Citi Adds a New Strata Layer

Citibank has been phasing out its legacy ThankYou and Rewards+ brands (see CardsFTW #106: New Card Season). Last week, Citi announced it would be migrating users of Citi Rewards+ (which closed to new applicants last month). 

William Smith

The new Citi Strata card earns:

• 5x ThankYou points on hotels, car rentals, and attractions booked on cititravel.com.
• 3x ThankYou points at supermarkets,  select transit and gas/EV stations, and an  eligible self-select category of your choice, including fitness clubs, select streaming services, live entertainment, cosmetic stores/barbershops/hair salons, or pet supply stores
• 2x ThankYou points at restaurants
• 1x ThankYou points on all other purchases.

This is a lot of detail, but it's way better than the old Rewards+ card, which was just 2 points at supermarkets and gas stations (with a $6000 limit).

One odd thing is that this no-fee card can only transfer points to some of Citi’s partners (Choice Privileges, JetBlue, and Wyndham Rewards), but you need a card with a fee (the Citi Strata Premier℠ Card or the Citi Prestige® Card) to access them.

Bluebird Has Flown: The Rise and Fall of Amex’s Prepaid Experiment

American Express has officially ended its Bluebird and Serve prepaid card programs. In a notice to customers, Amex announced that all Bluebird and Serve accounts will be closed by June 2026. This marks the end of a decade-long experiment in offering banking services to the “unbanked” and “underbanked” through prepaid cards. 

William Swainson

I was just wrapping up my time at Green Dot when Amex jumped into prepaid. I didn’t understand it at the time; the premium Amex brand and the reality of the low-to-middle income prepaid users didn’t seem to mix. Amex spent a lot of money on this effort over a long period to get to this end point.

This is the serve card I remember. I would have gone with Arthur Ashe.

Amex’s Prepaid Journey

Amex’s first step into the prepaid arena was in 2009, with the purchase of Revolution Money, a digital payments startup founded by AOL founder Steve Case. This gave Amex a platform for online peer-to-peer payments and stored-value cards. The first product built on this technology was Serve, a “next-generation digital wallet.” Serve accounts could be loaded via bank account, payment cards, or even Facebook, and every account came with a reloadable prepaid Amex card for in-store and ATM use. This product was targeted at cash and debit users, aiming to bring P2P payments and mobile money to the masses. This was followed shortly by a general-purpose Amex Prepaid Debit Card (wow, what a clever name!), built to compete with Green Dot and NetSpend by offering no activation or reload fees and no charge for online or retail purchases. (There’s only a $2 ATM fee after one free monthly withdrawal, a far cry from the notorious fees on cards like the old Kardashian Kard.) 

Jay Bleu. The checkbook must be inside the box.

In 2014, Amex rolled out Bluebird in partnership with Walmart, a reloadable prepaid account billed as a “checking & debit alternative” for Americans fed up with bank fees. Amex and Walmart positioned Bluebird as a tool for the “unhappily banked,” folks who may have a bank account but want a simpler, fee-free experience. Features included smartphone check deposit and online bill pay, with no minimum balance and no monthly, annual, or overdraft fees. Notably, Bluebird also supported paper check-writing; Amex even offered a Bluebird checkbook. The card was sold in Walmart stores (for about $5) and one could reload it for free at any Walmart register.

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Walmart was already offering the Walmart Prepaid Visa card (issued by Green Dot) and I didn’t understand why they would offer both products. While a high-spending clientele may want the benefits of Amex, I don’t think the LMI crowd did; they preferred the usability of Visa.

A few years later, Amex launched the Serve Cash Back card, touted as the first prepaid debit with 1% cash back on purchases. It had a $5.95 monthly fee (waived in a few states), essentially letting users “buy” a cashback perk. This was an unusual move (rewards are rare in prepaid land) and signaled Amex's attempt to differentiate Serve in a crowded market. In a strategic shift, in 2016, American Express sold the Serve technology platform and U.S. prepaid card operations to InComm, a major prepaid program manager. InComm took over program management and customer servicing for Bluebird, Serve, and Amex’s general prepaid products; Amex stayed on as the issuer and kept its name on the cards.

Industry observers noted that Amex was outsourcing the nitty-gritty of its prepaid business, much like Visa and Mastercard issuers, to gain efficiency. This move also underscored how Amex’s upscale brand fit awkwardly in a market largely serving moderate-income customers. (Fun fact: Dan Schulman, the Amex executive who spearheaded Serve, had left by then, and became CEO of PayPal.)

Following the InComm deal, Serve accounts started transitioning from the American Express network to Visa-branded Serve cards issued by InComm’s bank partners. In effect, Serve became a Visa prepaid card program, while Bluebird remained on Amex’s network. Amex’s direct role in prepaid was further diminished, though the Bluebird brand soldiered on (still in partnership with Walmart, but managed by InComm behind the scenes).

