curious what your thoughts are.
You could throw Stripe, Adyen, Square. You throw PayPal was probably the first one that we had. They're total acceptance plays for us. Now you see as we talk to PayPal over time, as these companies mature, there are other opportunities, and we're taking advantage of those opportunities. We have great relationships with those companies.
We talk to them all the time. As partnership opportunities come up beyond acceptance, we're open to those, and you saw that happen with PayPal. At the moment, they provide a tremendous amount of coverage leverage for us. Any other questions? Yes, right here.
Hi. Thank you. Vincent Caintic with Stephens. Two questions. First, going back to the 2019 guidance, really appreciate the color on that and the revenue guide and the EPS guide. I guess when you think about, say, going through that stressed macroeconomic situation, is that a scenario where regardless, you're able to achieve at 8%-10% year-over-year revenue growth, the investments that you make are rewards or something in order to get to that 8%-10%? I'm just kind of wanting to understand the EPS moves as a result of that. Second point, I thought it was interesting the merchant offers of the Amex Offers program.
It's almost like that's a co-brand or private label type offering to the customer where it's being paid by the merchant without necessarily yet having that co-brand relationship yet or maybe a precursor to that. I'm just kind of wondering what the merchant engagement has been on that, maybe if there's any more rollouts, any other opportunities there.
Let me answer the second one first, then I'll kick the first one to Jeff and, Andre, if you want to provide any color. I'll attempt to answer the second question. I think what we try and do with our partners is add value to our mutual customers. That's what we try and do. Whether it's fully funded, co-funded, half fund, we work out between ourselves what's the right way to access the customers.
Yes, I think you've raised a very good point that without the co-brand relationship, we've been able to provide value to our joint customers. Why does that happen? Well, you look at Fine Hotels + Resorts. We have two terrific co-brand relationships with Marriott and with Hilton. If you look at the breadth of our Fine Hotels + Resorts program, it's enormous.
It's not just in the U.S., it's on a global basis. What happens is we're able to put together great offers for our joint customers, those are customers that the hotels desperately want staying there. It's a great value, especially if you're a Platinum cardholder. We've done the same thing in retail, whether it's with the Centurion base, the Platinum base, or other members within our ecosystem.
We'll continue to do that. We do that because our merchant partners find it as a high ROI investment for them to either increase customer engagement or to acquire new customers. Our ability to have these great relationships with merchants and being able to access our card base, it's hard to replicate.
People try and replicate it and come up with programs that are not quite as scale as ours, we're going to continue to push that because we think it adds value on both fronts. I don't know, Henri, if you have anything else to add on that.
What I would say with Amex Offers leverages the benefit of our integrated payments platform. If you think about what another financial institution or issuer would be able to do, they might be able to segregate based on gender, geography, based on age, maybe based on the spend pattern on that product.
What we can see is what happens across all of the merchants and all the merchant behavior in addition to the spend information on the issuing side and help merchant partners target certain segments that they may not be able to find on their own. That's really helpful to them, then we can make it available to them in a digital platform right there on someone's phone, and they can see the results. It only gets loaded on if someone has an intention to use it.
What we see is even when someone loads an offer and doesn't use it, we see the spend go up at the merchant just because of the engagement that happens. It's alluding to what Mohammed said, digitally engaged customers actually spend more, and they're better customers for us. We see Amex Offers as a great platform that works well for the merchants, works well for our business. As Steve said, sometimes we fund, they fund, we share, depends on the situation, we're taking it to many markets around the world. It's a global capability, we like it a lot.
On revenue growth, I'd just say, look, we remain very comfortable with the revenue growth guidance we've given for 2019, FX-adjusted growth to 8%-10%. In different kinds of environments, revenue growth should always, given our focus on share scale and relevance, we will always be seeking to get it into the top tier of the industry.
If you have a financial crisis that looks like the financial crisis of 2009, you should not expect 8%-10% revenue growth. You should expect us to maintain the focus on share scale and relevance, and we think that will drive top-tier revenue growth.
It was almost an hour. That's okay. It's lunchtime, too, so people have to get to lunch. Anyway, we want to thank you for spending some time with us today and coming out on such a beautiful day. Thanks for your interest in American Express, taking time out of your day, and have a great day. Thank you very much, everybody.