AmEx-Walmart Expand Digital Payments - Analyst Blog
23 Aprile 2014 - 12:00AM
Zacks
American Express Co. (AXP) (AmEx) announced the
alliance of its full service reloadable prepaid account – Serve –
with Wal-Mart Stores Inc. (WMT). 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/pharmacy of
CVS Caremark Corp. (CVS) 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 MasterCard Inc. (MA),
Visa Inc. (V) and Discover Financial
Services (DFS), 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 Report
CVS CAREMARK CP (CVS): Free Stock Analysis Report
DISCOVER FIN SV (DFS): Free Stock Analysis Report
MASTERCARD INC (MA): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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