Capital One and Discover: A Bank With Its Own Closed LoopNarrow moat

American Express (AXP) — moat facet

American Express is no longer the only card company in America that owns its own network, and the new owner already has the cardholders.

For decades American Express was set apart from its card-issuing rivals by owning a network. That is no longer true of every rival. Amex's 2025 annual report lists its network competitors as "Visa, China UnionPay, Mastercard, JCB, Discover and Diners Club International (the last two of which are owned by Capital One)"1.

Volume on the Amex network, 2025 ($bn)1,897.0Network volumes1,669.8Proprietary billed business227.2Partner-issued and otherAmerican Express Form 10-K FY2025; difference calculated
Most volume on the loop is on Amex-issued cards.

That is a different kind of rival from the banks on the premium-card page. A bank that owns a network can do some of what Amex does: keep the merchant fee on its own cards, see both ends of a transaction, and decide its own rules.

The Mastercard page in this app, American Express and Discover: The Closed Loops, puts the two closed networks together as the part of the U.S. market the open networks do not control, and notes that a closed loop has to find its own cardholders and carry their credit risk. A card bank already has the cardholders and already carries the credit.

What the rival lacks is Amex's merchant position and its premium brand. Amex describes a business model built on spending that is "higher on average on a per-card basis versus our network competitors"2, and its merchant contracts were signed for a premium card base.

Amex's own network is growing. Network volumes were $1,265.7 billion in 20193, $1,897.0 billion in 20254 and $516.8 billion in the second quarter of 20265. Acceptance passed 190 million merchant locations in September 20266.

Amex's filing places the change in a wider field. Beyond card networks it competes with "merchant acquirers, processors, payment facilitators and web- and mobile-based payment platforms"7, a list that includes companies with no card at all. A second closed loop owned by a bank is one more rival that can control both ends of a transaction.

Nothing in Amex's filings quantifies the effect of this change, and it is too recent to show. The number that would reveal it is Amex's own network volume growth; if it slowed toward the pace of the U.S. four-network market, 6.4% in 20258, while a rival closed loop gained volume, the structural advantage would have become shared.

Moat trajectory: Narrowing

Discover and Diners Club now owned by Capital One; Amex network volumes $1,897.0bn in 2025.

The number that tests this moat
Reported
Network volumes, latest quarter
$516.8bn (Q2 2026)

Growth of the closed loop against a rival closed loop; a slowdown toward the U.S. market pace would mean the advantage was being shared.

Source: American Express Q2 2026 statistical supplement ↗
References
  1. ReportedAmex's 2025 annual report lists its network competitors as "Visa, China UnionPay, Mastercard, JCB, Discover and Diners Club International (the last two of which are owned by Capital One)".
    American Express Form 10-K for fiscal 2025 - Item 1A risk factors, competition and regulation. — FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedAmex describes a business model built on spending that is "higher on average on a per-card basis versus our network competitors", and its merchant contracts were signed for a premium card base.
    American Express Form 10-K for fiscal 2025 - Item 1A risk factors, competition and regulation. — FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedNetwork volumes were $1,265.7 billion in 2019, $1,897.0 billion in 2025 and $516.8 billion in the second quarter of 2026.
    American Express Form 10-K for fiscal 2021 - billed business 2019-2021, average discount rate, net write-off rates, the 2021 reserve release and Delta shares. — FY2021 · publ. February 2022 · source ↗
  4. ReportedNetwork volumes were $1,265.7 billion in 2019, $1,897.0 billion in 2025 and $516.8 billion in the second quarter of 2026.
    American Express Form 10-K for fiscal 2025 - card metrics: billed business, spending per card, cards-in-force, fees per card and network volumes. — FY2025 · publ. 6 February 2026 · source ↗
  5. ReportedNetwork volumes were $1,265.7 billion in 2019, $1,897.0 billion in 2025 and $516.8 billion in the second quarter of 2026.
    American Express second-quarter 2026 statistical supplement, Form 8-K exhibit 99.2 - segment results, card metrics, capital and credit - consolidated results, card metrics, capital and credit. — Q2 2026 · publ. 24 July 2026 · source ↗
  6. ReportedAcceptance passed 190 million merchant locations in September 2026.
    American Express release via Business Wire, 28 September 2026 - accepted at more than 190 million merchant locations; locations outside the United States more than doubled in four years. — September 2026 · publ. 28 September 2026 · source ↗
  7. ReportedBeyond card networks it competes with "merchant acquirers, processors, payment facilitators and web- and mobile-based payment platforms", a list that includes companies with no card at all.
    American Express Form 10-K for fiscal 2025 - Item 1A risk factors, competition and regulation. — FY2025 · publ. 6 February 2026 · source ↗
  8. Third-party estimateThe number that would reveal it is Amex's own network volume growth; if it slowed toward the pace of the U.S. four-network market, 6.4% in 2025, while a rival closed loop gained volume, the structural advantage would have become shared.
    Nilson Report, Global Brand Cards in the US - 2025: purchase volume of the four general-purpose networks. — 2025 · publ. 2026 · source ↗
Sources
Generated September 28, 2026