An in-depth analysis for the American Express Serve® brand. Includes research on the company, competitive landscape and target audience.

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Subject: Smirniotopoulos Landscape Analysis – American Express®
Date: 3.2.2015
Executive Summary
American Express is a household brand with a global footprint. The capacity to roll
out new products and services makes it one of the most dynamic organizations in
the world; and most recently, it has launched its Serve® prepaid credit card/ virtual
wallet, developed for unbanked and underbanked Americans. This landscape
analysis seeks to build an understanding of the credit card industry, American
Express’ role amongst its competitors, the Serve® product and its anticipated
communications goals and recommended road to success.
Research Methodology
Information offered in this landscape has been gleaned from secondary online
research including the following sources:
1) IBISWorld: industry background within both the Credit Card Issuing and Credit
Card Processing & Money Transferring industries.
2) News items specific to Serve® via Factiva and Advanced Google Search: editorial
and anecdotal pieces explaining the product.
3) Netbase: “brand passion” index measuring the amount of buzz (volume) and
sentiment (qualitative assessment).
4) Simmons OneView: cross tabbed household incomes with credit card usage and
American Express affiliation to detect relationship patterns.
5) FDIC National Survey of Unbanked and Underbanked Householdsi: provides an
understanding of Serve®’s target audience
Industry
The credit card industry has recently endured unfavorable years from both a
regulatory and consumer-trust perspective. That said, a recovering economy along
with transparent efforts to educate consumers on credit card usage have slowly
begun to pivot the $87.9 billion industry toward stronger times ahead, with a
predicted 2.5% growth between now and 2019.ii The success and stability of this
industry is dependent on consumer spending, which is directly linked to
employment rates and household earnings, among other factors. While the business
interests of discreet companies in this market are not necessarily focused on social
responsibility, they have a common interest with the rest of the American public to
improve the economy, create more jobs and bolster smart spending practices.
American Express enjoys a 20% market share of the credit card issuing industry
followed by Bank of America and JPMorgan Chase & CO.iii Within the credit card
processing and money transferring industry, it owns a 9.4% market share after Visa
Inc. and KKR &CO, and is followed closely by MasterCard.iv As this landscape
analysis specifically concerns American Express Serve®, the competitors presented
are companies that offer similar prepaid card or virtual wallet products.

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American Express Serve®
Background
The Serve® division has made a unique stamp in the history of its parents company,
credit issuing and mobile banking at large. Long known for its exclusive, upper-class
customer base, American Express launched an effort to grow its customer portfolio
and make a positive impact on lower-middle class American citizens’ finances. The
new department was quietly established in 2012 and has recently seen an uptick in
media coverage from a new research program aimed at understanding consumer
spending and saving habits.v The initiative is branded as an opportunity to
encourage Americans to save money and has partnered with the U.S. Consumer
Protection Bureau (CFBP) to inform their own consumer reports.
While the prepaid card and virtual wallet functionalities of Serve® are marketed as
tools to help underbanked Americans manage their finances and hopefully save
money, users are unable to build their credit. This is a simple product intended to
help people manage the money they already have. In that spirit, and in addition to
the relationship with CFBP, American Express has developed several lucrative
partnerships to round out its Serve® mission including:
 IRS and TurboTax. vi vii Users are able to receive tax refunds deposited
directly into their Serve® accounts, reducing the paper trail and simplifying
the tax filing process.
 CVS, Family Dollar, Office Depot, Walgreens and Wal-Mart.viiiix In addition to
allowing users to register for accounts online and receive the physical card
in the mail, American Express sells the product at businesses that serve a
wider public. Users are also able to reload their cards at Wal-Mart, CVS and
Family Dollar.
Product-Specific Competitors
Aside from the major credit companies listed in the industry landscape above, a
small handful of products similar to Serve® are currently in-market. There are
virtual wallets including Apple Pay, Google Wallet and Paypal. x The main differences
between these products and Serve® is the credit card company backing;
competitors require the user to externally link to their own bank and don’t have the
ability to set up subaccounts (i.e. a savings account) within the product. As for other
prepaid cards or debit cards, Serve® has been widely applaudedxi as being the least
expensive, and simplest to use in the market. It boasts a $1 a month fee to keep an
account active, can be reloaded ad hoc and also functions as an ATM card. xii
Communications Objectives
The Serve® product is built for low-middle class Americans who are considered to
be unbanked or underbanked. Presumably the organization’s main objective is
sales-centric and seeks to break into this new, quite large, market, as smaller profit
margins from lower-income users are higher in volume than its current customer
base. It can also be assumed that the organization will benefit from such a socially

