American Express dives into mobile payments with Serve

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney) -- American Express is diving into the e-wallet space with Serve, a service that lets customers transfer money to others online and make payments with their mobile phones.

In its announcement Monday, AmEx said Serve is aimed at customers who use cash, checks and debit cards, rather than the company's traditional credit card users.

Serve accounts will be available immediately in the U.S. and are expected to launch internationally over the coming year.

Mobile payments are a new direction for AmEx as it tries to get a toehold in a rapidly growing market. Research firm Generator Research expects mobile payments to reach $633 billion annually by 2014, with 490 million customers using them.

AmEx's Serve is meant to capture some of that burgeoning market. It also puts the bank squarely in competition with e-payment king PayPal. Serve grew out of technology AmEx picked up last year through its $300 million acquisition of Revolution Money, a PayPal rival that focused on person-to-person payments.

Serve accounts can be funded with a bank account, debit card, credit card or from funds transferred by another user. The accounts can be accessed through iPhone and Android apps, or through Serve.com and Facebook.

In addition, each user will be given a reloadable prepaid card linked to their Serve account that can be used at any merchant or ATM that accepts AmEx (AXP, Fortune 500).

Users can set up sub-accounts for children or family members and control where the funds are used.

AmEx is waiving Serve account fees for the next six months, but after that, loading money will cost 2.9% of the transaction amount plus 30 cents per load. However, Serve won't charge a fee for loading through cash, debit or ACH (automated clearing house) transactions.

ATM cash withdrawals will cost $2, though users get one free withdrawal per month. Setting up accounts and sub-accounts is free, as are user-to-user transactions.

Meanwhile, Google (GOOG, Fortune 500) is planning its own foray into the digital payment world. On Monday, the Wall Street Journal reported that Google is partnering with MasterCard (MA, Fortune 500) and Citigroup (C, Fortune 500) to embed payment technology in Android smartphones. The goal is to allow customers make payments at stores by waving their phones in front of a reader device at the checkout.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play

Search for Jobs

Index Last Change % Change
Dow 18,288.63 155.93 0.86%
Nasdaq 5,008.10 44.57 0.90%
S&P 500 2,117.39 12.89 0.61%
Treasuries 2.08 0.08 4.10%
Data as of 8:37pm ET
Company Price Change % Change
Apple Inc 129.09 0.63 0.49%
Cisco Systems Inc 30.19 0.68 2.30%
Bank of America Corp... 16.01 0.20 1.27%
Microsoft Corp 43.88 0.03 0.07%
Intel Corp 34.06 0.81 2.44%
Data as of 4:00pm ET
Sponsors

Sections

Guinness owner says inclusion of an LGBT group in this year's parade is reason to resume its sponsorship, though some gay rights groups are still protesting the parade's policies. More

Remember Pets.com? The Nasdaq is roaring back towards its all-time high. Here are some of the biggest dot-com busts from the last time the Nasdaq topped 5,000. More

Last week, the House of Representatives passed a bill that would expand benefits offered by the college savings plans to include coverage of expenses like computers and Internet access, among other things. And there is bipartisan support for it in the Senate, too. More