American Express Co.
) (AmEx) announced the alliance of its full service reloadable
prepaid account - Serve - with
Wal-Mart Stores Inc.
). Operational since 2011, Serve is AmEx's next generation
technology that aids eCommerce through the products and services
that the mobile and card companies develop.
Accordingly, about 4,100 Walmart stores will now offer
American Express Serve digital wallet, which will be sold for a
nominal price of $1.95 and a monthly fee as low as $1.00. These
stores will also serve as stations for reloading cash in the
Serve accounts, overall adding more than 19,500 refill locations
across the US. Primarily participating stores include Walmart,
CVS Caremark Corp.
) and 7-ELEVEN, making AmEx Serve the largest reloading network
in the peer group, according to the Aite Group.
The latest alliance with Walmart extends AmEx's leadership
into the rapidly growing person-to-person (P2P) mobile payment
platform. While AmEx's Bluebird prepaid card for Walmart
customers are already showing positive results, the Serve
accounts will further expand the card payment processor's retail
clientele by adding over 70 million US residents, who are
underbanked and unbanked, to the company's network.
With the help of Serve, Walmart can now empower itself with an
inexpensive digital wallet, which will enable its customers to
refill mobile minutes, pay bills and purchase products and
services through their mobile phone accounts as well as withdraw
cash from ATMs freely. This kind of high-speed payment solution
not only connects AmEx with its merchants but also complies with
the next generation needs, particularly for those who are
side-lined from the conventional financial system.
We believe such efforts are helping AmEx improve its operating
leverage and reduce time-gap to reach out to its merchants. These
are also crucial for maintaining its competitive strength against
arch rivals, such as
Discover Financial Services
), in the card industry. Hence, such collaborations in the growth
markets and diversification into eCommerce are crucial for AmEx
in order to expand its revenue base.
While AmEx, Visa, MasterCard and Discover Financial carry a
Zacks Rank #3 (Hold), CVS Caremark bears a Zacks Rank #2 (Buy)
and Walmart holds a Zacks Rank #4 (Sell).
AMER EXPRESS CO (AXP): Free Stock Analysis
CVS CAREMARK CP (CVS): Free Stock Analysis
DISCOVER FIN SV (DFS): Free Stock Analysis
MASTERCARD INC (MA): Free Stock Analysis
VISA INC-A (V): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
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