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. And as you can see, we did this in the morning this year versus the afternoon, and we ordered no snow.
For those of you that
are brave enough to make it last year, it was quite the March day. So anyway, welcome everyone and thank you for joining us both in person and on the webcast and welcome to our 2019 Investor Day. Today, we're going to go through 4 presentations. We'll take a break after the digital presentation and we'll finish as we always do with the Q and A session. I'll 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'll then spend most of my time discussing how we'll 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'll spotlight progress on 2 of our strategic imperatives. Anna Mars, our new Head of Commercial Services, will do a deeper dive on B2B payments and Mohammad Badi, our new Chief Strategy Officer, will discuss how we're continuing to enhance our digital capabilities. Jeff will then discuss our financial growth algorithm, which enables us to invest consistently for share, scale and relevance. He'll 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's 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%.
And 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 2 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. And in the merchant business, we signed over 1,600,000 merchants in the U. S, the 2nd consecutive year we've added over 1,000,000 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 4 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 3 key objectives growing share, for example, by accelerating billings and lending growth driving scale by increasing new customers acquired and merchants signed and 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 AmexOne, which enables us to deploy our mobile app globally with one code base. And we've established new enterprise wide 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 Mars, who joined our leadership team last September, has a wealth of knowledge in commercial banking. And Mohammad 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 their 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% to 10% and earnings per share guidance in the range of $7.85 to 8.35 dollars 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, but 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 3 company wide initiatives that will accelerate progress against all our strategic imperatives. 1st, 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. 2nd, we're expanding our powerful network of strategic partners to bring additional value propositions to our customers. And 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. 1 of our differentiated assets is our large high spending customer base. Customer engagement is strong. Average spend on our cards is 3 times greater than our competitors. And because of our integrated model, we deliver approximately 3 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.
So as you can see, 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 1,000,000 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.
So 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 2nd 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. And our Member Get Member program creates a network effect.
In 2018, 33% of those who were 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 the last 3 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.
So what should you take away from our strategy of building on our customers 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 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. And 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 and 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. So 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. And 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 brand partner and the one we've had the longest relationship with. It is a great example of a mutually beneficial partnership. Recently, Delta's 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, 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 and 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. And 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 1,000,000 new accounts in each of the last 2 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 1 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 2 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. And 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 Synaptik.
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. And we're embedding lifestyle tools access airport 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. And 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 3 tiers based on our overall position and potential in each country. In Tier 1, all 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 UK, we're focusing on expanding coverage in several vertical categories nationally and with smaller merchants locally in London. We've reoriented 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. And in consumer, we're working on strengthening our premium card portfolio and creating new partnerships. Next, Tier 2 countries represent another 9 percent of our international billings. Here, we're making investments in at least 1 or 2 businesses. We're also using Tier 2 countries to test 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 and 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. But it all starts with coverage. Without the proper coverage, you cannot capture spend. So 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. So we've done an analysis of where our card members live and where they travel to 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 3 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. So 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.
But China is unique, so 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 and we are entering as a network. We'll partner to issue cards and acquire merchants and 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 and 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, but we're excited that we're the 1st non China based network to receive preparatory approval to build our business there. In summary, we have strong momentum in international and we have a long runway for growth. We've created a more focused strategy based on the tiered country approach to continue delivering share taking growth that is supported by our integrated model. And 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 4 strategic imperatives I outlined on becoming CEO is producing strong results as we demonstrated in 2018 and this focus will continue.
We have established a strong foundation and momentum to sustain growth. And going forward, we plan to accelerate our progress against our strategic imperatives through a focus on 3 enterprise wide initiatives: focusing on our customers as a platform for growth, expanding strategic partnerships and implementing a more focused international strategy, which includes increasing coverage globally. In closing, I am confident that our foundation, our enterprise strategy and the team that runs our company have set us on a course towards sustainable growth. With that, let me turn it over to Anna Mars, President, Global Commercial Services, to talk about our growth opportunities in B2B payments.
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 of Standard Chartered Bank and was also the regional CEO for ASEAN in South Asia. Before that, I was a partner at McKinsey in the firm's banking practice. And prior to McKinsey, I ran a financial and 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 4 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 focused international countries. So 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. 2nd, we have many opportunities to grow. Future trends should enable us to increase our relevance in parts of the commercial landscape, which we're less well penetrated today. 3rd, we're investing behind these opportunities. I'll give examples of how investing to differentiate and grow our core card business to increase scale in business financing and supplier payments and to digitize the customer experience.
And finally, I'll touch on what the future looks like when we successfully execute our plans. So let's start with an overview of the commercial business today. Commercial has a leading customer base. We serve 3,400,000 businesses with 14,500,000 card members. We think of these customers in 2 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 5 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 and E cards. And 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 Lendi business as well with 14% loan growth.
