Serve Aims To Be Part Of Retail’s ‘Massive Redefinition,' AmEx Says

Existing payments-industry giants are at risk of becoming obsolete if they do not begin experimenting soon with new payments technologies and finding innovative partnerships to meet the changing marketplace demands, according to Dan Schulman, group president for enterprise growth at American Express Co.

During a presentation on April 27 to kick off the 23rd Annual Card Forum and Expo at the Fontainebleu Hotel in Miami Beach, Schulman told attendees that as mobile technology evolves, the payments industry will change “quite dramatically,” opening the marketplace to new players whose goals will be much different than those of today’s payments-industry forces.

The existing payments industry is focused on delivering payments through established channels, but the very channels and devices are changing so quickly that a new, more customer-centric paradigm is required for the future, Schulman said.

Payments likely will play a key part in a “massive redefinition” of the retail industry that is already beginning, Schulman said, citing as an example upstart Netflix Inc. that decimated the market share of former home-entertainment kingpin Blockbuster Inc. Companies are able achieve such success by using new technology and policies that respond better to consumer demand, and by delivering products and information simultaneously across multiple channels, such as home computers, mobile phones and at the point of sale, he said.

 “Today, all of marketing is primarily about pushing (information to consumers), and it’s incredibly inefficient,” Schulman said. “If you can make it more efficient, drive out costs and allow consumers to make the connections, it will be far more efficient. Payments is a part of all of that, and (payments) will be very much involved in this redefinition of commerce.”

Through Serve, the new alternative-payments service AmEx is promoting in Eugene, Ore., (see story), AmEx hopes to learn through trial and error what consumers want from a multi-channel payments technology and how to meet their needs.

“We’re already learning a lot from feedback and hopefully we’ll listen and learn,” Schulman said, noting that Serve is only the first iteration of what AmEx envisions as a broad-based, global, cloud computing-based payments service that will be device-agnostic.

Although he is lean on details about how specifically Serve will find its audience and build market share, Schulman said partnerships, such as a deal it inked April 13 with payments-technology firm Payfone Inc. (see story),  where it is the dominant investor, will be crucial in the new service’s development.

“We have a host of other applications we want to put out (through Serve) ... that will enable consumers to buy and sell merchandise without having to go through a third party and to pay for merchandise online or offline any way they choose, whether it’s credit, debit or cash,” Schulman told PaymentsSource in an interview after his presentation. “We are learning as we go and developing our product around what consumers say they want and need.”