The new Amex Express Checkout service bears a passing resemblance to rival products like Visa Checkout, MasterPass and PayPal. But that similarity is only skin deep.
Modern digital wallets consider it essential to give consumers choice, which is why they typically enable consumers to enroll with rival networks' cards. Visa Checkout accepts MasterCard, MasterPass accepts Visa, and both also accept American Express and Discover. But the Amex Express Checkout offering is strictly for Amex customers and this restriction may prove to be the product's masterstroke.
Amex Express Checkout is an extension Amex's existing online franchise, and uses the same user ID and password that the customer already set up at americanexpress.com to view and pay bills. Amex uses the payment and shipping information it already has on hand to auto-fill the checkout fields at a merchant site.
By contrast, a Visa Checkout user would create a different set of credentials for shopping online, even when enrolling through their card issuer's online banking site. Visa Checkout also asks users to type in their payment and shipping information during enrollment. Though this is a quick step, it's a burden that Amex deemed unnecessary.
"The biggest hurdle with a digital wallet is the fact that you have to set it up," said Dave Wolf, vice president of global product and business development for Amex. "You have to go to a website and enter all of your information. That is a huge hurdle for a consumer to get over, and an even bigger one if they are already in the 'checkout' mode when making a payment."
Amex has learned from consumer feedback that, despite the growing range of digital wallets on the market, the user experience needs to be streamlined, Wolf said. Amex customers would have to already be enrolled for online account access before they can use Amex Express Checkout, but the card company considers the online channel to be mature enough for this approach.
"We have tens of millions of card members that can use their existing Amex login to facilitate a transaction on a merchant site," Wolf said. "We've made these credentials more useful for them."
Amex Express Checkout will also appear as an option on the existing Amex app, with access to account information and rewards programs remaining intact.
Merchants that are onboard for Amex Express Checkout include Burberry, Warby Parker, Gap, Old Navy, Banana Republic, Hulu, Newegg, The Wall Street Journal, TicketMaster, Avis, Cole Haan, Barkbox, Ledbury, Sabon, 1-800-FLOWERS.COM and Stripe merchants. Amex has entered a partnership with Stripe, which offers a streamlined Amex Express Checkout integration procedure.
Particularly on mobile, payments are a real barrier to commerce, said Tim Drinan, a Stripe spokesman, in an email, adding merchants can integrate via Stripe in two steps, similar to other Stripe integrations. "Easier checkout flows like Apple Pay and Amex Express Checkout will make it easier for consumers to complete purchases on mobile devices, which means more conversions and transactions for merchants," Drinan said.
Amex customers can also set up an e-commerce account with a merchant while paying through Amex Express Checkout, which Wolf said will encourage a deeper long-term relationship between the merchant and consumer.
"If a consumer decides to keep his or her information on file with a merchant, that is great for Amex," Wolf said.
Amex Express Checkout is part of Amex's broader strategy to diversify digital payment features in the wake of Amex's loss of the Costco card account to Visa.
"Amex Express is a big bet for our company and a big priority for Amex," Wolf said.
The challenge for Amex is to demonstrate to merchants that cardholders accept the feature and it also reduces abandonmentwhich Amex says is the primary benefit for merchants, said Tim Sloan, vice president of payments innovation and the director of the emerging technologies advisory service at Mercator.
"I wonder how many consumers will know that they are already enrolled and then click on the [Express] checkout button?" Sloan said. "And of those that do, will they remember their user ID and password for the Amex website?"
But Amex is entering the e-payment race far behind Visa, MasterCard, Google, Apple and particularly PayPal, said Richard Crone, a payments consultant. However, Amex is leveraging the success of its online account management, which presumes consumers are actively accessing the Amex site or app, which gives the company two channels from which to draw Amex Express Checkout users, Crone said.
"[It's] a big enrolled base, but it's not all Amex cardholders," Crone said. "It also helps with validation and security since there's a prior online history. It is amazing that Visa and MasterCard didn't leverage their issuers' online banking platforms in the same way for single sign-on. In that way Visa and MasterCard are really competing with their issuers because they are building their own database of enrolled wallet users."