Bank Nerd » Blog Archive American Express Launches Serve Competing with Paypal » Bank Nerd
Thursday Feb 23, 2017

American Express Launches Serve Competing with Paypal

28 March 2011

American Express is looking to take on the industry giant PayPal in the digital payment and commerce space with their new platform Serve.

What is Serve?

Similar to PayPal, Serve can be used to make purchases and person to person transactions online, as well as at merchants that accept American Express cards and via mobile devices.

Serve accounts can be funded through debit cards, credit cards, charge cards, bank accounts or transfers from other Serve members.

AMEX is offering apps for iOS and Android and says the service will also be accessible through Facebook.

Consumers will be able to set up an online account at or through a smartphone app. Customers can use the various means of putting funds to their Serve account to sent and receive money to friends, pay bills and make purchases online.

What is extremely amazing about Serve is that it bridges and gap between online and offline commerce. Customers will be issued a Serve reloadable prepaid card linked to their Serve account, which can be used at any merchant or ARM that accepts American Express cards.

How does this compete with PayPal?

PayPal is an e-commerce business allowing payments and money transfers through the internet. PayPal has been around since 1998, and is the most used e-commerce payment system.

With Serve coming into the market, PayPal’s enviable position as the go to digital payment platform may soon be on shaky ground. AMEX will be aiming directly at PayPal and any other emerging payment platforms.

Serve competes with PayPal on the same playing field, and that includes offline purchases. PayPal offers a PayPal Debit MasterCard which requires you to apply for it, and usually takes 2 to 4 weeks. There are no fees associated with using the PayPal Debit MasterCard to make purchases, however there may be some associated with cash withdrawal and foreign transactions. PayPal even lets you earn rewards with your PayPal Debit MasterCard, once the purchase does not require a pin.

Serve offers a reloadable prepaid card that is available once you sign up for Serve. There is no separate application or credit check required.

Serve will initially be accepts anywhere that takes American Express credit cards, though AMEX has noted that Serve could expand through the adoption of technologies, such as near field communication (NFC) payments.

AMEX is working with a range of partners to integrate Serve as a payment method and deliver customized offers. Serve’s fees will waive most consumer fees for the next six months.

Although the absences of fees are great, Serve is not. AMEX will charge 2.9% plus $0.30 anytime money is put into a Serve account. ATM withdrawals will cost $2.00, after one free withdrawal, each month (these fees are similar to PayPal’s).

This announcement has come just two weeks are Visa revealed that it too will be entering the digital payment market. Google, MasterCard and CitiGroup plan to team up to test NFC “digital wallet” technology in select cities (more information coming soon).

I believe Serve will definitely be a source of competition for PayPal, especially with all they are offering. It may be new, but sooner or later it may be the next e-commerce giant, rivaling PayPal for practically all transactions. Currently Serve is only available in the U.S., however, AMEX has said they plan to launch Serve in other international markets in the coming year.

How do you feel about AMEX entering Serve into the digital payment market?

Article has been Updated

About the Author


My favorite weapon of choice is the samurai sword. I use it to cut my chicken during dinner, cut my hair and periodically carve my name into stone when I am bored. I love meditating on top of a 15ft high pole and eating those sushi’s with smoked salmon on top. I love everything there is about Canada and everything financially related to Canadians. I write deily posts from Canadian Banks to Credit Card information.

Comments (2 )

Adeem Zafar Wrote:

“however they have one which PayPal does not hold; that is the Serve reloadable prepaid card”.

I do not think this is accurate as you can use a PayPal Mastercard debit card with is attached to your PayPal account.

Sensei Wrote:

The article has been updated. Thank you for pointing that out, clearly I overlooked it while writing the article. Serve definitely has a challenge ahead of itself. Taking on PayPal will not be easy, we will see what happens in the coming months.

Add a Comment

Your Comment