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responsible mission from a brand-building perspective and to even propagate
consumer spending. Provided this insight, this landscape analysis assumes the
Serve® communications goal is:
Audience
The Serve® product is geared toward a completely new audience for American
Express. As noted above, the organization has a long-standing reputation of serving
upper class, celebrity-status demographics.xiii Products including Platinum and
Black Cards are associated with large spending minimums and partner with upscale
merchants (i.e. Tiffany’sxiv). The target audience needed to meet its new
communications and business goals is low-middle socioeconomic class citizens, and
specifically the unbanked and underbanked segments.
Unbanked and underbanked Americans are typically referred to interchangeably as
those without accounts at accredited banksxv. This implies they do not have the
ability to securely deposit funds, access credit or accumulate savings. The true
distinction is important for Serve®: unbanked citizens have zero affiliation with
banks and/or credit card companies, typically minors or immigrants. Underbanked
citizens, on the other hand, have had some sort of association with these companies
and were either underserved and/or disassociated from the bank.xvi The FDIC
conducted a comprehensive survey of these demographics in 2013; the following
highlights should be of interest to American Express as it communicates with target
audiences:xvii
*Unless noted otherwise, all data has been pulled from the FDIC’s 2013 Unbanked and
Underbanked Household Survey.
 In 2013, one out of thirteen households declared to be unbanked, which is
actually an improvement from 2011 findings.
 Demographically, these unbanked and underbanked Americans pool from non-
Asian minorities, young and unemployed households.
 The top reasons for distrusting banks in descending order are:
o Lack of money to keep an account open
o Distrust and/or dislike of banks, generally
o High/unpredictable fees
 48.6 percent of unbanked households that have previously had accounts
expressed interest in opening another in the next year, compared to 25.2 percent
who have no previous experience with a bank account.
 “Prepaid card use is higher among unbanked households than other banking
status groups.”1(Page 10)
 68% of underbanked have access to internet via their mobile phones.1
To empower audiences to take control of
their finances by using Serve®.

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Serve® SWOT Analysis
Strengths
 Serve® is backed by a trusted parent company that has the capital to fund
such a new and costly endeavor.
 This product is dependent on online and mobile baking which is tedious to
stay at the forefront of; American Express is able to keep up with
technological advancements necessary to disseminate this product to such
a large audience.
 The culture of the parent company has taken on a somewhat altruistic tone
and has positioned itself as a transparent, almost consultative partner to
those seeking savings best practices.
Weaknesses
 An unfamiliar target audience doesn’t allow for internal teams to rely on
their tried and true outreach experience; outside consultation might be
required to communicate effectively.
 The current upper-class customer base does not resonate with the target
audience.
 American Express has also a reputation of making customers jump through
hoops and charging merchants higher fees than its competitors.
Opportunities
 The economic climate has primed audiences to seek savings best practices
and more practical, secure ways to save and spend money.
 Businesses serving low-middle socioeconomic classes haven’t yet had the
opportunity to partner with American Express because there hasn’t been a
product appropriate for their customers. Serve® offers American Express a
completely new, and quite large, tier of businesses with whom to partner.
 The country has become largely cashlessxviii which makes the product more
attractive to audiences who prioritize such convenience.
Threats
 When industry regulations increase or new ones are implemented,
American Express will need to find the money to meet these new demands;
often in the form of increasing consumer costs which could lose audiences.
 Profit is determined by individual transactions, so the long-term success
of Serve® is directly tied to how many purchases its users process. Just as
the current economic climate has consumers seeking consultation and
savings tools, it can equally make them hesitant to spend money.
 As much as technological advances benefit the industry, the ever-growing
online storage of consumer data increases likelihood of security breaches
and system-hackings.
Brand Analysis
The Serve® platform is relatively new and has presumably benefited from early
success, considering the increased investments American Express has made into the
program in the last year. There is no easy way to reverse the high-end, upper-class
reputation the brand has become so well known for, and it wouldn’t be a good idea

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to shed this history. Given the communications goal of empowering audiences to
take control of their finances, these current or potential consumers need to trust
whoever has built the product and is helping them use it.
To stay ahead of competitors, American Express should continue to partner with
organizations that understand the unbanked and underbanked populations. It
should also consider launching a pointed effort to battle cybersecurity threats, as an
influx in customers opens the organization up to very large, and public, breaches.
Finally, in terms of audience outreach, the highlighted data above shows a clear path
of initial success. The underbanked segments have previous relationships with
credit card companies whether it was American Express or a competitor and
whether it was positive or negative. American Express has the opportunity to target
these demographics and either build upon, or correctly realign, their existing
perceptions.

