American Express Co. is expanding its prepaid business through a partnership with AAA Southern New England that will allow the automobile club's members to receive co-branded cards.
The New York credit card issuer said Wednesday that the program will begin this month and will let the partner organization's 2.8 million members receive membership cards that also include a prepaid payment function.
AAA members that activate the payment feature will be able to pay for purchases at any merchant that accepts Amex cards, the card brand said. Cardholders will have to pay a one-time activation fee of $15, though the card does not have fees for reloads, balance inquiries, foreign currency conversion or replacement. The card also carries no fee for a customer's first ATM cash withdrawal each month but charges $2 for all subsequent withdrawals.
"Members will now have the option of being American Express card members, receiving many of the same benefits that are synonymous with American Express," Mark Shaw, the president and chief executive of AAA Southern New England, which serves members in Massachusetts, Connecticut and Rhode Island.
The deal is Amex's latest move to diversify beyond the high-end credit and charge cards for which it is known. Amex in May said it would sell gift cards in more than 1,800 post offices starting in June under a pilot with the U.S. Postal Service.
In February, Amex began testing sales of cobranded prepaid cards at Target Corp. stores. In April it announced a digital wallet service called Serve, which includes a prepaid account that can be funded with non-Amex payment cards.
