American Express recently announced that they’re selling the Serve platform that they developed to InComm, giving InComm distribution rights for the prepaid card platform. The reports are saying that the deal should go through sometime in the first part of 2018 (it may have even been completed by the time you read this).
So, if you’ve never dealt with Serve before, what do you need to know, and if you have, what does the trade mean for you?
Well, keep on reading and find out.
We’ll try to lay out all the pertinent details below.
American Express Serve
Serve is a reloadable pre-paid debit card. Most pre-paid cards are, essentially, “burners.” You use them until they’re empty, and then you throw them out. They’re handy for a number of reasons. The most obvious reason is that you don’t have a credit or debit card, but there are purchases that require you to hold a card, like a hotel room rentals, online orders and things of that nature. But there are plenty of reasons someone who carries a credit card or a debit card would need to use a pre-paid card. For instance, suppose you travel a lot, and you don’t like bringing all of your cards with you, or you want to make sure that your money is safe while spending with companies that require a credit card but perhaps have an iffy relationship with protecting customer data, or maybe you want to buy some Christmas gifts for the family and you don’t want them reading credit card bills to find out what you got them. Whatever the reason you might need them for, pre-paid cards offer convenience, privacy, and security where conventional cards might not. But their disposable nature generally limits their use in a number of ways.
By being reloadable, the Serve card lets you put more money into your account without having to go out and buy a new card. If you need fast cash, you can simply transfer money to the card. If your employer is going to pay you by direct deposit, the reloadable card means that you don’t have to give them new information every two weeks to a month. In any event, the reloadable nature of the Serve card just offers a few more options than you’ll get with the use-and-toss cards that wind up in the trash after they’ve been drained.
Can Serve Help Me Build Credit?
A secured card can help you to rebuild credit, but prepaid debit cards like Serve, even reloadable ones, generally will not. With a prepaid card like Serve, the company does not report your activity to the credit bureau. For some, this is one of the upsides of a prepaid card. In any event, don’t plan on using the Serve card to fix a poor credit score or establish credit if you do not have much of a record in the first place.
What Will Serve Cost Me?
There are prepaid cards out there that are… well, it might not be tasteful to say “predatory,” but some of them know that prepaid cards are popular among lower-income users, and they’re not above jacking up the fees to take advantage of that fact. But, Serve’s fees are generally pretty reasonable. You’re not going to be looking at fifteen, twenty percent payments just to keep your card full, nor will you be paying big fees to use ATM’s or to use your card to spend money in the first place. Across the board, the fees are pretty modest.
With the basic blue card, you have a one dollar monthly fee, which is waived in Texas, New York, and Vermont, fees going up to $3.95 for a reload, depending on retailer, and the ATM fee is just $2.50, unless, you use a MonjeyPass ATM, in which case there is no fee at all. This last fee applies across the board on all cards: If there’s no ATM operator fee, then you don’t pay anything at a MoneyPass machine. With the FREE Reloads green card, you have a $4.95 monthly fee (again, waived in New York, Texas and Vermont), and reloads are totally free at 45,000 locations, being CVS, Dollar General, Family Dollar, Wal Mart, Rite Aid and certain 7-Eleven locations. Finally, the silver Cash Back card has a $5.95 monthly fee, up to $3.95 for a reload, depending on the retailer. Other fees associated with the card come down to money transfers handled through third parties like Ingo Money and Ria, which vary, and foreign transactions, which come out to 2.7% after conversion to USD.
So, yes, overall, the fees that are involved with using the Serve card are pretty reasonable. It’s not difficult for companies to get away with charging you an arm and a leg just to use your own money, so it’s nice that Amex isn’t using the Serve card as an opportunity to nickel and dime their customers.
Who Are InComm?
Look up InComm on the internet and you’re going to find a bunch of prepaid card companies they’ve bought out or partnered with. As the economy becomes more and more digital, it stands to reason that companies like InComm will sprout up here and there in the prepaid debit ecosystem. Because here’s the thing: worrying about compatibility with digital money is kind of a pain in the neck.