Now 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 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. But 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 travel and expense spending and any other use case. By working capital, we refer to short term invoice and supply chain financing, term loans less than 2 years in duration and any other short term trade financing. For SMEs, this also includes borrowing on cards. So let's talk about the growth opportunity. You can see here that overall B2B payments and working capital represent an estimated $90,000,000,000 profit pool in the U.
S. And our top 5 international countries. It's split roughly 2 thirds SME and 1 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 $61,000,000,000 profit pool, dollars 41,000,000,000 of domestic payments and $20,000,000,000 of international payments.
Within this overall picture, we see 3 levers for Amex to grow. 1st, 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 $61,000,000,000 in 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. And 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 $3,000,000,000 T and E profit pool. However, broader supplier payments represent a $14,000,000,000 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 needs to transform how companies small and large run their businesses. More and more 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.
And finally, while 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 the 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. So for example, U. S. SME, as we mentioned previously, we're the number one issuer of small business cards. However, 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%, still under penetrated and we have the potential to double down on our business, replicating our successful U. S. Model while adapting to country specificities. And finally, global and large. We have relationships with 63% of the Fortune Global 500, but we estimate 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. As 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 and E leadership while expanding more broadly into supplier payments.
Now 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. So 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.
2nd, 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.
Next, 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 times higher than other card issuers.
And 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, enabled 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. The first in this section, the mission, I think it's always important to ground a strategy in a mission and our mission in commercial
is
to be essential to our customers' business every day. As we go into this presentation, we'll talk a lot about our very strong position in U. S. SME and T and E. However, 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 3 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. 2nd, 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. And 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. 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 2 examples of how we're evolving our business cards to better address our SME customer needs.
1st, the Business Gold Card. In November, we launched a new Business Gold Card, which features membership reward points that automatically adjust to a company's top 2 spending categories. We also intubated 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. And 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 video. To those following along via the webcast, please click on the link next to the slides titled Amazon
Partnership.
Okay. We're really excited about that partnership with Amazon. While the card will likely always be where we start with a small business customer, the card alone does not meet all of our customers' needs. SME customers want easy access to working capital and payments and 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.
The suspended product offering is relatively recent as compared to our traditional card products, but 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 over $10,000,000,000 for U. S. SMEs alone, a profit pool in which we have a relatively small share today. I think the 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 then went on to enroll in They then 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. Payments, 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.
Let'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 then drive them to our site, personalizing the content to improve conversion. Once acquired, we engage our customers to the web and mobile app to offer differentiated service and expand on the relationship. And finally, we connect with our customers via loyalty programs, which should be 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 by digital channels, representing 18% year on year growth. We've seen an 83% year on year growth in new accounts acquired through digital referrals. And 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 over 25% in our 5 largest international countries. And there's still significant runway to grow. We currently have relationships with less than 5% of the addressable SME customers across our top 5 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. And thanks to our integrated model, we're partners with our merchant teams to enable our SMEs to make payments to their suppliers wherever they operate. And 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 band relationship with Qantas in consumer for a number of years. In 2017, we decided to relaunch our small business product. We built off consumer's infrastructure and it worked.
We saw the benefits of the refreshed product in 2018, driving nearly 3 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 the opportunity in cross border supplier payments. Supply chains are increasingly global. As I cited cited earlier, cross border payments represent a $20,000,000,000 profit pool.
Customers can 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 and E business. One of our most important advantages is our integrated model, which allows us to access issuer, merchants 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, for one client, we're able to reduce non compliance spend by over 40%, providing more control over what their employees were spending on. And for many clients, our analysis enables them to decrease spend leakage. In this example, total employee utilization improved from 72% to 90% for a large client and 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 1 B2B payment category, T and 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 EarlyPay 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 and E focus. EarlyPay is an exciting, distinct and simple new addition to our suite of solutions. For users of Earlypay, 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 in the platform and then receive a payment directly to their bank account. The platform generates savings for buyers and improves cash flow for suppliers. Now it's simple for the customer, but it would not be simple for a competitor to stitch this together.
EarlyPay 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. So 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 $1,000,000,000,000 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. And over the long term, we'll co develop new capabilities for both buyers and suppliers, creating a growing network of customers. So 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. Our international SME customers will achieve scale in our largest international countries by leveraging our U. S. Assets and focused on our American Express winning country by country strategy.
And finally, on global and large, we'll maintain our leadership position in T and E. We'll also deploy new capabilities and partnerships to capture more of our customers' B2B payment volume. So to close, many of you will have seen our global brand platform launched 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. And we're confident as we execute on these plans, we'll have a growing base of customers who won't do business without Thank you. I now want to hand over to our Chief Strategy Officer, Mohammad Badi. Mohammad?
