Inflation’s Silver Lining: Amex’s CFO Says Rising Prices Can Boost Credit Card Revenues

American Express stands to benefit from the effects of inflation, according to comments the company’s Chief Financial Officer, Christophe Le Caillec, made in a recent presentation. Le Caillec’s remarks underscore how slight shifts in economic conditions can impact a credit card company’s bottom line.

Rising rates of inflation can frustrate businesses and consumers who are trying to keep their expenses in check. But for a credit card issuer that receives interchange fees based on the price of a transaction, a modest increase in inflation can result in higher revenue per swipe, even if the number of transactions stays the same. 

“It provides a bit of support for revenue growth, and our expenses don’t travel at the same speed,” Le Caillec said, according to a Payments Dive report. 

Speaking at the recent Morgan Stanley U.S. Financials Conference held in New York, Le Caillec touched on inflation, and its effects on his company’s financial outlook. The conference explored critical themes molding the financial industry, including artificial intelligence, consumer spending, and changes on the deregulation front.

But inflation can have both positive and negative effects on the credit card industry. A rapid rise in inflation rates could tip the economy into a recession.

And Le Caillec explained that a recession would likely cause consumers to reduce their overall spending, which would damage the finances of credit card companies like American Express.

“We’re in a good place, as long as inflation doesn’t translate into unemployment” Le Caillec said.

In May, the annual inflation rate rose to 2.4% in the U.S. The May figures represent the first increase in the inflation rate in four months. Though inflation rose slightly in May, it’s still much lower at 2.4% than it was earlier in the 2020s.

President Donald Trump introduced tariffs earlier this year that threatened to raise prices for consumers and businesses. Tariff-induced price increases could also open the door for credit card issuers to receive more interchange fees. 

Payment processors can benefit from increased payment volume when prices rise.

Other participants in the credit card ecosystem may also benefit from rising prices. Fiserv is one of the largest payment processors in the U.S. The company’s Chief Financial Officer, Bob Hau, spoke at the recent JPMorgan Global Technology, Media and Communications Conference about inflation’s impact on Fiserv’s finances.

Hau’s comments struck the same chord as those Le Caillec shared at the U.S. Financials Conference. Namely, small price increases can mean more business for his company.

“A little bit of inflation is actually a good thing,” Hau said, as reported by Payments Dive. “If it’s too much, that has a macro impact.”