Amex Folds Enterprise Growth but Keeps Prepaid (Jan. 21, 2016)
American Express will “scale back experiments” that focused on finding new revenue and consumers but continue to focus on prepaid and alternative payments, says a spokesperson for the payments network. But while American Express is folding its Enterprise Growth unit, the company will retain its prepaid cards designed for consumers who lack bank accounts.
Hours before American Express is scheduled to report fourth-quarter earnings later this afternoon, Jan. 21, the spokesperson, Kimberly Litt, says that “Serve and our prepaid and alternative payments are not being dismantled or shut down.”
Serve is a digital payments platform that enables mobile, P2P, online and offline payments. Serve and Enterprise Growth launched after American Express’ 2009 acquisition of Revolution Money, a payments startup. The demise of Enterprise Growth also does not affect Bluebird, the debit program launched by American Express and Walmart in 2012.
American Express will integrate into its core business parts of Enterprise Growth, meant to replicate the startup vibe of Silicon Valley and find products that would appeal to lower-income consumers. “For example, we moved our Foreign Exchange Services business under the Global Commercial Payments organization to give our corporate and small business customers the opportunity to more easily access these services,” Litt explains.
Among the Enterprise Growth projects that did not take off was a prepaid product planned for Mexico, she says. “There were some things that worked and some things that didn’t,” she says. Within the past six months, American Express has launched three Serve projects: a prepaid debit card that gives 1 percent cash back on purchases; a co-branded prepaid card with tax preparer Jackson Hewitt; and prepaid partnerships with TaxAct and Ria Money Transfer. Serve won Best-in-Category for Consumer Champion in the 2015 Paybefore Awards and is a winner in the category this year, as well.
Serve has “added millions of customers, many of whom had never considered American Express as a brand that was relevant to them,” Litt says, noting that 90 percent of Serve and Bluebird customers are either new to the company or returning card members.