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 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 7 countries across 4 continents. So yes, an excellent training ground for the global business that is American Express. But 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 have 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.
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. So with that, today I'm going to cover 3 topics. 1st, I'll give an overview of Amex's transformation into a digital first company and our outstanding results.
2nd, I'll share how our digital approach has spanned all elements of Amex's model. And finally, I'll talk about how we're positioning for the future. Now we all know this. This is a really exciting time to be in payments. The landscape is evolving quickly.
Three factors are driving the change in our landscape advancing technologies, changing customer needs and evolving macro trends. And 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.
And if you think about it, becoming digital really has been a natural evolution for American Express, given our lack of a legacy footprint. Now digital is a bit of an ambiguous term. So let me be really specific. We think about digital in 4 buckets, and you see them here. We 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. But what I want to focus on now is the results of our transformation. Today, 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 lifecycle. 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 in many cases take advantage of the way they can seamlessly switch from one device to another. Our customers spend digitally. 4 of our top 5 merchants are digital.
Now I know many of you have asked the question, what will happen to our business when the card goes away? It's already happening. 60% of proprietary volume is from card not present transactions. This includes everything from online shopping to paying your utility bill to automatically re upping your transit card. And as you saw from Steve's presentation earlier, business has not been better.
And servicing, this is an area where we see digital working for us every day. Over the past 3 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. And 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. And across all of these newly acquired customers, almost 70% are digitally active within the 1st month. Among corporate decision makers, these are the program administrators who are choosing Amex as our company's payment provider and in 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 and 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% to 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 3 examples. 1st, early in our transformation, we embrace the power of digital marketing and its inherent efficiency. Our marketing efficiency, here we're talking about our acquired buildings for every dollar invested, has grown over 20% per year in the last 2 years. 2nd, over the past 7 years, our fraud rate has decreased from 3.5 basis points to 2.5 basis points.
And then 3rd, OpEx. We enjoy a 92% digital bill pay rate. Among millennials, 70% have gone paperless. Overall, we've reduced paper servicing communications by 30% over the last 3 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'll now walk you through the 4 buckets we use to divine digital and share how they impact all elements of our differentiated model. You'll see 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 economic flexibility that comes from playing end to end and the data we receive across the value chain. Now get this, 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 and our economic model allows us the flexibility to experiment. And of course, the proliferation of digital commerce means more payments, which creates more data. Let's get into the 4 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. 1st, digitizing our core. When we set out to digitize our core, we started with the customer and thought about the customers thought about the journeys 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 3 criteria. 1st, personalized relevant experiences that show our customers we know them and we can deliver the right solution at the right time. 2nd, coordinated experiences across channels backing our customers on the go even on multiple devices.
And 3, 3rd, 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 and 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 and we make the process seamless for them. In fact, if you came through our MGM program, you are 6 times more likely to refer another friend.
When a 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 pre filled fields in the application wherever possible and 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 benefits immediately. MGM is our fastest growing digital acquisition in the U.
S. And our largest outside the U. S. We see higher approval rates and higher spend from card members acquired through this program. And 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 Referral Business and we've seen 50% growth in acquired small business billings from this channel already. Now let's look at our 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 offer seamlessly with a click of a button or a voice command. And when the merchant makes the 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. And there's 2 major elements that support our digital first end to end journey. The first is automation. We've streamlined what customers experience and have freed up 100 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 the capability once and then easily deploy it to new geographies and customers.
So 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.
And 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 UK, 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 would have taken a year ago. And both within and outside our app, we've rolled out mobile messaging and chat functionality that embeds a world without 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 is 75%, automation plays a key role, an important role in assessing our customer care professionals. Beyond our app, we bring our service into our customers' preferred channels, such as Amazon Alexa or Facebook Messenger. And for businesses, we're currently piloting a solution with Apple.
The 3rd 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 2 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.
And then finally, we're continuing to invest in personalization, many successes to date and a lot of excitement for what's next. So 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. 2nd, 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. Now let's move on to our 4th 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. Also, 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. And 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.
Now 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 2. Is that too much to ask? To address this, we partner 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. So that's an overview of where we are today. Now 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 digital wide 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 wave 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. So 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 PayItPlanet. On the commercial side, you heard Anna speak about our innovations in AP Automation. And 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 Easy 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 2 parties to the scheduling of payment. And 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. And 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 and 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 and 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. And to tie back to my comments in the beginning, I'm really excited to be part of this 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. And remember, in an increasingly digital world, each of these advantages become more meaningful. We've transformed this company.
We have maintained our long standing 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.
And with that, we'll take a quick break and return in 20 minutes. Thank you.
