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 15,650.60 -264.14 -1.66%
Nasdaq 4,264.25 -19.34 -0.45%
S&P 500 1,828.06 -23.80 -1.29%
Treasuries 1.64 -0.06 -3.70%
Data as of 3:11pm ET
Company Price Change % Change
Bank of America Corp... 11.24 -0.74 -6.18%
Cisco Systems Inc 24.91 2.40 10.66%
General Electric Co 27.47 -0.83 -2.93%
Chesapeake Energy Co... 1.78 0.08 4.71%
Apple Inc 93.94 -0.33 -0.35%
Data as of 2:56pm ET
Sponsors

Sections

Boeing's stock fell by as much as 12% after Bloomberg reported the SEC is investigating the company's accounting practices. More

The S&P 500 has lost 11% in the first six weeks of the year and the Nasdaq is near bear market territory. But the U.S. economy is not in a crisis. More

Twitter's stock is sinking fast after the company reported that it lost customers in the fourth quarter of 2015. More

Bloom Technologies impresses Richard Branson to win the Extreme Tech Challenge startup contest. More

GOP presidential candidate Marco Rubio wants some radical changes to the tax code. But the numbers don't add up, according to a new analysis. More