AmEx Reloadable Prepaids like Serve “Profitless Expense for AmEx”

by Adam S.

The American Express venture into the world of reloadable prepaid cards has been unprofitable thus far according to a new Bloomberg article.

At the beginning of last year, reloadable prepaid cards remained a profitless expense for AmEx, according to people with knowledge of the matter. Payments research firm Mercator Advisory Group estimates that the company has climbed no higher than sixth place among prepaid-card issuers.

Investors have also been concerned with the potential dilution of the AmEx brand and the fact that earnings for prepaids are not broken out:

Still, investors were skeptical from the outset about AmEx’s efforts to appeal to the masses. Going down-market risked diluting AmEx’s brand among America’s affluent, according to analysts including Jason Arnold at RBC Capital Markets. Such concerns were compounded as AmEx declined to break out the project’s earnings and market share. “If Serve had been successful, AmEx would have been out like a peacock bragging about it,” Arnold said. “The fact they kept so quiet for so long is, in itself, an indication these products never caught on.”

Check out the very interesting read including the evolution of Serve here.

Related – Amex Bluebird & Serve Shut Down Video Reaction from Reddit


The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.


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rick b January 21, 2016 - 9:23 am

wait until they fire every one of us for “unusual” activity and discover they had almost no legitimate users.

JEM January 21, 2016 - 9:59 am

@rick b – What makes you think they didn’t know that from the first month?

Amex has loads of analysts and tools, and the likelihood that they didn’t notice the deviation from their initial model very quickly is ludicrous.

It always amazes me that some of us playing this game think that we’re pulling something over on the bank/retailer/etc., rather than just being tolerated as a cost of doing business…

rick b January 22, 2016 - 12:22 am

you’d be surprised at the level of managerial incompetence and general disarray that goes on in prominent corporations. My question then is why kill it now? I suspect the lack of profitability was well hidden by product managers or no one simply thought to look. We don’t really cost them money since we never call support just bloat the user base.

Steve January 21, 2016 - 10:06 am

I feel bad when big banks dont make money


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