Ladies and gentlemen, our program is about to resume. Please return to the auditorium. And as you find your way to your seats, 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. So 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? So 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 on to and that's the Q and 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. And hopefully, after the next 30 minutes or so, you'll have an even better understanding of how all that comes together financially. So 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. And in any kind of environment, it should lead to revenue growth levels in the top tier of the the expectations given the environment at any point in time. So 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. And I certainly hope after Mohamad'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. And 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 6 straight quarters of having revenue growth on an FX adjusted basis of at least 8%. And it's that focus on share, scale and relevance that led to the results in 2018, very consistent with the model, right, tax act and some other very positive tax discrete items we had, 13% EPS growth.
And when you look at our 2019 guidance, if you were to take, say, the midpoint of the EPS guidance range, you're at 8% to 10% revenue growth and 11% EPS growth. That is the same foundation that we see we're following into the future. So 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. So 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. But I also know that I talk to many of you in this room who say, Yes, I hear that, Jeff. But boy, when I think about the growth you'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.
And 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 percent 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. And 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. And so you put all that together and we've had 5 consecutive quarters of having FX adjusted discount revenue growth above 6%.
Now 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 2 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 OpBlue program in the U. S.
The impact of a couple of strategic partnerships we struck. But the second point I would make here is that you've now heard over the past year, both Steve and I steadily deemphasize our focus on the average effective discount rate. And 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. And 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. And here we were really pleased because when you look at 2018, you actually see a steady acceleration in our card fee growth. And as I look forward, I would expect card fee growth to continue to be above the average revenue growth for the entire company. Now why do we have that confidence? Well, 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 and then having the courage to price for that value. It's a long established road and 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. So 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. And as we've talked about for many years now, and 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 underpenetration of our own customers' card based borrowing behaviors. So if you look at 2018, 59% of our growth came from just getting better at capturing our existing customers' borrowing behaviors. And 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.
Now as we grow our lending balances and 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. And as you all know, in a rising rate environment, 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 4 or 5 years that is really quite a feat and I would suggest fairly unique and 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. So, you put all of those things together and we feel really good about the revenue guidance we've provided for 2019. So let's talk about what's driving that revenue growth. And of course, it starts with the choices we have made over the last few years around investments.
And the
first point I would make is there's lots and lots of things we do to drive revenue growth. And 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. And of course, we have to balance the fact that different things we do to drive growth hit different lines of the P and 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 in 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 will accelerate those initiatives to drive further growth.
Now 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. And 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. Now there's 3 parts to this, card member services, rewards and marketing and business development, and I'm going to stop on each one of the 3, talk a little bit about them. So let's start with Card Member Services.
So 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? Well, 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. And so these are things like the Global Centurion Lounge collection, like some of the digital efforts that Mohammed talked about, the Mezi acquisition, many of the experiential things that we offer to our card members. 2nd category of customer engagement costs are rewards.
So 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. And certainly 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 3rd category in customer engagement is marketing and business development. The business development half of that consists of 3 things, right?
It's payments to our corporate clients, payments to our GNS issuing partners and it's payment to our co brand partners. Now certainly, the fastest growing of those 3 in recent years has been the payments we make to co brand partners. But it is really important to make the point that because of the range of unique assets we can bring to our cobrand 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. So when you look at our co brand partners, certainly Delta is the most significant, 8% of our billings, 21% of our lending. And there's really 3 others who are individually significant, Marriott, Hilton and British Airways.
And 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. And 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 2017, which I think is a real testament to the model and the team. So our last category of customer engagement costs is traditional marketing costs.
And 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. And one of the biggest sources of that efficiency is what Mohammed already talked about, and that is the incredible progress we have made in recent years on getting ever more efficient at making digital our main acquisition channel. And so just like I called attention to Steve's number of 64% of new card members being on fee paying products, I really do emphasize a number that both Mohamad and I have in our charts and 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, and yet we see a long runway to continue to get efficiencies here. So 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 long standing history of getting operating expense leverage. So 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 8 years, our company has grown its volumes by 66%, while only growing the operating expense base of the company by 6%. The 6% is not the CAGR.
I mean, we've grown 6% in total in 8 years. So in other words, it's a growth rate of less than 1% a year. And of course, that's driven by the nature of our integrated model, our ability to leverage technology, our global scale, centers of excellence. And we see a long runway 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 evermore digitally. And 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.
So 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. So we have to find even more efficiencies elsewhere in the company to fund the investments we're making in that area. So 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. So let's talk a little bit about how we approach risk management. And I would start by reminding you of just some of the inherent strengths of the integrated model we've been talking about all morning.
