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American Express, which has been developing prepaid and digital payment options to expand its audience, has added yet another product: an online-only gift card.
September 6 -
Google's acquisition of Motorola Mobility Holdings strengthens the search giant's mobile payment plans.
August 15 -
To help distribute its Serve digital payment and wallet service, American Express Co. on Aug. 1 announced a deal in which Verizon Wireless will integrate the platform into many of its mobile phones and tablets.
August 1 -
The card issuer launches Facebook application to offer cardholders customized deals based on their "likes" and interests.
July 19
Conservative lender American Express Co. is trying more and more to look like a start-up.
The credit card company, long headquartered in a shining skyscraper in lower Manhattan, plans to open up a Silicon Valley office later this year. American Express will use its new California outpost to find partnerships with the "local technology and venture communities," according to a Friday
American Express has already found an executive from those communities to lead its expansion. The company said Friday that it has hired Harshul Sanghi, the managing director of North American venture activities for Motorola Mobility, to run its new office.
"It's surprising that we don't already have an office here … We definitely need to be part of that community," Sanghi told American Banker in an interview Friday.
He said he is looking for partnerships with the technology companies creating new products and the venture capitalists that are funding those startups.
"Silicon Valley is the world capital for venture capital — they're driving innovation. … We're going to develop and create the next big thing together," he said.
It is the latest step in American Express's attempt to transform itself beyond its traditional business and customer base. The company lends mostly to the wealthy, but has been trying to expand its business among young, tech-savvy consumers who use their phones and their computers more than their credit cards.
Part of that transformation has included hiring executives from outside of the traditional banking and credit card industries, especially from the mobile phone companies and Internet giants that are increasingly competing for payments business. Sanghi has left Motorola as it is being
Sanghi will report to Dan Schulman, who left Sprint Nextel Corp. in 2010 to start American Express's enterprise growth unit.
"Dan Schulman was hired to shake things up and to create a startup atmosphere in a well-funded organization," said payments consultant Ronald G. Mazursky, a managing director at
Market Innovations Inc. "There's a huge concentration of folks in the payments industry and the mobile industry [in Silicon Valley], and you go where the talent is."
In recent months American Express has unveiled its Serve "digital wallet" service and signed partnerships with mobile phone providers, including Verizon Wireless, and social media companies, including
But American Express is not the first big, traditional financial institution to set up shop in Silicon Valley. Card network Visa Inc. has its headquarters in San Francisco, and Citigroup Inc. has established a Citi Ventures unit in Palo Alto, California.
For big banks moving into the tech communities, "it gets them access right into the middle of mobile and emerging payments companies, so they can figure out which ventures to partner with and which to invest in and which to poach from," said payments consultant Steve Kietz of Woodbury Advisors.
