Serve article (Bloomberg)

[Craig]

On Serve and the (failed?) attempt of AMEX to enter the prepaid space.

http://www.bloomberg.com/news/articles/2016-01-20/amex-chief-dismantles-his-laboratory-for-serving-not-so-wealthy

 

[knick1959]

Very interesting. Thanks for sharing. It would have been more interesting for them to list the 5 debit card companies with MORE market share than Amex. I've got 2, maybe 3 in mind. But an official list might have been helpful. Something to research (more) tomorrow!

 

[notwealthy]

This is particularly sad because there are *actually* some underbanked people out there who would benefit from Serve having the hands-down best interface and ease-of-use for prepaid systems.
Anyone else notice that Amex has been shrinking a lot lately? (BB/serve, FIA Amex, Costco to name a few) I wonder what this means of their future...

 

[PghRocks]

This is particularly sad because there are *actually* some underbanked people out there who would benefit from Serve having the hands-down best interface and ease-of-use for prepaid systems.
Anyone else notice that Amex has been shrinking a lot lately? (BB/serve, FIA Amex, Costco to name a few) I wonder what this means of their future...

I disagree that these prepaid accounts can in any way benefit the underbanked. They are just another way to exploit the poor and keep them in a never ending cycle of debt via the fees charged, its essentially a poor tax. Do some research on how expensive it is to be poor for further explanation. Pre-paid debit, check cashing placces, etc, should all go die.

I love when people (not you specifically) talk about how Serve was not used as intended. First off, we all did use it as intended. It was set up as an account to load with money and pay bills - anyone not do that with their Serve? We all followed the rules as they were laid out until AMEX decided to change those rules. The only other intention was for Serve to be profit center milking very poorest in our country, I think that's a bad intention, so I'm glad so many people took advantage of it.

 

[italdesign]

I wonder if MS'ers contributed to the failure of Serve. Obviously we aren't responsible for its stagnant market share, but the way we used it was unprofitable according to FM (that they make money from swipe fees, but we primarily pay bill). I can see that their profit could be higher without us.

 

[falconbeach]

I disagree that these prepaid accounts can in any way benefit the underbanked. They are just another way to exploit the poor and keep them in a never ending cycle of debt via the fees charged, its essentially a poor tax. Do some research on how expensive it is to be poor for further explanation. Pre-paid debit, check cashing placces, etc, should all go die.

I love when people (not you specifically) talk about how Serve was not used as intended. First off, we all did use it as intended. It was set up as an account to load with money and pay bills - anyone not do that with their Serve? We all followed the rules as they were laid out until AMEX decided to change those rules. The only other intention was for Serve to be profit center milking very poorest in our country, I think that's a bad intention, so I'm glad so many people took advantage of it.

I disagree. The underbanked could fairly easily avoid fees just as we could have with regular use. I believe that there's a benefit to the impoverished to limit the amount of cash they have on hand. And while I agree Serve was not set up to be a charity for the poor, they weren't as exploitative as the places you mention (check cash, pre-paid debit).

To address your second point, I also believe that there's a fine line between what's available and the spirit of the law. Just because a benefit or perk exists does not mean everything is allowed. McDonald's offers unlimited refills, but loitering for hours to drink as much soda as possible is not an intended use, though allowed under the rules. People are free to "stick it to the man" if they feel companies are being exploitative, but then there should be no surprise when these same companies change policies to protect their own interests.

We all have different perspectives of this hobby so what resonates with one person might not resonate with another.

 

[PghRocks]

I disagree. The underbanked could fairly easily avoid fees just as we could have with regular use. I believe that there's a benefit to the impoverished to limit the amount of cash they have on hand. And while I agree Serve was not set up to be a charity for the poor, they weren't as exploitative as the places you mention (check cash, pre-paid debit).

To address your second point, I also believe that there's a fine line between what's available and the spirit of the law. Just because a benefit or perk exists does not mean everything is allowed. McDonald's offers unlimited refills, but loitering for hours to drink as much soda as possible is not an intended use, though allowed under the rules. People are free to "stick it to the man" if they feel companies are being exploitative, but then there should be no surprise when these same companies change policies to protect their own interests.

