Amex's $300 million prepaid technology experiment ends in sale
American Express Co. is selling its prepaid card technology to InComm Holdings as the largest U.S. credit-card issuer by purchases continues its shift away from down-market customers.
InComm, which is backed by private equity firm Warburg Pincus, will also become the exclusive program manager and processor for Amex’s prepaid products, which include gift cards, business-to-business rewards, tax disbursements and reloadable cards, the two companies said Thursday in a statement that didn’t include terms. The deal is expected to be completed in the first quarter of 2018.
“After considerable deliberation, we have decided to partner with InComm as we start a new chapter for our prepaid business,” Stefan Happ, Amex’s executive vice president of global prepaid and alternative payments, said in the statement.
Amex last year dismantled its enterprise growth division, which was created in 2010 as part of an effort by the New York-based firm to broaden its appeal beyond affluent shoppers. The firm had acquired payments startup Revolution Money that year for about $300 million and renamed it Serve, using the technology to offer a line of reloadable prepaid cards that function as a digital alternative to a checking account. In 2012, American Express reached a deal with Wal-Mart Stores Inc. to expand sales of its Bluebird prepaid card.
InComm has long been the technology provider that activates Amex prepaid cards at the point of sale. Amex will remain the network and issuer for the cards following the deal, but InComm will handle distribution and customer service, Scott Meyerhoff, the Atlanta-based prepaid firm’s chief operating and financial officer, said in a phone interview. InComm will also keep balances on file and subtract funds as customers swipe their cards, he said.
“The platform is very important to us, and we can take the best of the technology we have, and the best it has, and put it together,” Meyerhoff said.