American Express Wants to Be Your Banker

When Kanye West raps about the need to “American Express myself,” it’s a fair bet that he’s not talking about shopping at a Walmart. And yet, defying decades of upscale marketing, American Express has partnered with Wal-Mart Stores on its newest product, a prepaid debit card, Bluebird, that’s now on sale in 4,000 outlets nationwide. Customers can add money to Bluebird at Walmart stores or online and use the card anywhere AmEx plastic is accepted. It’s targeted mainly at the 68 million Americans the Federal Deposit Insurance Corp. defines as “underbanked” or “unbanked”—a demographic very different from the customers AmEx has courted for decades with stylish ads showcasing luxury pursuits.

AmEx has calculated the gains are worth the risk to its gilded brand. If Bluebird proves popular, it won’t just capture more swipe fees for AmEx. It will also accelerate a remarkable, and largely overlooked, shift: American Express is no longer just a charge-card company. AmEx has become a bank—offering a growing list of services that now includes savings accounts, certificates of deposit, direct deposit, bill payments, free ATM withdrawals, and instant person-to-person payments. “The company has undergone a stealth kind of transformation to become more relevant in a digital economy,” says Guggenheim Securities analyst David Darst. It’s “better positioned now for the emergence of the online commerce environment.”