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i Burhouse, Susan, Karyen Chu, Ryan Goodstein, Joyce Northwood, Yazmin Osaki, and Dhruv
Sharma. 2013 FDIC National Survey of Unbanked and Underbanked Households Executive Summary.
Rep. Federal Deposit Insurance Corporation, Oct. 2014. Web. Feb. 13.
<https://www.fdic.gov/householdsurvey/2013execsumm.pdf>.
ii Carusotto, Daniel. Credit Card Issuing in the US. Rep. no. 52221. N.p.: n.p., 2014. IBISWorld Industry
Report. IBISWorld. Web. Feb. 13.
<http://clients1.ibisworld.com.proxy.library.georgetown.edu/reports/us/industry/default.aspx?enti
d=1293>.
iii Ibid (“Credit Card Issuing in the US” report)
iv Imbruglia, Melissa. Credit Card Processing & Money Transferring in the US. Rep. no. 52232. N.p.: n.p.,
2015. IBISWorld Industry Report. IBISWorld. Web. Feb. 13.
<http://clients1.ibisworld.com.proxy.library.georgetown.edu/reports/us/industry/default.aspx?enti
d=1303>.
v Groenfeldt, Tom. "American Express To Research Ways To Encourage Savings." Forbes. Forbes
Magazine, 29 Dec. 2014. Web. 20 Feb. 2015.
<http://www.forbes.com/sites/tomgroenfeldt/2014/12/29/american-express-to-research-ways-
to-encourage-savings/>.
vi "American Express Serve® and Intuit Team Up This Tax Season To Deliver Fast and Convenient
IRS Refunds." MarketWatch. MarketWatch News Department, 30 Sept. 2014. Web. 20 Feb. 2015.
<http://www.marketwatch.com/story/american-express-serve-and-intuit-team-up-this-tax-season-
to-deliver-fast-and-convenient-irs-refunds-2014-09-30>.
vii "Get Your Tax Refund Fast." Tax Refund Prepaid Card. American Express, n.d. Web. 25 Jan. 2015.
<https://www.serve.com/tax-refund/>.
viii Frankel, Matthew. "1 More Reason American Express Is a Great Company." 1 More Reason
American Express Is a Great Company. The Motley Fool, 20 Nov. 2014. Web. 20 Feb. 2015.
<http://www.fool.com/investing/general/2014/11/20/1-more-reason-american-express-is-a-
great-company.aspx>.
ix "Serve.com." Reloadable Prepaid Card. American Express, n.d. Web. 25 Jan. 2015.
<https://www.serve.com/>.
x Gerstner, Lisa. "Mobile Wallets: A Smart Way to Pay?" Mobile Wallets: A Smart Way to
Pay? Kiplinger's Personal Finance, Jan. 2015. Web. 20 Feb. 2015.
<http://m.kiplinger.com/article/credit/T057-C000-S002-mobile-wallets-a-smart-way-to-pay.html>.
xi Perez, Sarah. "American Express Serve Goes After The “Under-Banked” With Prepaid Cards You
Load With Cash In Stores." TechCrunch. N.p., 8 Oct. 2013. Web. 22 Feb. 2015.
<http://techcrunch.com/2013/10/08/american-express-serve-goes-after-the-under-banked-with-
prepaid-cards-you-load-with-cash-in-stores/>.
xii "American Express Serve Review." Credit Card Insider. N.p., n.d. Web. 20 Feb. 2015.
<https://www.creditcardinsider.com/credit-cards/american-express/serve/>.
xiii "American Express Rewards Point Value." Review. Web log post. Credit Card Forum. N.p., n.d. Web.
15 Feb. 2015. <http://creditcardforum.com/blog/american-express-rewards-point-value/>.
xiv Ibid (“American Express Rewards Point Value” article)

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xv Ibid (FDIC Unbanked and Underbanked Household Survey)
xvi Connelly, Leslie. "Unbanked? Underbanked? Is There a Difference?" Unbanked Trends Unbanked
Underbanked Is There a Difference Comments. N.p., 29 Sept. 2009. Web. 20 Feb. 2015.
<http://www.unbankedtrends.com/index.php/2009/09/unbanked-underbanked-is-there-a-
difference/>.
xvii Ibid (FDIC Unbanked and Underbanked Household Survey)
xviii Ibid (FDIC Unbanked and Underbanked Household Survey)

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Misc Notes/ Facts.
There are roughly 70 millionAmericans who count as financially underserved. That means they don’t
have access to traditional banking accounts or banking services, and that leave them in the position
of having to rely on places like pawn shops and check cashers.xviii
According to the 2013 Federal Reserve Payments Study, the number of credit card transactions
increased at an annualized rate of 7.6% from 2009 to 2012, rising from 21.0 billionto 26.2 billion
transactions. IBISWorld estimates that revenue for the Credit Card Processing and Money
Transferring industry has increased at an annualized rate of 4.0% to $54.3 billion in the five years to
2015.xviii
Consumers will continue to bypass cash and perform transactions using credit cards or other
electronic means, leading to higher volumes for the Credit Card Processing and Money Transferring
industry. IBISWorld estimates revenue for the Credit Card Processing and Money Transferring
industry to grow at an average annual rate of 2.9% to $62.6 billion in the five years to 2020. Over this
period the growing popularity of electronic payment methods due to the growing online retail and e-
commerce market will drive industry growth. Consumer spending will rise as a result of easily
accessible payment methods and markets, increasing transaction volumes. The industry's client base
will continue to grow as more merchants rely on credit cards and other electronic methods for
payment from customers. As a result, revenue is expected to increase 3.4% in 2016.xviii
With Serve, our full service reloadable prepaid account, we can now provide the nearly 70 million
Americans who are unbanked or underbanked a simple and affordable way to move and manage
their money.xviii
Marketing gig: Amex offers reward points in the form of mobile gaming dollars. xviii