American Express Enters into E-Commerce with New Payment Platform (AXP)

J.P. Morgan is out with a report today which discusses the new electronic payment platform, dubbed “Serve,” from American Express AXP. JPM analysts see the platform launch as AXP's belated entrance into the electronic payments market, and do not believe this technology will be particularly disruptive to AXP's competitors. As the report states, the new payment platform will give AXP customers an online P2P payment service along with enhanced mobile payment capability and a prepaid card offering. Serve will introduce new competition to the existing e-commerce systems of PayPal and Green Dot, both of which have gained significant share. While JPM analysts note that the platform is significant for AXP, they cast doubt on whether Serve will be widely adopted by existing cardholders given the company's focus on premium customers. The report also notes that AXP will not initially charge for putting money into the system using cash or debit cards. However, credit card deposits get hit with a fixed transaction fee of $0.30 plus 2.9% of the amount deposited. AXP is given an Overweight rating and is currently trading at $46.00.