American Express announced plans to launch a $100 million digital commerce fund expected to give the elite credit card issuer a huge leg up in the digital commerce market—a field the 162-year-old credit card issuer is already no stranger to.
The Silicon Valley, Calif. fund will be looking to make investments in companies with specific mobile commerce focuses like rewards and loyalty, mobile and online payment management, fee-based services, security, fraud detection and data analysis.
“The payments industry is undergoing a fundamental change as the very nature of commerce is redefined,” said the company’s Managing Partner of Enterprise Growth, Harshul Sanghi, in a company statement. “We believe our global network of businesses and consumers, international employee base, world-class customer service and data analytics will provide a significant advantage to potential portfolio companies.”
A representative declined comment when asked which specific companies the new fund would initially target.
American Express: An Innovator In Mobile Commerce
Anyone who’s followed American Express (NYSE:AXP) closely knows the company has already played a hefty role in funding a number of mobile commerce companies over the past few years. This past March the company launched a mobile wallet service called ServeSM, which allows members to make person to person money transfers and mobile, online and in-store payments with one account.
The accounts are funded through an individual’s bank account, debit, credit or charge card, or from receiving funds from another ServeSM account holder. Members can also opt to receive reloadable prepaid cards linked to their accounts, which can be used anywhere American Express cards are accepted.
One month later American Express partnered with Verizon Investments Inc. and Rogers Communications to close a $19 million strategic funding round to develop mobile commerce service Payfone—which also launched this past April. The service differs from Serve in that its a direct carrier billing service, meaning all mobile payments made are directly linked to a consumer’s cellular phone number and any charges incurred are simply added to their monthly cellular phone bill.
Verizon Wireless was one of the first mobile wireless providers to integrate Payfone into its wireless services, while T-Mobile followed suit this past August.