Amex Negs Digital Wallets To Build Its Own Checkout, Pairs With Stripe To Spread It Wide
Context & Ripple Effects
The checkout layer is up for grabs in early 2015. Google is pushing to expand Wallet usage through integrations like WePay wiring its Instant Buy API into merchants' flows, while the independent-processor side of the market is consolidating around Stripe — Balanced shut down and struck a transition deal handing its customers to its rival, and Kickstarter dropped Amazon Payments for Stripe weeks earlier.
Amex's move cuts against the wallet grain: instead of letting third-party wallets intermediate its cards at checkout, it is building its own checkout and using Stripe as the distribution rail to reach merchants. For a card network whose brand sits at the transaction, owning the button beats renting space inside someone else's wallet.
First-order effects
- Amex gains direct placement at online merchants through Stripe's integration base, rather than depending on wallet adoption to get its cards surfaced.
Second-order effects
- Wallet operators like Google lose a marquee issuer's enthusiasm for their format, raising the bar for the Instant Buy-style API integrations they are courting; meanwhile Stripe cements itself as the neutral rail both sides ride — the same position it inherited from Balanced's exit.
Third-order effects
- Checkout splits into two structures: network-branded checkouts distributed through processors, versus horizontal wallets seeking permission at the point of payment — with processors like Stripe (and, per Braintree's Extend tooling, PayPal's unit) becoming the platform layer loyalty and fraud services attach to.
The trend: Card networks are bypassing standalone digital wallets by building their own checkout experiences on top of neutral processing rails like Stripe.