Paypal now has competition as Visa and American Express announce their own personal payment systems
A digital personal payment system has been announced by American Express following closely in Visa’s footsteps and it is called Serve. This is also a commerce platform as it enables customers to make person-to-person payments and purchases online through mobile phones or through retail outlets where the American Express cards are accepted. Now MasterCard will also launch its own platform for personal payments very shortly.
As per estimates American Express gets around 73% (Trefisprice estimate $49.61) through execution fees and card transactions and Visa gets around 29% (Trefisprice estimate $85.03) from the transaction fees.
Serve is a new American Express account through which a consumer could do the funding using bank accounts, debit cards, or credit cards. Consumers could also use the money in the Serve account to make payments, online purchases, or to withdraw cash through ATM’s using the Serve Card.
Setting up a Serve account online is easy and customers can also set up sub accounts for their kids and spouses within a matter of minutes. This makes it an attractive option, especially for parents who wish to monitor their children’s allowance. Serve will be accepted in places where AmEx cards are accepted and is hence a convenient option for AmEx customers.
After the acquisition of Revolution Money last year by American Express for about $300 million, it led to the integration of technology and Serve happened as a result of this. The need for a digital payment platform was recognized by card companies long ago as PayPal needed some competition with personal payments. This was also essential to tap the rise in demand in the mobile payment sector.
At the moment, PayPal is the leader in personal payments as there are more than 94 million accounts that are active. The fresh entrants such as Square and Venmo have also become quite popular and have helped in highlighting the growth prospects in this market. This has been a motivational factor for both American Express as well as Visa to seriously pursue theirdigital platforms. Serve has many similarities with PayPal and issues separate cards that can be used for bank transactions, credit card accounts, while making purchases, and for ATM withdrawals.
One big difference between Serve and PayPal – with Serve credit cards can be used to fund Serve accounts for a nominal fee, but with PayPal you could pay for some items that are linked to the credit card but cannot transfer funds from credit card to PayPal accounts.