So 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 to current write off. And 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. And 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. So we feel good about the nature of our model in the face of any potential future downturn. But we're not oblivious to the many conflicting signals in the external environment and 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. And 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. And part of that is thinking about capabilities, part of that is thinking 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 2,007. So you put all that together and 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 model, and that's our disciplined approach to capital deployment.
And of
course, we start with a tremendous advantage, right? We generate capital a rate nobody else in the industry does with ROEs that were as far back as you might want to look have always been at the top of the industry. So 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. And you should expect going forward that the dividend will grow roughly in line with the way our earnings grow.
And then beyond that, we use our capital a little bit to support organic growth every year, need a little bit to support the occasional M and A that you've heard talk about a little bit here, although that's mostly capability oriented smaller transactions. And 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% to 11% range. And we draw particular comfort from the fact that if you look at 2018, where we started the year below our target capital to our capital ratio while still returning $2,900,000,000 to our shareholders. We see that as a tremendous testament to the strength of our capital model. So 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. So it's March 13. So we are in the process of closing the books on the 2nd 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.
And 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. 2nd 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% to 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. So in Q1, I would expect that to again be a more modest headwind for us. And as you go through the rest of 2019, assuming the dollar stays roughly where it is, that effect will lessen if 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, and 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.
And 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. So Q1 then leads to the full year. And 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% to 10% range and having our earnings per share be between $7.85 8.35 dollars 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, but 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? And so 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. So 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.
So I've now been here for 6 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. And 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.
So 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 and A. And I'll invite Doug and Anna and Andre and Steve to join me on stage for a Q and A session as we bring some chairs out hopefully to sit in. Thank you. I'll sit here.
Just making sure we have one more chair, unless maybe there is a message. Steve was trying to send to it.
So even though Anre and Doug did not get an opportunity to present, we thought you'd probably like to ask them some questions. They begged to present, but we it was true. The crying was unbelievable, but we'll save them for a later date. But anyway, so we're here and we're happy to take whatever questions you have.
So we will go right over
here, who has the microphone.
Thanks, Steve, and thanks for doing the sales today. It's Jamie at Susquehanna. Ana, 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 described as secular versus a structural like that video you showed of moving from paper to online versus cyclical, if you could decompose that? And 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 2, B2B and then CNP. Thanks.
Okay. So I'll kick these over. They can add a little bit more color. But 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.
So I think that has to do with the economy. But 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. So I think that's where there's a huge opportunity for us to continue to capture spending. And when you think about sort of the small business piece of it, it really is expanding our organic core and it's the whole concept of the customer as a platform. So let me stop there and ask Donna if she has any color to add to that and then we'll get to your second question.
Yes. So as we think about the opportunity, we don't use the trillions of volume. We come back to these billions of profit. And I think that's an important lens to put on the opportunity. So $90,000,000,000 of profit in B2B payments and short term working capital.
And within that, as you kind of look back on that slide, there are aspects of that, that have these enormous trends flowing through them, the digitization of payments arguably being the largest on that $61,000,000,000 of payment profit. And that is simply structural and is, I believe, inevitably moving towards electronification. And there are aspects of that profit pool that obviously go up and down a bit depending on economic cycles and corporate spend. But 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 larger global or SME.
So as far as discount rate, the second question, we're doing we do better than 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. And 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. I think there's we look at industries, as I've said.
We look at geographies when we think about this. But that is an advantage that we have and one that really just increases our overall margin. But I don't see that impacting the discount rates. So Henrik?
The thing I would remind you is 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 the standard industry tables and fees in the way the other networks do. And 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 Spread Cards.
Good morning. Bill Carcaccio with Nomura. The networks have talked about how they're partnering with 3rd 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 3rd parties? Or is the merchant acquiring capability something that you're leaning into more heavily?
And then separately, Anna and Anre, what can you or are you doing to work together to kind of expand B2B acceptance within your teams?
So let me just start it off and then I'll kick it over to Anna and to Anre. 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 an entire integrated payments platform where we have relationships with the suppliers and so forth. And we have the ability and Anna talked about EarlyPay, we have the ability to price those B2B transactions in the appropriate way that there's value created on both sides and we have the data. I think the other thing that we talked about and that was in my presentation and 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.
And so 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. So
Yes. We think a lot about the various ways the various participants are trying to attack this $90,000,000,000 B2B profit pool. And everyone comes at it from their position of kind of where they believe they have a competitive edge. And the slide I put up about our sort of platform, we have the integrated model at the core is very much how we see it. So 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 on B2B is the customer base we have today. Such a significant share of U. S. SME who are our customers in one product, but most of them only have one product. And then the fact that T and E, this really strong solution only taps into 2% of large customers AP files, that is truly the platform for growth.
