NAB in joint venture talks with Amex

National Australia Bank and American Express have reportedly launched talks aimed at exploring opportunities for a joint venture payment card business. Neither company would confirm that talks are taking place but both said they're actively looking at a range of possible growth plans.

While Amex has struggled to get banks to issue its products, a JV would help NAB improve the profitability of its “transactor” segment – customers paying off balances in full and therefore paying no interest. Amex's core charge card product is structured so as not to rely on interest revenue, but rather on higher annual and merchant fees. The deal with NAB would benefit Amex by opening up a new customer base and increasing the use of its network. Depending on how the deal was structured, Amex could also benefit from NAB's second-top position in the merchant side of the credit card market, in which Amex has a negligible presence.

NAB issues 12 per cent of Australia's 16 million cards, putting it fourth behind the Commonwealth Bank, the ANZ and GE Capital. Amex had about 6 per cent of the market as at the end of 2001.

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