American Express invests in mobile payment company

Consumers who use American Express to handle their credit card debt may soon be able to use their mobile phones to make purchases on those accounts.

American Express recently announced it invested $19 million into a New York-based mobile phone payment company called Payfone, according to a report from the Wall Street Journal. The deal will allow consumers to link their cellphone number to an American Express prepaid or credit card.

“We are looking to go beyond the typical AmEx franchise to people who may not be able to utilize credit cards or charge cards or may not want to,” said Dan Schulman, who is in charge of American Express’ expansion into alternative forms of payment. “This is the first venture of many that we are looking at.”

The major lender, one of the largest in the U.S., hopes that by launching a mobile phone payment service, it will be more attractive to younger consumers, the report said. With this plan, American Express would expand its existing Serve program, which was designed to compete with similar online services.

A number of major financial institutions are now partnering with tech firms to launch mobile payment systems.

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