What does SCHM mean in Business & Finance
What does SCHM stand for?
SCHM stands for "Schwab US Midcap ETF (American Stock Exchange [AMEX])"
How to abbreviate "Schwab US Midcap ETF (American Stock Exchange [AMEX])"?
"Schwab US Midcap ETF (American Stock Exchange [AMEX])" can be abbreviated as SCHM
What is the meaning of SCHM abbreviation?
The meaning of SCHM abbreviation is "Schwab US Midcap ETF (American Stock Exchange [AMEX])"
What does SCHM mean?
SCHM as abbreviation means "Schwab US Midcap ETF (American Stock Exchange [AMEX])"
AmEx's New Co-Branding Deal Is a Bigger Win Than It Seems
American Express (NYSE:AXP) recently announced that the company, in conjunction with Charles Schwab (NYSE:SCHW) , will create a pair of co-branded credit cards for the brokerage's clients. The only other detail provided about the deal was the (very approximate) launch date of early 2016. AmEx said more information about the two cards would be released closer to that time.
The announcement was made with little fanfare, and by AmEx alone. However, no matter what shape those products take, I believe the news is extremely positive for the card giant. Here's why.
AmEx really needs some victories these days.
Earlier this year its exclusive deal with Costco Worldwide (NASDAQ:COST) as the retailer's only accepted credit card and sole co-branding partner ended ignominiously. Although that was hardly a crippling blow for a company AmEx's size, it was painful: Costco accounted for roughly 20% of AmEx's worldwide loans and 10% of its cards in use. Ouch!
Around the same time, airline JetBlue similarly dropped AmEx as its co-branding partner (although the loss wasn't as acute; the airline's cardholder base is smaller, and AmEx didn't have exclusivity).
As a result, the card giant is in the investor doghouse. So far this year, its stock price is down by about 15%, whereas competitors Visa (NYSE:V) and MasterCard (NYSE:MA) have more or less broken even:
No single deal will change that negative perception unless it's the size of the expiring Costco partnership (and also, ideally, exclusive in both card of choice and co-branding partner). The chances of such an arrangement are slim to none.
Schwab is far from Costco-sized; in 2014 it had 9.4 million active accounts, compared to the retailer's 42 million-plus members. Nevertheless, the brokerage is exactly the type of co-branding teammate AmEx needs: a company with a deep pool of relatively wealthy and solvent clients.
This is the card giant's sweet spot -- the customer base it's best at catering to. With its "members only" appeal and its sprawling, attractive Membership Rewards program, it has a nice shot at landing at least some of those millions of Schwab customers.
News of the deal came barely a month after the Costco breakup. This bodes well for the future, as AmEx has obviously come out swinging in the fight for new business. And it's already landing blows.
Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends American Express, Bank of America, Costco Wholesale, MasterCard, and Visa, and owns shares of Bank of America, Costco Wholesale, MasterCard, and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.