American Express just launched a big new payments service called Serve.
The big, lofty goal is to replace cash and credit cards — eventually.
So if people love it, Serve could potentially be trouble for the traditional banks and credit card companies, and also for services like PayPal, Square, Venmo, etc.
But these types of services are very hard to launch and make popular, so first things first.
Serve is a new account and a new brand — serve.com has no Amex branding on its homepage — that you can fund through bank accounts, credit or debit cards, or payments from other Serve accounts. (So for now, the traditional players aren’t really being left out of the equation — just pushed to “funding.”)
You can use the money in Serve to pay other Serve accounts, or to buy stuff online.
You can also use it offline via a new Serve card, that works sort of like a refillable Starbucks card — fill it with money from your Serve account, and use it to pay anywhere Amex cards are accepted. Plus, you can use it to get cash from an ATM.
There doesn’t seem to be any fancy “mobile payments” aspect to this, at least not yet.
You can use the Serve app — iOS and Android — to “quickly send and receive money, easily split-the-bill for group purchases or meals — and even add gratuity.” But that seems to be a way for you to pay other people — not for everyone to use their phones to pay the restaurant for their share of lunch. That could come later, of course, perhaps even with a fancy “touch your phone to the sensor to pay” type of installation.
So, how much does it cost?
To put money into a Serve account, it costs 2.9% + 30 cents per load, discounted to 0% for cash, debit and ACH (“automated clearing house”) funds transfer. For the first 6 months, it’s free.
(PayPal has a similar fee structure for peer-to-peer transactions funded by credit cards.)
To get cash out of an ATM, you pay $0 the first time per month, and $2 per transaction every time after that. There are no fees to make peer-to-peer transactions.
And merchants get a special “prepaid discount rate” for payments made with a Serve account.
Serve is based on technology that Amex acquired when it bought Revolution Money, which was affiliated with former AOL CEO Steve Case.