So with those customers and working with that closed the integrated model, that's where we're focused. And Andre 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 is different about our models. We leverage the same requires that the other networks do around the world. Whether we're working with First Data or Worldpay or working with Adient or Stripe or Square. And so all of 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. And 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 customer and go 1 to 1 and build Tradeshift, those things, with the AP Automation, the build.com, the Tradeshift, those things just gives us a great solution to be able to go to commercial midsized companies to say we can help you figure out how you electronify your AP spend.
Let me just add one other thing. It will 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. And so that's what 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. And so that's why the partnerships that we put up are so important. Let's go on this side, Craig. Maybe not, maybe
Don. Hey, Steve. It's Don Panetti, Wells. So I guess on international, you sort of focused on that. And I just want to clarify, are you pushing Acceptance harder in international like today versus a year ago?
I feel like the 20% number I've heard before. And then 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. But if you throw in the sort of growing the acceptance, how does that impact profitability?
Yes. So when you think about we've thrown out LIF numbers from a 20% perspective probably in years past. We're talking about coverage. Let me just talk about the differences in LIF and coverage because we signed 1,006 merchants in the U. S.
Last year to inch our way even closer to parity with Visa and 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. And so 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, it is look, the world is a big place, right? And 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. And so we looked at what we called our top tier countries from a coverage perspective. We then looked at the top cities across the world and prioritized those. And then 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. And so 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. And we believe the way that we've structured it will be the biggest 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. And let's be honest, our coverage is nowhere near as good as it is in United States. And so we're having that growth and we still have opportunities to improve coverage. And so we have opportunities, I believe, to even get more share of wallet. And 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? And then we'll go to Sanjay.
Thanks. Craig Moore with Autonomous. A couple of questions. First, I wanted to get your big picture view on the fight that Visa is having with Kroger right now and what that means for the industry. 2nd, in B2B, you're inevitably going to have to ride you alluded to this before, but inevitably you're going to have to ride the faster payment rails.
How do you intend to access that capability? And just last, the relationship with PayPal and P2P, traditionally, that's a 0 revenue business for those that are in it. So is there a financial relationship that's involved in that integration?
Thanks. So 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. And she'll go out with her friends and she wants to get her points and so forth and they'll Venmo her the money, but it will 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.
So is there a financial arrangement? Keeping that money in the system and having that re spent is a big deal. So let me ask Doug to sort of comment a little bit more on that, but that's the high level.
So Steve just gave you
a little sneak peek of one of the use cases. But I mean, I would look at it 3 ways, Craig. I mean, 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. 2nd piece I would say is it should drive preference for our payment products, especially in these social purchase scenes like Steve described. And the 3rd place I think we'll find some revenue is finding some 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.
So 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.
So, yes, I may have given you a sneak peek, but otherwise, the answer would have been no comment, which probably wouldn't have been happy with. But let's talk a little bit about your second question, which was you think about fast payments, fast ACH.
And I think that's
a capability that we'll need to have at some point. But 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. So that's number 1. Number 2, most of these merchants or suppliers are getting paid anywhere for 60 to 90 days.
The fact that they could get paid in 5 minutes is not really their big concern right now. Their big concern right now is getting paid in less than 10 days. I mean, if we can improve this process and this is where EarlyPay is a really 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 days or 60 days and having run the procurement organization, I know that's what they wait, That's a big deal. And so I think over time, yes, that's going to be a really important capability, but I think you have to run before you walk.
So that would be my perspective. Anna?
No, 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 but in the 90 day to 10 day part of the opportunity. And I 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. And I pass back to Andre, he might want to do that Kroger question too.
Sure. About the network. Let me just add a point of view on that one.
He's got a point of view. But 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. And we strive to do that every single day.
And so and as Anre said, and that's one of the reasons why our model is a little bit different. I mean, we'll have 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. Yes. So, 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
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. So 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 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 guess I 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?
And then 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? And then I have a follow-up for Onur.
You want to answer the first one?
Well, so the point we're making on the financial growth algorithm is that we start with share, scale and relevance. And 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, and that's why we give you our annual EPS guidance to try to help you understand our perspective on the environment at
the time. So and 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 will invest money to get that coverage.
It makes no sense to stop that 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. And in a lot of times, your go to move is to stop those things that you would determine to be as discretionary. And 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. And so 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. And we believe that is our merchant coverage, our investment in our network and our investment on our capabilities to access those opportunities for growth moving forward. So that's why we say we can't always guarantee it will 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 transparent as we can.
But 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? Or what if we continue 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. So 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 the 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 UK, which certainly has had its challenges over the past year. So 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 and measure it.
I just have one follow-up.
He did. He said it. I said it. He did say it. He called it.
All
right. Thanks.
But 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.
