A couple of announcements from American Express Company (AXP) are making news currently, as the company remains focused to deliver superior customer service. Earlier this week, American Express Serve, the full-service reloadable prepaid access account of AXP, launched a free nationwide cash load network and partnered with Learn Vest. At the same time, American Express also allied with global travel site TripAdvisor. However, neither news failed to shore up share price on Oct 9, 2013 owing to broader market conditions.
In its introduction of the free cash load network, American Express incorporated new features like Direct Deposit, Bill Pay, Mobile Check Capture, Personal Financial Management Tools, and Reserve. The new features have been included keeping in mind the customers’ needs for a hassle-free alternative to traditional banking. Currently it has been found that 10% of the prepaid card users reload their cards about 5 times per month on an average. Using the new network, customers will be able to save in a range of around $72 to $240 per year. The new network therefore holds promise of less worry for future expenses, for scheme holders.
American Express will provide this service charging $1 per month from Dec 3, 2013 onwards. This fee being much lower than the average monthly fee that prepaid card companies charge normally, is expected to attract more customers and thereby pull up revenues for the company.
Additionally, American Express’ alliance with Learn Vest and introduction of Reserve – an account for storing money for upcoming expenses is expected to help the company further enhance its services on Serve. American Express also declared that American Express Serve will now be available online at select stores of CVS/pharmacy, the retail division of CVS Caremark Corporation (CVS), Family Dollar Stores, Office Depot Inc. (ODP), Walgreens (WAG) and Duane Reade. We expect this large scale availability to boost American Express’ customer service efforts and hence help it to gain more customers.
Towards attracting more customers, American Express’ efforts are also visible in its partnership venture with TripAdvisors. The partnership is aimed to allow card members from the U.S., U.K. and Australia to post reviews, navigate hotspot lists and avail attractive travel offers on their TripAdvisor profiles. Customers will be able to access the TripAdvisor profiles by connecting their American Express Cards to the TripAdvisor site. Thus, by providing a huge range of benefits through the partnership, American Express will be able to attract frequent travelers which should amount to escalating top line going forward.
While introduction of the cash load network is an approach to make money management more convenient, the partnership with TripAdvisor is a blend of technology, data, community and commerce to make travel more attractive through the use of American Express cards. Overall, both the transactions represent American Express’ focused strategies towards enhancing customer satisfaction and thereby gain on card membership. We expect the endeavors to bode well for the company’s long term growth.
American Express currently carries a Zacks Rank #2 (Buy).
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