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The Way To Success:
Just Charge It

Some of y ou just needed to

American Express CEO Harvey Golub discusses the
future of paper, plastic and electronic money.

know we were there.

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LI' 2

hen Harvey Golub be-
came chairman and
chief executive officer of
American Express Co.,
few people expected him to trans-
form it into an international ser-
vice giant.
But in the less then four years
since he took its reigns, the 57-
year-old Golub has managed to
turn American Express from a
charge-card company into a glob-
al provider of finance and travel
services.
Utilizing his previous experi-
ences as CEO of American Ex-
press Financial Advisors and as
a senior partner with consultan-
cy empire McKinsey & Co., Mr.
Golub ultimately sold assets, cut
costs, moved the company into the
co-branding area and significantly
broadened its merchant base.
Geographically, Mr. Golub
expanded operations into
dozens of new destinations,
from Brazil to Israel. Since his
appointment, the com-
pany reported a 37
percent rise in annu-
al sales, which cur-
rently total some
$16 billion. The
company,
which
employs
about 27,000 people,
completed the first
half of 1996 with
net earnings of
$849 million.
While in
Tel Aviv
for a
meeting
with his
-.......„,_,_
' ,:::,
local dis-
Bank
tributor,
Hapoalim, Mr. Golub took time
to discuss his company's far-flung
business.
How do you cope with ever
accelerating competition in
the global credit-card mar-
ket? Is there a need to be
more aggressive?
"I don't know if we will be more
aggressive. When competitors be-
come active, consumers auto-
matically get greater value at
lower prices. So competition is
good for the consumer, and if it is
good for the consumer, then it is
good for business.
"Our task will simply be to de-
termine how we either come out
first with new products or re-
spond quickly with better fea-
tures."
Over the past few decades,

plastic money has become
commonplace and cheap. Is
it now a commodity?
"I don't think so. I am not sure
that I know [the difference]. Corn-
modities to me are one thing, like
crude oil, and you can measure
the viscosity of crude oil and the
octane value of crude oil.
"Cards are different. They are
a physical manifestation of a cus-
tomer relationship. It is not the
card itself that is different; it is
what is providing the card in
terms of its suitability and service
and its brand association.
"It is sort of like dresses. You
can buy a cheap dress in the Unit-
ed States for $20-$30. It might not
last long, but at least you can buy
one. Or you can buy a Coco
Chanel for $2,000.
`There are lots of dress-
es and one can say they c'
are a commodity while
they are clearly en-
tirely different.
"If you consider
American Express
as a commodity
than you are prob-
ably not in our cus-
tomer group.
If you travel
a lot, it
would not be a
commodity. If you
went into a hotel in
Montreal and found
you couldn't get
your charge au-
thorized with a
bank card, but
you could
with Amer-
ican Ex-
press, it
would not
be a commodity.
If you had a disagreement with a
merchant and had to get it re-
solved
ty would not be a corn-

Where do you think credit
cards are headed; do you per-
sonally use any form of mon-
ey other than plastic?
"I use cash. Sometimes I use
travelers checks, sometimes I use
personal checks and sometimes I
barter. I barter with my 11-year-
old son. I'll help you with your
homework, and you clean up your
room.
"But I think the credit-card
market is going to get a continu-
ously larger share of the sum of
cash and checks. Debit cards and
credit cards will continue to grow
relative to cash and travelers

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