Well, so 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, many places now for 20 years.
And the third is done a lot of strategy and partnershipM and A type stuff over my career. So 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 2 years. And I'm very much behind continuing that. These are markets where we're already quite strong, building on consumer and we watch other longer term opportunities outside of those traditional eight markets with interest in the years ahead. And the third thing I would say when it comes to the M and 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 sort of digital B2B world.
And one of my early hires was the Head M and A and Alliances, just to make sure that we are looking at the small bolt ons or the partnerships that can make a difference. So I'd say those are the main
areas. I'll be in the middle, right here. That's dead center.
All right, Bob.
Thank you. Bob Napoli from William Blair. And I hate B2B to death, but another question AP Automation, Steve, you've called out as being very critical and you're partnering with a few of those, bill.com, trade shift. 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? And then do you need to carry it further into business spend management? And how do you compete with somebody who is doing it all in 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 day, every week there's another headline. When we look at the AP Automation, it's really also fragmented by customer segment, right? So 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 and E.
It's a very integrated solution around the 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? And that's what we do. So to date, SMART 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. But anything that we do, I think, must be also very clear on our starting customer strength, particularly in U. S. SME, which is such a large part of our business and making sure both partnerships and any bolt ons focus on the small and medium end most likely. So that would be my answer.
Cross border, you had I think it was highlighted as a focus to accelerate growth of cross border and there was some noise on cross border coming out of Q4 earnings and some of your peers. And I wonder if you can give a little more color on like how large is cross border? How fast is it growing? Have you seen any changes in trends? And then how are you going to accelerate growth?
Yes. So it's a I'll let me just make a comment. It's a very, very small part of our business today. And it's really when you think about cross border, let's call that cross border non card payments, right? Very, very small part of our overall business.
We think there's an opportunity there from an SME perspective first. We've done we did a partnership with Ripple and Santander, and we'll continue to experiment in that space. But it's something that we will become more aggressive over time in.
Dominic Gabriel with Oppenheimer. When you guys think about acquiring an account digitally and you saw the efficiency of your digital platform here, how does that change over time? A larger and larger focus? Have you seen that the accounts that you acquired digitally have more of a likelihood that they're going to use their digital wallets? How sticky 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 fifty-fifty, the metrics mean one thing. When you're acquiring over 80% of your customers digitally, it starts to distort these metrics a little bit. But they are engaged digitally across a range of behaviors and categories at a much higher level than non digital customers. So 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.
So 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 no degradation in the loyalty effect or retention
Colin Duchamp 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?
And how are you thinking about the unit economics tied to each of those two pieces? Yes.
So the other statistic I cited besides the $90,000,000,000 is the 70%, right? The 70% of B2B payments by most estimates are still made via check or ACH. So then 30% are already electronic. And then other estimates say that 30% is growing faster than the profit pool overall at double digit. So 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, if you saw in that bill.com video, the elimination of paper, getting paid faster. There's a lot of activity out there that integrates sort of working capital and the payments to really sort of get you paid faster when they're and having borrowing somewhere in that system. And then just over time what that means in terms of growing suppliers and growing the business. So that is the structural trend, right?
So the movement of that volume electronic is beginning to happen, but it's kind of crazy that 70% is still via check or ACH when there's just so many more 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?
Margins range in that profit pool from a couple of 100 basis points down to 30 ish, right? And 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 end, so lower margin opportunities that because of our scale and our infrastructure today, we can capitalize on by putting more volume through. But it's 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.
And then 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. So I think the first step 1 in China is building out the network, right? And 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 long standing relationship with from back in the serve days and one that's very familiar with the market. So 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.
And we'll be out there getting as many issuers as we can, and we do have that advantage because we have a lead. And the economics in China, it's all going to be about just getting transactions. Where I think the big opportunity is, is there's going to be a lot of traveling Chinese cardholders. And 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. But how do you use the data advantage to really get at your cardholders? And I think that was as attractive as anything in granting us the license. So I think that's a big leverage point for us as well.
Over here, and then we'll go right back to you.
Chris Donat with Sandler O'Neill. I had 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. But 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's presentation should hopefully help you understand just how broad our digitization efforts are across the entire company. And 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.
And 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 8 years has been heavily, 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. So I think we have seen a tremendous amount drop to the bottom line, and I think there's years ahead of us. Yes.
And 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 8 years and have 6% OpEx growth, that's not happening without the digital engagement. I mean, we didn't talk about this today, but even people that are no longer getting statements, That's increased over 40% in the last 3 years. And Mohammed had a stat up there that 70% of our millennial customers are digitally engaged with us. So I don't think we'd be where we are in the expense journey without this.
