AMEX Serve Card: Message for credit unions

by. Henry Meier

The incremental but inevitable evolution of banking away from the traditional branch model took another important step yesterday with the announcement that American Express will now be offering its Serve, prepaid, reloadable plastic card at WalMart stores nationwide.  This means that people will be able to walk up to cash registers at WalMart and reload cards from which many basic banking services can be performed.  They can do all these banking services without ever having to bother going into a credit union and American Express has so far introduced a model with surprisingly low fees compared to prepaid card competitors and many bank accounts.

News like this combined with the announcement that Facebook is moving more aggressively into electronic fund transfers demonstrates that traditional retail businesses as well as cutting edge, high tech companies have looked at the traditional financial services model and decided that there is a much better way of doing business.  American Express is positioning its existing prepaid card, BlueBird, as the card for the “unhappily banked” and positioning its Serve card as the financial choice of the “unbanked.”

What makes AmEx’s announcement all the more important for credit unions is that it is coupling the expansion of its prepaid card network with an advertising campaign directed precisely at the type of people that credit unions have traditionally sought to serve.  According to its press release, you will soon be seeing documentary style commercials in which American Express chronicles the travails of “a handful of hopeful Americans as they navigate their way through an antiquated financial system that can inhibit, rather than help people’s ability to access, move and manage money as well as save for the future.”

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