In a bid to further expand its digital payment services, American Express ( AXP - Analyst Report ) or popularly known as AmEx, collaborated with Isis, the mobile commerce joint venture (JV) of U.S. telecom giants – AT&T Mobility, T-Mobile and Verizon Wireless.

The deal will allow American Express’ U.S. Consumer, OPEN Small Business and Serve Cards to be available in the Isis Mobile Wallet. The first Isis Mobile Wallet featuring these services will be launched in Salt Lake City, Utah and Austin, Texas later this year.

The collaboration will help AmEx to benefit from Isis’ merchant network to ensure a secure shopping experience. However, customers are required to upgrade their mobile with Near Field Communications (“NFC”) technology in order to avail this service. Subsequent to the roll out of this new service, a mobile device is all that a customer would need to redeem coupons and store merchant loyalty cards.

AmEx had already initiated the digital payments and commerce platform following a deal with Serve, an AmEx initiative for next generation technology that aids eCommerce through the products and services that the mobile and card companies develop.

The collaboration with Isis will further enhance the benefits derived therein and do away with credit checks or any kind of periodical payments. It is expected that this “tap-and-go” service will cater to an entirely new group of consumers, thereby increasing the customer base for AmEx.

AmEx customers who are already using the facilities of Serve will be able to use virtual wallet technology by Isis sometime later with no specific date mentioned by either party. Until then, it will continue offering its dynamic and unified digital platform to a wide range of customers.

AmEx has been upgrading its digital payment platform through strategic alliances, which is not only expanding the company’s card membership base but also helping it penetrate the unexplored markets and tap the upcoming opportunities in the field of e-commerce.

Isishad previously provided similar services to AmEx’s prime competitors MasterCard Inc. ( MA - Analyst Report ) and Visa Inc. ( V - Analyst Report ) . With regulatory restrictions remaining an overhang on the credit and debit card business these card giants are vigorously expanding into the prepaid cards, mobile banking and eCommerce space.

We retain our long term Neutral recommendation on AmEx. The company currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.