Bluebird, the novel American Express-Walmart joint venture, will soon offer its customers the ability to write checks from their accounts, Alpesh Chokshi, president of global payments for American Express, told Bank Innovation Friday.
Chokshi described Bluebird as epitomizing “the power of mobile,” so why take a step back into the old-fashioned world of checks? The short answer might be that the offering will help Bluebird compete with Green Dot’s GoBank, another startup aimed at Gen Y and the underbanked.
Bluebird, which American Express and Walmart launched last October, mimics the offerings of traditional checking accounts, but, said Chokshi, with far fewer fees.
Why do Bluebird’s customers, who are steeped in the world of mobile, need a throwback item like checks? “Not everyone accepts cards,” said Chokshi. “For example, you can’t use a card to buy Girl Scout Cookies.”
During American Express’s earnings call last week, CFO Daniel T. Henry, when speaking of revenue targets, said, “I think the early returns that we’re seeing on Bluebird in the reloadable prepaid space is another example where we think we can be successful.”
Chokshi backed up this claim with some solid numbers:
- Approximately 80% of Bluebird enrollees are new American Express customers.
- Approximately 45% of Bluebird users are under age 35.
- Majority of money spent is outside of Walmart’s footprint.
- Approximately 15% of money loaded onto Bluebird accounts is via direct deposit.
The last item is further evidence that Bluebird users are treating the product like a traditional checking account, depositing paychecks directly into the account, Chokshi said. Bluebird is taking a small step back into the quaint world of checks (Brett King predicts the last consumer paper check will be written in the year 2018) in order to keep pace with GoBank and Movenbank, another banking startup. The race for the mobile-savvy Gen Y customer is on.