American Express Co. is preparing for the future of payments.
In announcing a pair of executive appointments Wednesday, the New York card issuer solidified its commitment to emerging technologies in the payments industry, including online, mobile and peer-to-peer products and services.
Daniel H. Schulman, a Sprint Nextel Corp. executive, will join Amex in August as president of a newly created business unit, the enterprise growth group. He will oversee Amex's global prepaid business and Revolution Money, the online payments business the company bought in January. Amex's business development and mergers and acquisitions unit also will report to Schulman.
Additionally, Amex named the Internet mogul Ted Leonsis to its board. Leonsis, a former top executive at AOL Inc. and former chairman of Revolution Money Inc., will head a new innovation and technology committee.
The appointments and the creation of the new business unit build on Amex's $300 million acquisition of Revolution Money. The deal was seen as a springboard for the company to move deeper into the prepaid world.
Revolution Money, which was founded in 2007 with the backing of AOL co-founder Steve Case, runs an alternative payments network, including an online person-to-person money transfer service and a credit card. At the time the acquisition was announced in November of last year, the company said it had signed up 400,000 users.
Traditionally, Amex has relied on its core credit and charge card products to drive growth, but the collective shift among consumers toward prepaid has forced the company to consider expanding its offerings.
"New technologies are redefining the payments business and creating opportunities that go beyond our existing businesses," Kenneth Chenault, Amex's chairman and chief executive, said in a press release. The goal of the new business segment is to "create new fee-based revenue streams for the post-recession environment," he said.
In Schulman and Leonsis, Amex has found capable leaders in emerging technologies.
Schulman has been president of Sprint Nextel's prepaid group since 2009. Before that he was the founding CEO of Virgin Mobile USA, a mobile operator that was sold to Sprint last year. He also spent time at priceline.com and AT&T.
Bringing someone in from the outside, and from a different industry no less, is a smart move, said John Grund, a partner at First Annapolis Consulting in Linthicum, Md.
"It's no coincidence that this fellow came from a mobile company," he said. "Traditional payment forms are at an inflection point relative to maturity and probably the next generation of growth is going to come from new product types."
"Certainly bringing in someone from the outside is showing their commitment and perhaps their belief that an outsider's perspective that is unencumbered by legacy … can bring new thinking," he added.
Leonsis held a number of executive positions at AOL from 1994 to 2006, including vice chairman and president. He has also founded several businesses, including SnagFilms, a company that distributes documentaries, and Monumental Sports & Entertainment, which owns several professional sports teams in Washington and the Baltimore-Washington Ticketmaster franchise.
The strategy of creating a business unit devoted to uncovering new payments technologies has been adopted by other credit card companies. MasterCard Inc., for example, announced in April that it had created a research and development unit, MasterCard Labs, to advance new products in areas such as mobile banking, data security and person-to-person payments. (Unlike Amex though, MasterCard is not an actual lender.)
By forming the new business unit, Amex is "signaling further that emerging payments, emerging technologies [are] a big growth opportunity," Grund said. "It's pretty logical to have that centralized in some fashion, because by definition it crosses over all customer segments and all product lines and brings a fair amount of attention."