And certainly, the marketing efficiency, Doug has talked about it in the past. Mohammed had a slide up as well. That's driving a lot of our growth. Yes.
I mean, I would just say the marketing efficiencies alone are driving 100 of 1,000,000 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. And I'll 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, 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.
So 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. And then just shifting gears to another topic for Jeff though. The Global Network Services business has had some headwinds over the last year from changes regulatory changes in Australia and Europe. Can you remind us when we expect to lap those this year? Or maybe it's for Anre?
Well, I'll make a financial comment and then Anre, 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 G and S business in response to regulation. The Australia shutdown of the G and S business happened in a more compressed time frame. But you're probably into 2020 before the impact of that has completely gone out of the numbers you all see, which are the G and S billings that we report each quarter. The only other point I'd make is that the GNS P and 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.
And so 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 you, 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, but probably down for the last 20%, right? And then it will take maybe 6 to 12 months for that to be lapped completely. So 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%.
And we see that continuing and growing as we get to the 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. But 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.
And 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 Guggenheim. On you guys are highlighting a number of partnerships today. And I was wondering if we could just focus on Amazon. Steve, have you sort of given any thoughts like the longer term strategy or build out for a partnership like that?
And I think what's interesting is the product that you launched is off to a strong start. Amazon is in the U. S, but they're also in 13 countries globally. You guys have a very significant global footprint. So just wondering 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, then maybe just talk about marketplaces like Amazon and what you're thinking is as you kind of think about the longer term for some of those more strategic initiatives of yours?
Yes. So I think when you when we think about sort of cobrand opportunities, the first thing we think about is how do we leverage our strengths, right? And 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. And 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. And 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 Ana talked about some of the payment capabilities, things like merchant fencing, 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.
And 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. Your some of your merchant acquiring partnerships that you're naming Square, Stripe, Adyen, they're some of the fastest growth acquirers in the world. If
you kind
of 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 embarking on? Or is it an acceptance strategy with the merchants? I'm just curious what your thoughts are.
I mean, they you could throw Stripe, Adyen, Square, you throw PayPal was probably the first one that we had. Their total acceptance plays for us. And 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. So 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. You saw that happen with PayPal. So but at the moment, they provide a tremendous amount of coverage leverage for us.
Vincent Caintic with Stephens. So two questions. First, going back to the 2019 guidance, so really appreciate the color on that and the revenue guide and the EBS guide. I guess, when you think about, say, going through that stressed economic macroeconomic situation, is that a scenario where regardless you're able to achieve at 8% to 10% year over year revenue growth, but you might have to so the investments that you make are rewards or something in order to get to that 8% to 10%. So I'm just kind of wanting to understand the EPS moves as a result of that.
And then second point, so I thought it was interesting the merchant offers or 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 merchant engagement has been on that, maybe if there's any more rollouts, any other opportunities there? Let me answer the second one first, and then I'll kick the second the first one.
Let me answer the second one first and then I'll kick the second the first one to Jeff and Anre, if you want to provide any color, but 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. I mean, that's what we try and do. Whether it's fully funded, co funded, half funded, we work out between ourselves what's the right way to access the customers. And 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.
And why does that happen? Well, you look at Fine Hotels and Resorts. We have 2 terrific co brand relationships with Marriott and with Hilton. But if you look at the breadth of our Fine Hotels and Resorts program, it's enormous. And it's not just in the U.
S, it's on a global basis. And what happens is, we're able to put together great offers for our joint customers. And those are customers that the hotels desperately want to stay in there and 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. And we'll continue to do that.
And 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. And our ability to have these great relationships with merchants and being able to access our card base, it's hard to replicate. I mean, people try and replicate it and come up with programs that are not quite as scale as ours, but we're going to continue to push that because we think it adds value on both fronts. I don't know, Andre, if you have anything else to add
on that. What I would say with Amex offers, leverage is the benefit of our integrated payments platform. If you think about what another financial institution or issuer would be able to do is 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 spin information on the issuing side and help merchant partners target certain segments that they may not be able to find on their own. And that's really helpful to them.
And then we can make it available to them in a digital platform right there on someone's phone, and they can see the results. And it only gets loaded on if someone has an intention to use it. And 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, by digitally engaged customers actually spend more and they're better customers for us. So 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, and we're taking it to many markets around the world. It's a global capability, and 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 of FX adjusted growth to 8% to 10 percent. Now 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. But if you have a financial crisis that looks like the financial crisis of 2,009, you should not expect 8% to 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.
Okay. Well, I'd say it was almost an hour. That's okay. It's lunchtime, too, so people have to get to lunch. But anyway, we want to thank you for spending some time with us today and coming out on such a beautiful day.
And thanks for your interest in American Express, taking time out of your day and have a great day. Thank you very much everybody.