American Express Mission Accomplished: Divulging Its Role in the New Payments Landscape

by Mercator Advisory Group 0

The American Express payments strategy is slowly being divulged. Responding to recent comments that the American Express Prepaid Card and the American Express Serve products were almost identical, the company explained the difference:

“Serve “is really just a migration path,” said Dan Schulman, American Express’ group president for enterprise growth. “It’s definitely not a digital prepaid product. That’s for sure.”
He said some are not thinking about Serve in the right context. It’s a platform, not a card, and it is designed to be adaptable to customer demands and regulatory mandates, he said.

“Serve will have numerous applications and products,” said Schulman. The current form is “release 1.0, with release 1.1 coming up in the next several weeks. In this next release you can have the software widget that will allow any consumer to become a seller as well as a buyer of things.”

Charitable donations and couponing functions are also in the works, he said.”

This differentiation was also clearly articulated in an April article published in Mobile Commerce Daily (http://www.mobilecommercedaily.com/2011/04/15/american-express-serve-to-feature-new-mobile-checkout-service ) that described an interview with Dan Schulman regarding the Amex investment and partnership with Payfone:

“ ’AmEx is approaching our push into digital commerce and payments in a very different way,’ said Dan Schulman, group president of enterprise growth at American Express, New York. ‘We realize we can’t do it alone and we can’t build everything ourselves.

We are looking to partner, invest and, in some cases, acquire talent within the ecosystem,’ he said. ‘Our relationship with Payfone helps us to further enhance our Serve platform and will rapidly increase our speed to market into international.’ ”

The Mobile Commerce Daily article went on to describe the value of the Payfone solution:

‘“Consumers using the platform powered by Serve and Payfone will be able to link their mobile numbers to a variety of payment methods, including their prepaid or postpaid wireless carrier account or their Serve account.

Payfone takes advantage of the existing assets of carriers such as the global SS7 signaling network for directly connected payment authorization and processing.

‘American Express is partnering with Payfone because they are well positioned to lead the way in mobile commerce – particularly given they are leveraging an existing infrastructure to provide seamless and secure payments and authorization,’ Mr. Schulman said.

‘By integrating Serve—our flexible and funding-agnostic platform—with Payfone’s capabilities, we believe we can reach new demographics, particularly in emerging markets, and bring new types of merchants and transactions onto our network,’ he said.”

The final piece of new news is that in the next few weeks, American Express will introduce the ability for consumers to buy and sell through the Serve platform and announce that couponing and charitable donations are also on the agenda:

“”Serve will have numerous applications and products,” said Schulman. The current form is “release 1.0, with release 1.1 coming up in the next several weeks. In this next release you can have the software widget that will allow any consumer to become a seller as well as a buyer of things.”

Charitable donations and couponing functions are also in the works, he said.”

In short, American Express is clearly carving out a new role itself in the payments arena.

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