While digital initiatives take longer to show their effect in the company's revenue, American Express Co. is still making investments in emerging payments and prepaid cards.
Amex is excited about [the prepaid] market and see[s] market potential in the longer term its really important for our investment portfolio, said Jeffrey Campbell, executive vice president and chief financial officer at Amex, during the companys third quarter earnings call on Oct. 16.
Recently Amex relaunched its Serve prepaid digital wallet with several new features to make the wallet more like a full-featured bank account. Amex also partnered with InComm accept free cash loads to Serve accounts at 14,000 CVS and 7-Eleven retail locations. Amex plans to announce other free cash reload locations for Serve in the near future, Campbell says.
Amex is also focusing on its loyalty rewards coalition program, which is growing nicely, says Campbell. Recently Amex has been going after video gamers, creating a League of Legends prepaid card and rewarding Halo players based on their performance in the game if they linked an Amex credit card.
Amex will also continue to invest in technology, he says. Several big data initiatives are driving up technology costs, but this is good, he says.
The company will also continue to invest in expanding its network around the world, such as its partnership with Wells Fargo to offer cards that are accepted on Amex network of merchants, Campbell says.
Amexs net income in the third quarter rose 9%, to $1.4 billion, from the same period a year earlier. Its consolidated total revenue, net of interest expense, rose 6% to $8.3 billion in the third quarter, driven by increased cardholder spending and higher net interest income.
At the beginning of the year, Amex announced plans to let go 5,400 employees because of technological changes to improve productivity and service quality.