Credit card giant American Express (AmEx) has announced it is selling its Serve platform to InComm, in a deal that gives the latter firm exclusive rights to distribute Amex’s prepaid and reloadable card products in the United States. The deal is slated for completion in early 2018, the firms said in a joint statement.
Stefan Happ, AmEx executive vice president of global prepaid and alternative payments, noted in that statement, “After considerable deliberation, we have decided to partner with InComm as we start a new chapter for our prepaid business.”
The companies, as reported by Bloomberg, have struck the agreement as AmEx is shifting away from what the newswire termed “down-market customers.” Other products that now fall under InComm’s purview as processor and program manager include business-to-business rewards and tax disbursement cards.
The newswire noted AmEx’s Thursday announcement follows a move last year to shut down its enterprise growth division after six years, part of an initiative to go beyond the company’s traditional affluent customer base.
Within the effort, which began in 2010, AmEx purchased Revolution Money for $300 million, rechristened the company “Serve” and focused on, as Bloomberg noted, a “digital alternative to a checking account.”
InComm is a provider of prepaid cards and payment processing solutions. Scott Meyerhoff, the chief operating and financial officer of InComm, told Bloomberg his firm will keep track of balances and subtract funds as cards are used.
In an interview with Bloomberg, DA Davidson analyst Arren Cyganovich said the aforementioned business “never really gathered any momentum,” and he is “not surprised that they would be looking to take their lumps on it and just focus on what they’re good at. But it does leave a hole in their business model in terms of not having a competing debit product.”