Following all of this? What a complicated story.

In a blow to Bluebird’s core value proposition, a new $3.74 fee was implemented for loading Bluebird with cash at Walmart, effective July 1, 2023. For years, free Walmart reloads were Bluebird’s killer feature (a favorite of travel-hacking enthusiasts who would load gift cards and pay bills). With Walmart now charging $3.74 per load, Bluebird lost a major advantage over other cards. Unsurprisingly, even the hardcore fans saw the writing on the wall after this change. Then other features started disappearing. In September 2024, Bluebird users were notified that sub-accounts, savings Goals, Amex Offers, and even the old check-writing capability would be discontinued.

And now, the end. Accounts will remain open through early June 2026 to give customers time to transition, but no new accounts are being issued. By June 3, 2026, any remaining funds will be returned to users by check, and the chapter will officially close on Amex’s prepaid experiment. 

Why Did Amex (and other big banks) Fail at Prepaid?

In the early 2010s, general-purpose prepaid cards were the hot new thing in finance (I mean, to the extent finance has a “hot new thing.”) Companies like Green Dot and NetSpend had spent a decade building this market, selling prepaid Visa and Mastercards on grocery store racks to millions of Americans without bank accounts. By loading paychecks or cash onto these cards, consumers could swipe and pay bills electronically like bank debit card users. Green Dot and NetSpend were the de facto “neobanks” of their era, albeit with a very different business model (one dependent on fees for card purchases, monthly maintenance, ATM usage, etc.). 

American Express saw this trend and wanted in, but as a bank (and a high-end brand), Amex approached prepaid with a different mindset. Bluebird and Serve were remarkably low-fee compared to many private-label prepaid cards. That consumer-friendly approach won Bluebird/Serve a loyal niche (especially among cost-conscious users and points hobbyists), but it also meant thin margins. Legacy prepaid providers made money precisely because their customers often paid $5 here and $3 there in fees. (I would note that, in our research at Green Dot, our users preferred to pay a $5 monthly fee and never have an overdraft fee, rather than the punitive fees on so-called free checking accounts.)

Amex hoped to profit mostly from interchange fees (the cut of transactions merchants pay) and from cross-selling other services, which required volume and engagement, not just fees, to make prepaid pay off.

It didn’t help that Amex’s network had acceptance limitations. Bluebird and Serve were on the American Express network (until Serve’s late switch to Visa), meaning they weren’t accepted at quite as many merchants as Visa/Mastercard-based cards. While Amex’s acceptance grew over time (it’s now 99% of Visa), in Bluebird’s early years, this was a slight disadvantage versus Green Dot or NetSpend cards that worked everywhere. Amex tried to compensate by layering on features. These made Bluebird feel more like a “bank account alternative” as advertised, but they also probably added cost and complexity.

Another good option: John Isner

During the years Amex was tweaking Bluebird/Serve, the prepaid card market was transforming. Players Green Dot and NetSpend continued to grow. NetSpend was acquired for $1.4 billion in 2013, and Green Dot pivoted to offering its checking accounts and banking-as-a-service. Those firms thrived by focusing on their core market: people without traditional bank accounts who were willing to pay fees for convenience and access to the prepaid cards provided. They also evolved with the times – Green Dot even launched its own online checking account (GoBank) and later a modern fintech-y banking app (GO2bank) in an attempt to stay relevant. In short, the “old guard” prepaid companies proved resilient by doubling down and innovating within the prepaid model.

Amex, by contrast, was always straddling a line: trying to attract the underbanked without tarnishing its upscale brand or cannibalizing its main products. In retrospect, Bluebird and Serve always felt a bit like side projects within Amex’s empire. When Amex handed over the backend to InComm, it was a sign that Amex was stepping back from any grand prepaid ambitions.

At the same time, a new wave of mobile-first “neobanks” emerged, like Chime (founded in 2013, by a former Green Dot colleague of mine, Chris Britt) and Current (2015), targeting the same consumer needs with slick apps and no-fee banking. Even big banks dipped their toes: JPMorgan Chase launched a digital banking app called Finnin 2018 to court millennials, and others like Wells Fargo and Capital One experimented with online checking offshoots. 

Enter the Neobank

Just as Amex’s prepaid momentum was stalling, a new generation of digital-only banks was rising. Chime launched in 2014 with a simple pitch: no fees, get your paycheck two days early, and manage everything from a mobile app. By the late 2010s, Chime was signing up customers at a blistering pace, reaching an estimated 12 million users by 2021 and over 22 million by 2024. Unlike prepaid cards that you buy at a store, Chime accounts are marketed as a tech-savvy lifestyle upgrade. Chime makes money purely from interchange on its debit card, not from monthly service fees or account fees. 

