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American Express Co. (AXP - Free Report) (AmEx) announced the alliance of its full service reloadable prepaid account – Serve – with Wal-Mart Stores Inc. (WMT - Free Report) . Operational since 2011, Serve is AmEx’s next generation technology that aids eCommerce through the products and services that the mobile and card companies develop.

Accordingly, about 4,100 Walmart stores will now offer American Express Serve digital wallet, which will be sold for a nominal price of $1.95 and a monthly fee as low as $1.00. These stores will also serve as stations for reloading cash in the Serve accounts, overall adding more than 19,500 refill locations across the US. Primarily participating stores include Walmart, CVS/pharmacy of CVS Caremark Corp. (CVS - Free Report) and 7-ELEVEN, making AmEx Serve the largest reloading network in the peer group, according to the Aite Group.

The latest alliance with Walmart extends AmEx’s leadership into the rapidly growing person-to-person (P2P) mobile payment platform. While AmEx’s Bluebird prepaid card for Walmart customers are already showing positive results, the Serve accounts will further expand the card payment processor’s retail clientele by adding over 70 million US residents, who are underbanked and unbanked, to the company’s network.

With the help of Serve, Walmart can now empower itself with an inexpensive digital wallet, which will enable its customers to refill mobile minutes, pay bills and purchase products and services through their mobile phone accounts as well as withdraw cash from ATMs freely. This kind of high-speed payment solution not only connects AmEx with its merchants but also complies with the next generation needs, particularly for those who are side-lined from the conventional financial system.

We believe such efforts are helping AmEx improve its operating leverage and reduce time-gap to reach out to its merchants. These are also crucial for maintaining its competitive strength against arch rivals, such as MasterCard Inc. (MA - Free Report) , Visa Inc. (V - Free Report) and Discover Financial Services (DFS - Free Report) , in the card industry. Hence, such collaborations in the growth markets and diversification into eCommerce are crucial for AmEx in order to expand its revenue base.

While AmEx, Visa, MasterCard and Discover Financial carry a Zacks Rank #3 (Hold), CVS Caremark bears a Zacks Rank #2 (Buy) and Walmart holds a Zacks Rank #4 (Sell).

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