The Person to Person (P2P) payment networks used by those buying and selling bitcoins include PayPal and Dwolla.
American Express today introduced Serve to compete in this space.
- Add and withdraw funds using a linked bank account (ACH). Adding funds via ACH takes about 3 to 4 days to complete. No fees. Serve charges a $35 fee if the bank returns (denies) the ACH withdrawal.
- Serve’s Point of Sale “prepaid card” is provided for free. There are no fees for use, including “cash back” transactions. The card can be used to withdraw at an ATM. The first ATM withdrawal each month is free. Additional withdrawals are
$1.50 $2.00 each.
- Withdraw by check is an available option. $5 per withdrawal.
- Add funds using credit card and debit card. Serve subtracts a fee: 2.9% fee + $0.30 for adding from a credit card (fees waived until September, 2011). A credit card issuer may also charge a “cash advance” fee. Funds added are available for spending immediately.
- Receiving payments from another Serve user incurs a 2.9% fee + $0.30 (also waived until September, 2011) if the P2P transaction is marked as a “purchase”, otherwise there is no fee for transactions marked “personal”.
- There are no fees for sending money to another Serve user as a “personal” transaction if funds are drawn from balance or linked bank account (ACH), otherwise the 2.9% + $0.30 fees are subtracted when funds are added (waived until September, 2011).
- Limited to U.S. customers and banks only for now. International payments are planned at a future time.
Summary: About the only advantage Serve offers over PayPal is that through September, 2011 funds can be added using a credit card at no charge. Those who get cash back, points, airline miles or some other perk through a loyalty program with their credit card issuer will like this.