American Express notified users of its Serve prepaid debit card of some upcoming changes that may limit functionality for some cardholders, while bringing the service more in line with its other free debit card services. According to an e-mail sent to existing cardholders, Serve accounts will soon restrict funding sources to a total of three external accounts. In addition, cardholders will only be able to use a single source from each of three categories: bank account, debit card, and credit card. Cardholders also have fee-free access to cash through the MoneyPass network of over 22,000 ATMs worldwide. Out-of-network withdrawals will incur a $2 processing fee, in addition to transaction charges assessed by ATM operators.

However, Serve cardholders also learned that their accounts will gain "pass-through" insurance from the FDIC. American Express will sweep Serve deposits into custodial accounts, maintained by either Wells Fargo Bank or American Express Centurion Bank. With federal coverage for up to $250,000 in deposits, American Express eliminates a common concern of debit card critics who point out that many prepaid debit cards on the market lack the consumer protections that retail banking customers often take for granted.

American Express uses a similar custodial account process with its other prepaid debit card accounts, including the Bluebird brand it operates in conjunction with retail partner Walmart. The company has also added bill payment and direct deposit services to both Bluebird and Serve over the past year. While Bluebird accounts include check deposits at Walmart locations and with a smartphone app, Serve accounts focus on person-to-person payments using e-mail or social networking connections.

With no fees for deposit and withdrawal transactions available in person, online and through ATMs, American Express has aimed to capture more market share from "unbanked" and "underbanked" consumers, while developing an alternative for customers of banks that have started charging for previously-free checking accounts. Company officials have also stated that they review debit card activity to determine whether customers may qualify for its line of traditional charge cards.