American Express Hops On The Hyperledger Bus
American Express has joined IBM, Intel, JPMorgan, 11 other Premier members, six Associate members, and 88 Regular members as a contributor to the Hyperledger project, an open-source collaborative effort to advance blockchain technology across several different industries.
American Express was founded in 1850 and is a multinational financial services corporation headquartered in New York City. They are one of the 30 components of the Dow Jones Industrial Average, and Amex cards account for approximately 24 percent of the total dollar volume of credit card transactions in the United States. However, American Express reported 2016 fourth-quarter results that showed a decline in both its top and bottom lines, down eight percent from the same period in the previous year.
Marc Gordon, Executive Vice President & Chief Information Officer at American Express expressed his ardor, “We’re excited to join Hyperledger, as we’re looking to take full advantage of blockchain to deliver new and innovative products for our customers and partners, while transforming existing business processes and applications. As a Premier member of the project, we’re expecting our expertise and global reach to help advance this open-source blockchain ecosystem.”
In December 2016, eight other companies joined Hyperledger including Swisscom, Sovrin Foundation, and Factom. Hyperledger is an open-source project which seeks to adapt permissioned and permissionless blockchain technologies to be used in finance, IoT, supply chain, banking, healthcare, and several other fields. Amex’s first step into a blockchain consortium follows from experimentation with the technology within their company.
“It’s always encouraging to see large, global organizations like American Express join Hyperledger,” stated Brian Behlendorf, the Executive Director for Hyperledger. “As the project continues to grow and take shape, I believe support from leading organizations and their expertise will drive successful pilots of Hyperledger blockchain technology into production later this year. The aim is to then begin to repeatedly build new systems for this emerging industry and its various use cases and applications.”
In October 2016, Visa announced it was working together with Chain on “Visa B2B Connect,” a fast, secure, and transparent global bank to bank blockchain payments platform for corporate clients operating on a permissioned blockchain. Mastercard also announced the same month that it would be testing blockchain solutions aimed at payments and trade finance.
With Mastercard and Visa showing strong growth in the values of their company shares since 2013, American Express decoupled from their competitors toward the end of 2014, illustrated below. A long-term bet on blockchain technology from American Express is likely to be part of a move to capture a larger portion of the payments sector and to secure operating revenue as the industry evolves in response to new developments.
American Express sees blockchain as a game-changing technology in banking, particularly digital payments. “We want to get closer to blockchain technology and further imagine its possibilities and use cases,” said senior vice president of technology at American Express, Sastry Durvasula. Welcome to the club, AmEx.