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.
Under the arrangement, Verizon Wireless customers in the coming months will be able to establish Serve accounts so they may make payments and redeem offers for goods and services directly from their mobile phones and tablets, according to Amex.
Amex also will leverage marketing at Verizon's more than 2,000 retail store locations, according to David Messenger, Amex executive vice president and general manager of online and mobile.
Serve authenticates a mobile number at checkout, and then it enables the customer to make a purchase on-screen. Verizon Wireless customers who use Serve can expect to buy goods and services on their mobile phone in just a few clicks, says Messenger.
Amex also plans to approach merchants to take advantage of Amex's connections with major retailers, says Messenger. "We're looking at a number of vertical markets," he says. "In some cases, we're looking to go to merchants directly."
For example, in the coming months Serve customers will have a better way to buy tickets through Ticketmaster using Serve, which is integrating a person-to-person payment option to give a consumer the option to add the email addresses of friends during checkout so they can send their own funds to pay for their tickets, Messenger says. A big problem for Ticketmaster is that consumers do not always complete their purchases of multiple tickets because they are concerned about whether their friends will pay them back, he notes.
Besides retailers, Amex plans to promote Serve among its bank partners that issue Amex cards to give those banks the opportunity to offer their customers a digital-payment option, says Messenger. "Serve focuses on those consumers who use cash, debit and checks today, and adding Serve is a great way for banks to provide a leading-edge digital-payments platform," he says.
Millions of U.S. merchants who accept Amex cards can accept Serve. Verizon Wireless also will collaborate to source, distribute and simplify redemption of online and mobile offers with participating merchants through the use of the Serve account. For example, as customers redeem certain offers or coupons using their mobile phones, the credits automatically may appear in their Serve account, according to Amex.
Amex and Verizon also are working with Payfone Inc. to support Serve checkout on Verizon Wireless devices. Payfone's preauthorization and intelligent-routing features will help Verizon Wireless customers who use the Serve application make mobile payments more simply and securely, the companies said.
Amex in April announced it made an undisclosed investment in Payfone. Amex also signed a Serve distribution deal similar to the Verizon Wireless one with Sprint Nextel last month.
One analyst who focuses on digital and mobile payments believes Amex is on the right track with its distribution efforts.
Amex recognizes that the key to any virtual mobile wallet is in getting sufficient numbers of consumers using it, so they need to see the sense in doing so, says Todd Ablowitz, president of Double Diamond Group.
Amex can do that not only through marketing and promotions but also by ensuring the systems are integrated properly with partner companies and retailers. "It's not good enough to just accept Amex," he says. "There has to be a way to tell consumers, 'hey, we've got Serve, and it's right here in this wallet.'"
Amex says it plans to embed Serve into the payment flow with partners like Ticketmaster, which should make it easy for consumers to use Serve at the point when they need it.
