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American Express Launches Its Own PayPal Alternative

The launch comes as Google, PayPal, Visa and MasterCard compete to own the Buy button on websites and apps.

American Express
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

The checkout pages on shopping sites are getting more crowded, so American Express is creating its own real estate.

The credit card company today is introducing Amex Express Checkout, an alternative payment method its card members can use to more easily check out and pay on partnering websites and apps from merchants such as Ticketmaster, Newegg and Warby Parker.

American Express cardholders enter their usernames and passwords from their online Amex accounts and the tool auto-fills their payment information into the billing and shipping fields.

The move comes as tech companies like Google and PayPal and credit card competitors Visa and MasterCard are competing to own the Buy button on websites and apps. As e-commerce continues to grow significantly faster than offline retail, these companies are vying to make checking out easier on shopping sites, whether on desktop computers or mobile phones.

The competition is especially hot in mobile commerce where the nuisance of entering payment, billing and shipping details on small screens leads to lower purchase rates. Even Apple is trying to solve this problem, with the launch last fall of its Apple Pay buttons for mobile apps.

American Express

The American Express payment tool has several differences from other services. For one, shoppers can use their existing American Express online account credentials so the credit card company doesn’t face the hurdle of getting shoppers to sign up for another account.

For merchants, there could be some appeal in the fact that American Express will pass along customer information to the retailer if the customer chooses to do so. Several competing services don’t offer the merchant the opportunity to convert a shopper that uses one of these alternative payment methods into a new customer account.

The new payment tool is more restrictive than other options. While competing purchasing tools allow shoppers to choose from different brands of credit cards and debit cards — and in PayPal’s case, bank accounts too — Amex Express Checkout only allows for payment with an Amex credit card.

American Express will face challenges. First, it’s going to have to convince tons of merchants to add the button to their checkout pages for shoppers to get used to seeing it and comfortable using it. To that end, it has inked a deal with the payments startup Stripe so that the small- and mid-sized businesses that use Stripe can easily integrate the new American Express payment method in just a few steps.

There’s also the PayPal issue. On checkout pages where Amex Express Checkout competes with PayPal, shoppers may choose the payment button that’s been around a lot longer.

But American Express is no technological slouch and its marketing machine is powerful. It plans to launch a large marketing campaign to promote the new payment option and offer a $10 credit for first-time users. If a shopper doesn’t already have a credit card stored with an online retailer, the payment option he or she uses is up for grabs. One more competitor just entered the ring.

“We’re not a company to throw spaghetti at the wall or create a me-too product,” said Leslie Berland, EVP of digital partnerships and development. “We watched and we learned.”

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