American Express has just debuted a digital payment and commerce service that makes it possible to use Android-based devices and Apple iPhones for person-to-person online payments. Visa announced a similar personal payment product in the U.S. on March 16.
Analysts say the moves by Visa and American Express are clearly aimed at challenging PayPal in the personal payments business.
The new Amex service, named Serve, allows consumers and small businesses to make purchases and person-to-person payments on iOS- and Android-based devices. Serve accounts are also accessible on personal computers through Facebook and at Serve.com.
Serve also allows users to create and manage sub-accounts for friends and family members.
The new service is based on technology that Amex obtained through its $300 million acquisition last year of Revolution Money.
Visa on March 16 said that it will rely on internal network enhancements and agreements with CashEdge and Fiserv to bring its personal payment system to the U.S. by the end of June. CashEdge and Fiserv will access VisaNet, which is Visa’s global payments processing network.
Separately, Visa officials at the International CTIA Wireless show last week said they are in the midst of four pilot programs in New York and San Francisco to test Near Field Communications (NFC) technology on smartphones, to assess the feasibility of using smartphones to make purchases at NFC-ready terminals. Those trials are being conducted with Bank of America, US Bank, Chase and Wells Fargo. No rollout date for the service is being announced, said Elvira Swanson, a Visa spokeswoman.
Amex also plans to waive one consumer fee for the next six months during the ramp-up, he said. Putting money into a Serve account will normally carry a fee of 2.9% plus 30 cents per load-in, but during the first six months that fee will be waived for cash, debit and Automated Clearing House payments. Otherwise, the fee for ATM cash withdrawals will be $2 — though there will be no fee for the first one each month.
The Serve program calls for consumers to set up online accounts through a smartphone app or at Serve.com. Once a user establishes an account, he can transfer funds to it directly from bank accounts or other Serve accounts or via debit or credit cards.
Customers can use Serve accounts to send money to friends, to receive money from friends, to pay bills or to make purchases online. In addition to having the ability to make payments using smartphones, customers will issued reloadable prepaid Serve cards linked to their Serve accounts that can be used at any retail outlet or ATM that accepts Amex cards.