American Express’ rollout of its ExpressPay contactless technology virtually guarantees it a sizeable customer base. That is because the new payment method will be ‘appearing’ on a card that’s already in the hands of thousands of users – the successful Amex Blue.
In early June, American Express announced that it had begun issuing its Blue card with the contactless ExpressPay feature in all 50 states. The news coincided with the announcement that national convenience store chain 7-Eleven would be accepting ExpressPay at its 5,300 U.S. stores by early 2006. American Express is also partnering with another convenience store chain, Sheetz, as well as CVS Pharmacy and Ritz Camera, said American Express spokesperson Rosa Alfonso.
“Our main focus is the U.S. and our concentration is to get more cards into the hands of our customers nationwide,” commented Ms. Alfonso.
While she said she couldn’t divulge names of any future merchants that may be taking the card, based on the merchants the company has already selected, supermarkets, pharmacies, convenience stores, and fast food restaurants are likely candidates due to the card’s two major benefits–speed and convenience.
In an American Express pilot ExpressPay program launched three years ago with a key fob, several Phoenix, Arizona fast food restaurants were included. Speaking of the pilot, Ms. Alfonso commented, “we had done extensive pilots involving many thousands of consumers (prior to the nationwide launch).”
Test results from those pilots, according to American Express, showed that, on average, ExpressPay transactions are 63% faster than using cash. Market research with pilot participants also confirmed that consumers view convenience and simplicity of use as two of the major benefits. For merchants, benefits include reduced transaction time and increased spending relative to cash.
American Express had always promised that its full ExpressPay rollout would include multiple form factors. During the key fob pilots, consumer studies found that two-thirds of the respondents preferred the convenience of the key fob, while one-third wanted a card that could be carried in a wallet, primarily because a wallet is more protected than a set of keys.
In the nationwide rollout, the key fob – can be linked to the user’s American Express Card or preloaded with funds charged to Visa, MasterCard, Discover or American Express – is available however the company will concentrate its marketing efforts on the card portion of ExpressPay, said another AE spokesperson, Molly Faust.
Growing a contactless base through the successful Blue card
“What we’ve done is put the ExpressPay feature on a card already in the market,” said Ms. Alfonso. As card members apply for American Express Blue, or their cards come up for renewal, they’ll receive the new card with the ExpressPay contactless chip, she added.
“We are very pleased with ExpressPay’s momentum in the marketplace,” said David Bonalle, vice president and general manager of Advanced Payments for American Express. “Blue with ExpressPay will allow us to get more cards with contactless payment functionality into the hands of our customers nationwide, and help consumers and merchants reap substantial benefits in terms of speed and convenience.”
Of course, if an existing Blue customer can’t wait and wants the new card now, “American Express (will) reissue the card with the new feature on it,” said Ms. Alfonso.
The ExpressPay system conforms to the ISO/IEC 14443 standard, communicating the ExpressPay account information in Track 1/Track 2 magnetic stripe format and processing the purchase as a traditional credit or debit card transaction.