It sounds like they will initially be competitive with PayPal. However, EVERYTHING that American Express does is more costly than alternatives. For their credit cards They charge a merchant a higher percentage per transaction than any other credit card and they still cling to the outdated concept of charging an annual fee to card holders. Based upon their history, I am skeptical about this service remaining competitively priced. This will go on my "we will see" list.
I also do not see anything that will kill PayPal.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin