American Express Co. is launching a $100 million fund as a new multiyear program designed to help accelerate the company's digital transformation, as it tries to add consumers in new geographies and attract younger generations.

American Express, the biggest credit-card issuer by purchases, is seeking for early state start-ups that are focusing on loyalty, mobile and online payment management, fee-based services, security and fraud detection and data analysis. No specific target is named at this point.

The New York-based company established an office in Silicon Valley to tap into local start-up talent.

Amercian Express is looking to hire a director for digital payments to lead the company's newly created Digital Payments team and help the company capture the growth and opportunities in the digital and mobile payments space. 

Harshul Sanghi, hired in September from Motorola Mobility Ventures, will manage the planned investments as managing partner of American Express's enterprise growth group, a new business unit focused on expanding alternative mobile and online payment services beyond the traditional card and travel businesses.

"The payments industry is undergoing a fundamental change as the very nature of commerce is redefined," Sanghi said. "Strategic partnerships with local start-ups will allow American Express to leverage emerging technologies."

Though mobile shoppers are still a minority among U.S. consumers, they have become a significant minority. More than 33.3 million U.S. consumers engaged in shopping-related activities on their mobile phones, among them, 2.3 million, or 7 percent have made a purchase on their devices, according to the "2011 Mobile Consumer Report" conducted by research firm Experian Simmons.

Competition in the digital commerce space is heating up as purchasing activities move increasingly online and more people use their mobile devices to shop. Rivals Google Inc., Visa Inc., MasterCard Inc. and AT&T Inc. are all trying to take their cut.

Google is partnering with MasterCard, Citigroup Inc. and Sprint on the new mobile wallet service it rolled out this September, which allows consumers to tap their phone against a compatible card reader to complete the purchase.

In April, Visa invested in Square, a mobile payments start-up founded by Twitter co-founder Jack Dorsey, and on Wednesday, AT&T and Intuit launched GoPayment to compete with Square.

Setting up the "venture" fund is not American Express's first move towards the mobile-payment field. In April, American Express took a stake in Payfone, a mobile payment processing company. Four months later, the company partnered with Verizon Wireless and Sprint Nextel Corp. to get Serve digital wallet run on the carriers' devices.

Amercian Express reported last month a 13 percent jump in third-quarter profit to $1.2 billion, from $1.1 billion a year ago. The increase largely reflects strong growth in cardmember spending.

Shares of American Express closed at $49.19, down $2.15, or 4.19 percent in Wednesday trading.