We all have different perspectives of this hobby so what resonates with one person might not resonate with another.

Please re-read your second sentence, do you not see how condescending it is?

So on the whole, if people more responsible they wouldn't be so irresponsible? Yeah that's nice, it's also a dream world where if everyone just bootstrapped harder there wouldn't be poor people to begin with.

If the underbanked were financially savvy enough to avoid fees, then I bet that they wouldn't be underbanked in the first place. Serve and all the other (and apparently more popular) cards like it are set up on the basis that many poor people cannot manage to avoid fees, marketed to these people - which is why wal-mart, family dollar, and dollar general, and then used to exploit the meager earnings of the poor one fee at a time. And when the original fees weren't high enough they reissued the cards with new monthly fees and load fees.

Listen to the recent 99% Invisible podcast on BoA and the first credit card, cc are designed to trick people, its in their nature. Pre-paid debit (Serve is in fact a pre-paid debit card, it says so on the website) is just the latest iteration of this. From an ethical standpoint, there is no justification for this pre-paid debit industry to exist. Anything that falls from it is poison fruit. Therefore, is no high-ground to claim "lack of intended use," the intended use was a bad thing.

Your second point is half a defense of the self-legitimizing nature of the power, in that the party in power can act it in interest and "hey buddy, that's just business" but if the party not in power does it then that's "taking advantage." The other half is remarking on people's "surprise" which is a advocating for the "you shoulda known, if you were smart like me, that bad things would happen" branch of pessimism. It's a philosophy that is condescending and worthless. It provides no value to your life other than those moments where you get to tell others 'I told you so, what did you expect to happen." So you're right, I have different perspective on these things.

 

[knick1959]

Please re-read your second sentence, do you not see how condescending it is?

I don't have strong feelings one way or the other about this. But I'm trying to see your angle and I'm not getting it. I'm not the OP. But I don't see that his second sentence is all that "condescending". My perception is that you've got personally involved in something that has tweaked your objectivity. But that's just my perception.

Of all of the debit cards I've checked out, and I've been doing some heavy, heavy reading as of late now that I do not have access to Serve/BB, the AMEX offerings were the fairest and lowest-to-no-est fee cards that exist. And, as is everything in American life, it's a choice to get and use one. Where is the evil that you are seeing?

Serve fees seemed to be easily avoided with a $500 a month deposit. Even my low-pay son could have his paycheck deposited and avoid a fee. Then use it for normal spend. Sure, he could screw that up. He screws up with cash anyway (this is the son I'm trying to help with his credit score, in another thread. He's doing much better). There IS a niche for the Serve-based products. It may not be profitable. It may not be available to many of us, now. And it may not be used responsibly by everyone. That doesn't make it evil.

 

[PghRocks]

I don't have strong feelings one way or the other about this. But I'm trying to see your angle and I'm not getting it. I'm not the OP. But I don't see that his second sentence is all that "condescending". My perception is that you've got personally involved in something that has tweaked your objectivity. But that's just my perception.

Of all of the debit cards I've checked out, and I've been doing some heavy, heavy reading as of late now that I do not have access to Serve/BB, the AMEX offerings were the fairest and lowest-to-no-est fee cards that exist. And, as is everything in American life, it's a choice to get and use one. Where is the evil that you are seeing?

Serve fees seemed to be easily avoided with a $500 a month deposit. Even my low-pay son could have his paycheck deposited and avoid a fee. Then use it for normal spend. Sure, he could screw that up. He screws up with cash anyway (this is the son I'm trying to help with his credit score, in another thread. He's doing much better). There IS a niche for the Serve-based products. It may not be profitable. It may not be available to many of us, now. And it may not be used responsibly by everyone. That doesn't make it evil.

I didn't count the "I disagree" as a sentence, that is my fault. I meant the third sentence, that basically says poor people shouldn't have too much cash around. I do believe this is condescending because it carries the implication that the poor are poor because they irresponsibly spend whatever money is laying around when study after study shows that the poor are poor for more complex and exploitative reasons than that.

To your other points - Being the fairest exploitative practice, makes you just that.