By compatibility, we mean the whole process of worrying about where you can go to load your prepaid card, who’s going to accept it and so on. Maybe Amazon won’t accept your card, but eBay will, but Wal Mart and on and on. This leads some of us to carry a half dozen cards in our wallet at any given time, spreading our money out over various accounts. Then when we want to get cash out to pay the water bill, we have to drive to six different locations all around town just to get our money without having to pay any ATM operator fees, it’s just a lot of trouble, and InComm is working to bridge those gaps.
There may be concerns in some circles regarding non-competitive business practices and so on, but that’s still ways off. InComm is up against plenty of stiff competition at the moment, so there’s no reason to expect them to start engaging in shady business practices with existing customers and established prepaid card brands. In any event, if prepaid cards become too much trouble to carry, if they become too expensive, well, it’s not that hard to use Paypal, instead.
In other words, there’s probably nothing to worry about if you carry an American Express Serve card and want to know what’s going to happen now that InComm has bought the card out from American Express. InComm signed a deal with CardCash back in 2014, and the brand still carries on generally the same fees and prices they’ve been following for years.
Rebranding And The Future Of Prepaid Cards
For a long time, prepaid cards were regarded very much in the same light as, say, reverse mortgages and payday loans. Prepaid cards were seen as something that was used to bilk a few dollars out of America’s working class, who were pressed for time, money and energy, and needed a fast, easy solution, and were willing to put in a few extra hours at the job site in order to cover the additional fees incurred by these services. But, the economic realities of living in America are changing. At their root, there’s nothing inherently wrong with prepaid cards, nor is there anything wrong with the basic idea of a payday loan, for that matter. But it’s taken certain companies with a vision of the future to explore these markets in an ethical and responsible way.
As we move on to the 2020’s, it should be acknowledged that money doesn’t work the way it used to. There are millionaires today who, six years ago, were eating ramen and frozen pizza. But they got a prepaid card, put one week’s pay into bitcoin, and now they’re rich. There are teenagers out here getting their first job who have never touched a real live paper dollar. Money is digital now, and there is a very real need for companies like Amex and InComm who can make electronic payment options available to everyone, whether or not you have a bank account.
Are Prepaid Cards A Permanent Solution?
Put it this way: Serve charges you a dollar a month, and if you run out of money, they just close your account. When you sign up at a bank and you run out of money, they charge you five dollars a month for not having any money in your account. The relatively free market of the prepaid debit card is, in many ways, considerably more honest, transparent and fair than many conventional means of managing your finances. As Americans move more and more to a completely digital approach to managing money, working with private companies like Paypal and Stripe, they are creating a marketplace where we don’t have to support groups that take advantage of the customer just because they’re the only bank in town. That’s not to say that banks are a dying industry, far from it, but the fact remains that they’re not the only option available anymore, as they once were.
That said, prepaid cards can be a somewhat more volatile market than other types of accounts. If you have money in Paypal, you can generally assume that Paypal is not going to be bought out by another company anytime soon. But prepaid cards get bought by different companies all the time, and you can’t always be sure of what’s going to happen to the money you have in your account when that happens.
The best advice we have for you on this front is: Try and get a Paypal or Stripe account if you don’t have one already, and focus on using prepaid cards for short-term expenses. A prepaid card can be a handy way to keep your gas bill paid or book a hotel room when you’re out of town on business. As a way to store all of your liquid assets, there are a lot of limitations that are inherent to the business model. Before signing up for any prepaid card, however, you should do your research. Make sure that they treat their customers fairly, and keep an eye out on any acquisitions or partnerships they’ve recently signed up for.
All of this being said, Serve is probably one of the best-prepaid cards on the market, and there’s no reason to think that that won’t remain true under InComm’s management. InComm has a strong track record with the other cards and account systems they manage and tend to practice a “don’t fix what isn’t broken” approach to handling their new acquisitions and partnerships.