American Express may announce on Wednesday it is investing in mobile phone payment company, Payfone. The credit card giant will be the lead investor in a $19 million round of financing secured by the New York-based start-up. Besides the credit card company, Payfone has attracted some big name investors including Verizon Communications and RIM.
American Express is stepping away from its traditional approach of tying new services to its own credit cards. Payfone will use an AmEx-based payment platform to give customers a digital account attached to a credit card or a prepaid card. The credit card or prepaid card is not tied to AmEx and can be obtained from any bank or prepaid card service. Customers can link this payment account to a unique mobile phone number for on-the-go payments.
The underlying platform powering this payment system was recently acquired by American Express when it purchased alternative payments provider Revolution Money last year. Introduced under the name Serve, this platform can expand internationally since it uses credit cards from any provider and not just American Express. AmEx is used widely in the US, but not so much internationally.
[Via WSJ]