American Express Removes Sign-Up Hurdle for Digital Payments
American Express is moving into digital payments with a new service called Amex Express Checkout, which allows members to quickly make online purchases using their American Express logins.
The space is packed with competing platforms like Visa Checkout and digital wallets such as MasterPass and Google Wallet, but the hassle of managing those services can prevent consumers from signing up and sticking with them, according to AmEx.
Like Visa Checkout, Amex Express Checkout is not a digital wallet. Customers don't have to create a new login and manually connect their credit cards as they do on MasterPass and Google Wallet. In fact, AmEx members don't have to enroll in the service at all, which is what sets the platform apart from other services. When it launches today, all U.S. cardholders with AmericanExpress.com accounts -- tens of millions of members -- will automatically be able to use the platform with their existing login information.
"The biggest hurdle to get a consumer to set up an account is to get them to do exactly that" -- set up an account, said Leslie Berland, exec VP-digital partnerships and development at AmEx. "What we have is something different that only we can do. … There is nothing new [consumers] have to think about and nothing new they have to do."
The platform will fill in consumers' payment details once they sign in to Amex Express Checkout on a participating retailers' online shopping cart.
AmEx is unique in the financial services category in that it issues all of its own cards and therefore has direct online relationships with consumers. Visa and MasterCard issue their own cards as well, but they also issue cards through banks like Chase and TD Bank. In those instances, cardholders have online accounts with the intermediary banks rather than the card issuers.
"We've got that built-in installed user base of very premium, affluent, high-spending cardholders," said Dave Wolf, VP-global product and business development at AmEx. "This a big step towards leveraging those credentials in a new way."
The service is launching with more than 15 merchant partners including Burberry, Gap Inc., Cole Haan, Newegg, Ticketmaster, Warby Parker and 1-800-FLOWERS. Some of those brands will be available today and others will follow in the coming months. AmEx is also working with Stripe, a payment startup that helps businesses accept online payments, to allow merchants who use the platform to accept Amex Express Checkout payments. From the merchant perspective, there is no change to the payment process, said Mr. Wolf, adding that merchants will receive all of the same data.
Like other online payment solutions, Express Checkout uses tokenization. In addition to added security benefits, it means that AmEx customers will not have to update their credit card numbers if they're lost or expired. The new card number will automatically be connected to their account when it's activated.
"We've heard from merchants that cart abandonment is one of the most important issues that they want help solving and Amex Express Checkout is designed to do that," said Mr. Wolf.
AmEx will promote the new service on its website, app and on email, as well as through social media and online advertising. The company will also push the platform on participating partner sites and explore opportunities to make co-branded pushes.
Amex Express Checkout will be a major marketing focus for AmEx this year, particularly online, as it ramps up for back-to-school, the late-summer travel period and the holiday season.
"Online spend is a critical part of our business," said Ms. Berland. "You can expect a lot of creative, engaging, fun assets cutting across the entire campaign."
The service won't work with buy buttons on social sites like Twitter and Pinterest, but AmEx may look to expand down the line. "The opportunity of where this could go is quite endless," said Ms. Berland. "But this is where we are starting, at the core of the commerce journey on merchant platforms."