American Express is planning for a post-plastic world. The 166-year-old financial-services giant is forging a series of digital partnerships with companies — from Uber to Airbnb to most recently Facebook Messenger — to make payments so seamless, they’re nearly invisible.
Last week, the brand announced its plans of unveiling a Facebook Messenger bot later this year, which would send members real-time notifications about their purchases as well as information about their card benefits and services associated with those purchases. If you buy an airline ticket, for instance, you will not only receive a purchase notification but also other helpful tips, such as how to access airport lounges or what restaurants to eat at.
“As the payment form factors continue to change, it is safe to say, you will be swiping a physical plastic card at the point-of-sale less and less often,” said Dave Wolf, vp of digital partnerships and development at American Express. “So it becomes more and more important to integrate all of our services into the platforms where our customers are already going. That’s what drives our partnerships.”
Last year, the company launched a new service called Amex Express Checkout, which allows members to quickly and easily make online purchases using their American Express logins. In November 2015, it also partnered with Airbnb to provide its members a way to redeem their reward points on the platform. Its partnership with Uber since 2014 also allows its members to use their loyalty rewards seamlessly with the ride-sharing service.
AmEx believes the more seamless an experience it creates, the more likely consumers will keep coming back. To help facilitate and personalize these experiences, the company has a rich trove of customer data to pull from, said Wolf. AmEx is uniquely positioned in the financial-services category in this sense because, unlike Visa and MasterCard, it only issues its own credit cards instead of also partnering with other banks. This allows it to have direct relationships with its customers and thus access to all their data.
“Payments have become invisible, but even in that type of an environment, our goal has been to figure out how to bring AmEx value to that service,” he said. “Our closed loop of data powers these differentiated experiences.”
Apart from data, the company is relying on its membership rewards program to build brand loyalty as shoppers use plastic cards less frequently. Members enrolled in its rewards program, for example, can choose to earn double the points for Uber rides or use points to pay for them.
“We can’t be afraid of a changing payments landscape because that’s the reality we’re operating in,” said Wolf. “We don’t fear our brand being diluted either, and are confident that we will be able to bring value and unrivaled customer service to each of these experiences.”
AmEx is still figuring it out, but it may be on to something. Digital payment rewards that are truly tailored around consumers is an opportunity to not only incentivize mobile payments adoption but also build customer loyalty, according to an Accenture survey of over 4,000 consumers in North America. A full 79 percent of of mobile payments users and 54 percent of non-users would adopt mobile payments if discount pricing and coupons were offered, the survey found. Further, consumer usage patterns are also shifting — from product purchases to service-oriented transactions such as taxi services — increasing from 26 to 28 percent between 2014 and 2015.
“The financial services industry does not want to be caught in the innovator’s dilemma: They’re all worried about their core businesses and are trying to make sure they stay relevant,” said Sucharita Mulpuru, vp and principal analyst of e-business and channel strategy at Forrester. “These partnerships are a good way to piggyback on these tech disruptors, be a part of the dialog and get learnings.”
But they also have to be strategic about it.
“We are never looking to build or leverage technology for technology’s sake,” said Wolf. “We want to make sure that we’re solving a problem and providing value to both our customers and merchants.”