Watch out, PayPal! Ebay’s popular online payment processing system is about to get a fierce competitor with a big name behind it—American Express.
AmEx announced today the launch of its own digital payment platform called Serve, which will enable consumers to make payments online and transfer funds to other individuals as well. Retailers in the U.S. that already accept American Express will be able to accept Serve payments right away.
“Serve is a new type of payment platform that isn’t tied to a single card or mobile operating system,” said Dan Schulman, AmEx’s group president of enterprise growth. “From day one it brings tremendous assets to the alternative payments space and gives consumers an option to shop online and offline at merchants who accept American Express.”
AmEx crafted Serve mainly to attract those consumers who usually eschew credit cards for cash and/or debit cards instead when making purchases or remitting payments.
It will work similarly to PayPal in that a user will be able to add funds to his or her Serve account from their checking or savings accounts, debit cards and credit cards for use on purchases from any retailer that currently accepts American Express. Enrollees can also get an AmEx-issued payment card for purchases in brick and mortar stars and cash withdrawals as well.
Also like PayPal, users will have the option to transfer money to other Serve users as well.
All accounts will be accessible online at Serve.com but also through both Apple and Android mobile phone applications and Facebook as well, meaning AmEx could have quite a reach with the new service almost immediately. What’s more, an individual Serve account will be able to support multiple sub-accounts so, for example, parents can maintain and control a Serve account for their kids.
Fees for the new service seem fairly reasonable. Merchants will have to pay an undisclosed transaction fee to participate but American Express says the fee will still be less than what it charges for a credit card transaction. Users will pay 2.9 percent plus $0.30 every time they add money to their account but are entitled to one free ATM withdrawal per month as well. And while Serve will initially only be available in the U.S., AmEx does have plans to expand internationally sometime next year.
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