American Express Launches Serve and Positions Itself on Online P2P Payment
- In the United States, American Express launches Serve, a payment platform designed not only for online and mobile P2P funds transfers, but also for e-purchases. This platform can be used by American Express customers as well as by non customers; it is proposed through a dedicated website, iPhone or Android mobile applications and through a specially crafted Facebook application.
- The user creates an account, identified by his e-mail address, and links one or several of his bank accounts. He can also benefit from a prepaid card dedicated to his Serve account, to be used in points of sales, at American Express network ATMs and on e-commerce websites accepting this option.
- He can finally create up to four sub-accounts and set them up according to specific purchase profiles: available amounts, limits by period, alerts, etc.
- The reloading price is set to 2.90% of the amount plus an additional 30 cents per transaction and two dollars for cash withdrawal. All other transactions are free. Merchants accepting this American Express card will benefit from charge reductions for purchases made with a "Serve" card.
- Serve is based on the model of Revolution Money, start up bought by American Express end 2009 in view of developing reloadable prepaid products, proposing alternative payment solutions and elaborating new mobile services. A Beta version of Revolution Money, designed to bypass Visa and MasterCard networks, was launched in 2007; it proposes lower card commission for merchants.
- With Serve, American Express offers a range of online and mobile payment services to its cardholders, very similar to those proposed by PayPal (additional accounts with PayPal Student Account for instance). American Express then positions itself on the same grounds as PayPal and international card payment networks in relying on aggressive rates. American Express advantageously benefits from its acceptance network, in convenience and online stores, to challenge PayPal.
- This platform should also allow them to capture other customers than its core + CSP traditional targets. American Express has been trying to attract young customers for several months (ZYNC, PASS and Quarterlife Project cards). They opted for a new distribution strategy and intend to assert the loyalty of new customers; the viral dimension of P2P transactions could then become a means to conquer new customer.