Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 16,643.01 -11.76 -0.07%
Nasdaq 4,828.33 15.62 0.32%
S&P 500 1,988.87 1.21 0.06%
Treasuries 2.19 0.02 0.83%
Data as of 4:16pm ET
Company Price Change % Change
Freeport-McMoRan Inc... 10.50 0.31 3.04%
Bank of America Corp... 16.36 -0.08 -0.49%
Apple Inc 113.29 0.37 0.33%
Intel Corp 28.42 0.70 2.53%
Alcoa Inc 9.41 0.55 6.21%
Data as of Aug 28
Sponsors

Sections

Efforts to unionize low-wage employees of fast-food franchisees and outside contractors get lift from decision of NLRB. More

The U.S. economy has performed well this year. But there's lots of global gloom. Which will influence the Fed the most? More

You can continue to keep your two-year contract on Verizon, but the no-contract plans will save you money. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Looking for something good on Netflix? These entertaining films will help you learn more about finance and investing. More