NEW YORK (
has launched a digital payment and commerce platform called Serve, which many analysts see as a positive for the credit card's company's earnings going forward.
"In our view, this is a bold undertaking for AXP that has the potential to address the company's key strategic weakness- debit," said
analyst Chris Brendler." Serve could also help extend Amex's reach beyond just the high end consumer as Serve is clearly targeting the mass market."
Serve has been in the works since American Express acquired former AOL founder Steve Case's
in January of 2010 for $300 million. The "e-wallet," payment system allows consumers to transact through prepaid funding and is designed to be used on
iOS devices, Androids and through
For the first six months, American Express is waiving fees for Serve, but after that the company will collect 30 cents each time the card is 'loaded' with cash and a 2.9 percent fee for each transaction. ATM transactions will cost $2 each, said American Express. American Express is launching the platform to generate new revenue, but did not say how much they hope to generate.
The announcement is part of a wave of efforts by lenders, banks and credit card companies to provide mobile payment services as the popularity of the smartphone among consumers increases, consumers are using less credit and regulatory changes strip lenders of revenue they were getting from debit.
Serve will compete with other online payment systems such as
mobile payment platform with
. In addition,
Bank of America
recently partnered with
Research In Motion
to trial mobile payments and
, which acquired
for $190 million in February, to test a mobile payment pilot.
Michael Taiano and Stifel Nicolaus' Brendler both said that American Express may make more acquisitions in mobile payments, but would not specify potential targets. Morgan Keegan's Robert Dodd told
back in August
American Express said during a conference call for Serve that they would be expanding the Serve program into markets overseas and would be adding more technologies to the products.
--Written by Maria Woehr in New York.
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