Alongside Chime came others: Square’s Cash App added a Visa debit card in 2017, turning a peer-to-peer payment app into a spending account for millions. By 2024, Cash App had 57 million active users, and 24 million had ordered Cash App Cards for in-store spending. Current began by targeting teens with a debit card, then pivoted to a full app-based checking account that reached around 4 million users by mid-decade. These fintech players proved adept at viral marketing, intuitive design, and offering features like instantly buying Bitcoin or stocks (in Cash App’s case) or no-fee overdrafts up to $200 (in Chime’s case) that appealed to younger consumers. They essentially outflanked what prepaid cards had been doing by offering a more modern, full-service banking feel, while still catering to the unhappily banked or unbanked.

Crucially, the tech-first neobanks and the legacy prepaid providers both succeeded in their own ways because they focused on one model and executed it well. Green Dot didn’t suddenly try to become a fancy credit card company; it doubled down on prepaid and later offered its infrastructure to power other brands’ banking products (Apple Cash, Uber’s debit, and so on). Chime didn’t try to launch a travel card or a mortgage business; it stuck to the basics of checking/saving and a slick app. Each knew their audience and delivered what was missing from the big banks’ offerings.

Why Big Banks Couldn’t Crack the Code

Given this backdrop, it’stelling that large banks like American Express and JPMorgan Chase couldn’t make their retail prepaid or digital banking experiments stick. Chase’s “Finn”, launched in 2018 as a millennial-focused mobile bank account, was shut down after only a year or so. Critics said Chase failed to differentiate it from the bank’s standard accounts; it was basically a repackaged checking account with a new UI, aiming at an audience that already had plenty of alternatives. There was also internal tension: a digital offshoot like Finn could cannibalize the mother ship, and it reportedly didn’t get full support within the organization. Big banks historically rely on their branch networks and established brand; launching a sub-brand to appeal to a niche (and presumably lower-profit) segment often ends up half-hearted.

Eero Saarinen

For American Express, Bluebird and Serve never meshed with the company’s core identity. Amex is known for charging premium annual fees for platinum cards, wooing affluent customers with points and perks, and maintaining an aura of exclusivity. Bluebird/Serve was the complete opposite play: no fees, target the masses, distribute in Walmart aisles. To Amex’s credit, the company put genuine effort into these products (they clearly tried innovative features and partnerships). But ultimately, the prepaid business’s economics and customer profile wereout of step with where Amex makes its real money. The fact that Amex kept Bluebird and Serve around for over a decade suggests they weren’t a flop outright, yet they never came close to dominating their market. Green Dot and NetSpend each had millions of active cards and profitable operations, while Bluebird and Serve were, at best, minor contributors to Amex’s gigantic revenue pool (American Express doesn’t even break them out in earnings reports).

Another factor is the technology and user experience. Neobanks like Chime and Cash App built their platforms from scratch in the smartphone era, allowing for faster development of new features (like instant notifications, in-app card controls, etc.). Bluebird and Serve, being tied to Amex’s infrastructure (and later InComm’s), may have been slower to evolve. By the time mobile banking was the norm, Bluebird’s app was just one icon among many, not particularly unique. The fintech apps also benefited from network effects and social sharing – for example, Cash App grew partly because it’s fun and viral to send money with a Cashtag. A prepaid card used mainly as a checkbook replacement doesn’t have that same buzz.

Finally, consider business incentives. Prepaid card firms and fintech startups live or die by the success of their one product, so they iterate constantly on making it better and acquiring more users. Big banks have the luxury (and curse) of many other profit streams. If Bluebird’s growth was underwhelming, Amex could shrug and focus on its booming Platinum card business instead. In essence, Bluebird and Serve never got the all-or-nothing attention that a startup would give its flagship app. As a result, they gradually fell behind the more focused competitors.

What’s Next?

As Bluebird flies off into the sunset (or rather, gets boxed up and shelved in 2026), the baton is firmly in the hands of those who specialize in this arena. Green Dot, NetSpend, Chime, Cash App, and Current all, in their ways, succeeded where Bluebird and Serve did not: by understanding their target users and playing a different ballgame than traditional banks. Amex’s prepaid venture taught the industry a valuable lesson: you can’t just slap a bank logo on a tech product and expect magic. Prepaid cards and neobanks might aim to give people alternatives to bank accounts, but the companies behind them operate on different wavelengths.

Ultimately, American Express’s effort to serve the underbanked was a noble bird that didn’t quite fly (sorry, couldn’t help myself).

CardsFTW

CardsFTW, released weekly on Wednesdays, offers insights and analysis on new credit and debit card industry products for consumers and providers. CardsFTW is authored and published by Matthew Goldman and the team at Totavi, a boutique consulting firm specializing in fintech product management & marketing. We bring real operational experience that varies from the earliest days of a startup to high-growth phases and public company leadership. Visit www.totavi.com to learn more.

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