As for choice, having access to a debit card number is only a choice in the philosophical sense, in modern society its a practical requirement. (just like cell phones, and for many people, cars, but that's another conversation) If you don't believe me, try getting on without one.

Sure, there is a niche, but that niche was created by those offering the solution. Here's how it works - the poor have been systemically excluded from the banking system because they're poor ,while with the advent of the internet has never made access to banking more important. Then some company comes along and offers them a "solution" that doesn't carry the legal protections of an actual bank account and will help keep them poor through fees to access their own money. This company has a fancy name brand and sells themselves like they really going to help their customers. This is more akin to a gang running a protection racket (they create a niche too by being the own problem they offer to fix, for a fee, of course) than it is to being virtuous, wealth-creating capitalism.

If you've just accepted this is just how it goes in life, then fine, but I don't.

 

[knick1959]

If you've just accepted this is just how it goes in life, then fine, but I don't.

And still it is.

What fees are inflicted upon a less affluent user of a Serve card? I never once paid a fee for a BB card (I suppose the initial setup was a fee). I mean, if they don't plan on meeting the 500 deposit once a month (Serve OneVIP), then the idea that they need one of these cards at all seems non-existent.

Again, this isn't my fight. I'll leave this with whatever you answer. But I'm still not convinced. I do now see the legal-protection downside to debit card use, thanks for that. But living on the margins means there is much less to protect. I'm not being "condescending", but realistic. Purchase protection would be a thing to consider ... you don't get that with debit.

 

[falconbeach]

I didn't count the "I disagree" as a sentence, that is my fault. I meant the third sentence, that basically says poor people shouldn't have too much cash around. I do believe this is condescending because it carries the implication that the poor are poor because they irresponsibly spend whatever money is laying around when study after study shows that the poor are poor for more complex and exploitative reasons than that.

To your other points - Being the fairest exploitative practice, makes you just that.

As for choice, having access to a debit card number is only a choice in the philosophical sense, in modern society its a practical requirement. (just like cell phones, and for many people, cars, but that's another conversation) If you don't believe me, try getting on without one.

Sure, there is a niche, but that niche was created by those offering the solution. Here's how it works - the poor have been systemically excluded from the banking system because they're poor ,while with the advent of the internet has never made access to banking more important. Then some company comes along and offers them a "solution" that doesn't carry the legal protections of an actual bank account and will help keep them poor through fees to access their own money. This company has a fancy name brand and sells themselves like they really going to help their customers. This is more akin to a gang running a protection racket (they create a niche too by being the own problem they offer to fix, for a fee, of course) than it is to being virtuous, wealth-creating capitalism.

If you've just accepted this is just how it goes in life, then fine, but I don't.

My point about cash is not actually regarding their ability/responsibility towards spending. Cash on hand is very dangerous especially for the poor. I've worked with members of the population where it's safer for them fiscally and physically for them not to have cash especially if they do not have a bank. A lot of problems can crop up when cash is out. Your point about having access to a debit card is actually one I agree with which is why the underbanked benefit most from something like Serve.

I also wasn't trying to be condescending about exploitation of benefits. My perspective is to try to work with entities/companies/people with respect and a baseline level of trust. If Amex hasn't violated that trust, I have no reason to try and exploit my relationship. On the other hand, if I go ahead and push the limits of the relationship, I am not surprised nor do I feel validated/righteous that Amex has wronged me.

It does appear we have differing views on how to validate our actions and I appreciate you taking the time to explain your point of view.

 

[PghRocks]

Knick & Falcon - As much as I'd like get you guys to see it my way, I don't think I can explain my point better than I have. So I agree that we're just not going to look at this the same way, and that's ok.

 

[goodMXguy]

I wonder why Serve was not profitable for Amex? The fact that they had so much cash flow could have helped them in many ways (I would think). Also, Serve was helping other CC companies to gain costumers, but those costumes were not always in to stay but to churn CC which in turn may hurt their competition. I left cash in my serve account for payments such as mortgage, Etc. The companies that got paid had to pay some fees to amex no? If so, that would mean that was extra income for them.