American Express Serves Paypal and Visa | CreditShout

American Express Serves Paypal and Visa

By Dan Rafter / April 11, 2011

THIS PAGE MAY CONTAIN AFFILIATE LINKS. MEANING WE RECEIVE COMMISSIONS FOR PURCHASES MADE THROUGH THOSE LINKS, AT NO COST TO YOU. PLEASE READ OUR DISCLOSURE FOR MORE INFO.

Does American Express have anything against PayPal?

Maybe not. But you'd be hard pressed to prove it after American Express launched its new Serve feature in late March.

Serve is a type of online bank account that consumers can fund with dollars from their bank accounts, credit cards or debit cards. In other words, if you have $1,000 in your bank account, you can use that money to create an online Serve account with $1,000.

You can then use that Serve account to buy goods and services online. You can also use a plastic Serve card as you would any refillable gift card: You can stock it with money from your Serve account and then use the card to purchase merchandise, food and services at any location that already accepts American Express cards.

Watch Out PayPal

It looks as if American Express has PayPal squarely in its sights with this new feature. As you read about how Serve works, you might notice that it bears an uncanny similarty to how PayPal works.

PayPal, though, probably shouldn't be quaking just yet. Yes, American Express has plenty of economic muscle behind it. But as of yet, most consumers have no idea what Serve is. Plenty of them, though, know exactly how convenient it is to use PayPal to purchase services online and to pay many of the vendors with which they do business.

It will take American Express, no matter how powerful it is, some time to catch up to PayPal's popularity.

Of course, this doesn't mean that Serve won't get there eventually. PayPal fans shouldn't worry, though, about American Express driving the company out of business instantly.

How It Works

Serve isn't always free. How would American Express make any money that way? When you deposit money into your Serve account, you'll have to pay 2.9 percent of the total that you deposit plus 30 cents every time you make a deposit.

If you deposit cash or use your debit card to put funds into your account, that 2.9 percent figure disappear and is replaced by 0 percent. In other words, you'll only be charged if you deposit money into your account throughby using your credit cards.

You'll pay $2 every time you use your Serve card to take money out through an ATM. The first time you do this every month, though, this $2 fee is waived. The card charges you nothing to complete peer-to-peer transactions.

What does the Serve card mean to the credit card industry? That's hard to predict. But it's a safe bet to assume that American Express will spare no dollar in promoting its newest product.

The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone.Additionally, the opinions of the commenters are not necessarily the opinions of this site

Leave a comment:


shares