Media & Entertainment

Amex Negs Digital Wallets To Build Its Own Checkout, Pairs With Stripe To Spread It Wide


As Apple continues to build out Apple Pay for transactions in retail stores, one of its key partners is making a move to own the payment experience more directly online.

American Express today is launching a new feature for cardholders called Amex Express Checkout, which it says will let them pay for goods and services on web, mobile and in apps with a single password that cardholders already have and use to access their Amex accounts — not unlike PayPal’s password-based checkout option.

Live in the U.S. starting today with a select group of retailers that includes Burberry, the Gap, Hulu, Ticketmaster and Avis Car Rental, Amex is also announcing a new partnership with Stripe to help the new feature pick up critical mass with more online businesses.

The financial terms of the deal between Stripe and Amex are not being disclosed. However, Amex confirmed to me that it is a backer of the payments startup, something that doesn’t appear to have been reported before, so it seems to stem out of that strategic investment.

According to Leslie Berland, Amex’s EVP for digital partnerships, one reason Amex decided to develop its own checkout service was because it was finding that many people weren’t using the wallets that are available today. Talking to merchant partners and consumers, “We identified many gaps and themes,” she told TechCrunch. Those included the hurdle of registering for the wallets in the first place.

The solution Amex went for was to tap into something that their consumers already have and use. Today, Amex offers its cardholders — there are 100 million globally, with a large proportion of them in the U.S. — the ability to log in online to access accounts, make payments and so on. It’s those same passwords that are being used to authenticate users in the checkout process. By opting for those already well-used passwords, “we recognised that we could do something that our competitors couldn’t do,” she added.

Amex Express Checkout_Animated GifOf course, there are other reasons why Amex would want to own its checkout experience. For one thing, it reinforces a brand with the customer and makes it more likely that you will use Amex for a transaction. That’s in contrast to a digital wallet that will let consumers store a number of options that they can use to pay for something.

Another is that it potentially lets Amex tweak and develop the experience of checking out, meaning that they can add more features or upselling into other services alongside the payment.

But there is also something somewhat counterintuitive about using the same password for two different services: it seems to run against a lot of what we’re told are good practices online, where you should always think of unique passwords for different services to help keep your accounts secure. Amex has a couple of answers for why in this case simplicity is the better option.

The information is sent in an encrypted way, with card numbers sent in a tokenized format, meaning the number can be only used on the site in question, for that specific transaction. Amex also offers a guarantee to cardholders to automatically refund any unauthorized transactions.

While Amex has signed up a small group of merchants to kick off the service — the full list provided included Burberry, Warby Parker, Gap Brands, Hulu, Tory Burch, Newegg, The Wall Street Journal, Ticketmaster, Avis Car Rental, Cole Haan, BarkBox, Ledbury, Sabon and 1-800-FLOWERS.COM — it’s also going for a bigger long-tail play by working with Stripe to create an automated integration. Merchants that already use Stripe’s API can effectively click a box to add an extra integration for the Amex Express payment option.

While this is a sign of how Amex doesn’t want to take too much of a backseat to other big platform players in the new age of electronic payments, Berland also makes clear that the company is not rejecting its partners in those developments, either.

The name of the game seems to be to be everywhere, and in any form that its customers may want to use.

“We’re partners with Apple Pay and our customers love Apple,” she said. “What they are doing at the point of sale is very exciting and we want to be a part of it. And when we talk more broadly we are comfortable and excited to be with all wallets, not one exclusively. We will have to see how merchants integrate them and what consumers want. For us it’s all about differences and differentiation in the future.” 

Amex will also be offering merchants a direct API if they are not Stripe users to integrate the service.

Berland also says that the company is currently working on the next phase of the rollout, which will include taking Amex Express international.

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