Commentary

AmEx Bets On Mobile For Turnaround

Long the premium credit card provider,  American Express has recently hit a rough patch. It’s lost branded card partnerships with companies like Costco and JetBlue, and faced competitors encroaching on retail payments with lower transaction fees for merchants and better rewards programs for consumers, among other problems. So mobile payments and related services will be a central part of the company's turnaround strategy, according to CEO Kenneth Chenault’s presentation to investors on Wednesday.

The new strategy will aim to boost usage of AmEx’s “Pay with Points” program, which allows customers to pay with their reward points instead of cash, in partnership with major service providers and retailers including Uber, McDonald’s, and taxis equipped with VeriFone’s payment system. Although these partnerships would also include payment by card, payment by mobile device (including by Reward Points) is expected to be a fast-growing component of the business.

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The company is also betting on mobile payments enabled by Apple Pay, part of a larger push to “fuel growth in online and mobile through enhanced security and service,” according to Chenault, as quoted in the Wall Street Journal. The WSJ also quoted from the presentation: “Our intent is to provide these customers with high-value proprietary products that meet their spending needs,” by implementing a “multi-pronged approach to increase our relevance and engagement with digitally savvy customers.”

Interestingly, some other platform partners identified by Chenault were Twitter and Facebook, suggesting some intriguing, if vague, possibilities for social commerce tie-ups, probably again through mobile.

Facebook itself is obviously keen on getting involved in personal finance and payments, having recently introduced its own person-to-person payment system. Facebook users can now send money to friends via Facebook Messenger, putting the social titan into competition with peer-to-peer payment services like Square, Venmo, and Snapcash, introduced last year by Snapchat and powered by Square.

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