Can American Express Thrive in the BNPL Era or Just Survive?

American Express Company AXP, also known as AmEx and well-known for its premium cards and loyalty programs, is navigating the new era of Buy Now Pay Later (BNPL). While BNPL has transformed consumers’ mindset regarding their spending by offering short-term flexibility that challenges traditional credit methods, the company has opted not to resist the trend but to adapt it to fit in its own model.

With its ‘Plan It’ feature, AmEx gives cardholders the flexibility to break down their purchases of $100 or above into manageable monthly payments, along with its continued feature of earning rewards and benefits from the brand’s trusted ecosystem. The company redefined it by integrating BNPL services into the AmEx card experience, which provides installment options with its current services. AXP makes sure that customers see this flexibility as a natural extension of their card benefits, rather than something entirely separate.

It is also collaborating with companies to stay visible in the digital shopping age. In this process, AXP is expanding its footprint in the BNPL space and demonstrating that legacy financial players can innovate on their terms while driving growth and retaining customers solidly in their ecosystem.

All these results in a massive 98% spend retention. Its network volume rose 7% year over year in the second quarter of 2025. Also, its closed-loop business model will likely enable it to generate more interest income from the growing BNPL trend. These suggest that American Express is clearly positioning itself not only to withstand the BNPL disruption but also to lead it.

How Are Competitors Faring?

Some of AXP’s competitors in the BNPL space are PayPal Holdings, Inc. PYPL and Affirm Holdings, Inc. AFRM.

PayPal offers features like Pay in 4 and Pay monthly, which continue to strengthen its BNPL presence. In the second quarter of 2025, PayPal’s total payment volume grew 6% year over year. Its active account rose 2% year over year to 438 million in the same period.

Affirm is building a solid niche in BNPL with a primary focus on higher-ticket purchases, along with low-ticket purchases. In the third quarter of fiscal 2025, Affirm’s active consumers increased 23% year over year, along with 36% year-over-year growth in its gross merchandise volume.

American Express’ Price Performance, Valuation & Estimates

Shares of AXP have declined 2.9% in the year-to-date period against the industry’s growth of 3.8%.

From a valuation standpoint, American Express trades at a forward price-to-earnings ratio of 18.4X, down from the industry average of 20.6. AXP carries a Value Score of B.

The Zacks Consensus Estimate for American Express’ 2025 earnings is pegged at $15.26 per share, implying a 14.3% jump from the year-ago period.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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