UPDATE 2-American Express taps Sprint exec Schulman

* Schulman to head mobile, online expansion

* Sprint shares fall as much as 3.8 pct

* American Express shares fall over 2 pct (Adds analyst comment on Sprint, share prices)

NEW YORK, July 21 (Reuters) - American Express Co (AXP.N) has appointed Daniel H. Schulman, president of No. 3 U.S. mobile operator Sprint Nextel Corp's (S.N) prepaid group, as group president of enterprise growth.

Sprint shares fell as much as 3.8 percent after the news as investors worried about the company's prospects given that it is depending for growth on customers who prepay for phone calls.

"He's arguably the top executive in the prepaid market so you're losing talent there. People may read into it as a negative on how Sprint's prepaid business is performing. I don't think that's the case," Pacific Crest analyst Steve Clement said of Schulman.

After falling as low as $4.53 on New York Stock Exchange, Sprint pared losses to trade at $4.60 late Wednesday afternoon.

Schulman was previously the founding chief executive of Virgin Mobile USA, which Sprint bought in 2009. Earlier this year he reorganized Sprint's prepaid business to target different market segments.

In the newly created position at American Express, Schulman will be responsible for the company's global strategy to expand its mobile and online payment technology. He will also be responsible for the mergers and acquisitions unit, American Express said on Wednesday.

He will be a member of American Express' business operating committee and will report to Chief Executive and Chairman Kenneth Chenault.

American Express, like rival credit card processing networks Visa Inc (V.N) and MasterCard Inc (MA.N), needs to develop new technology to fuel future revenue growth. Its opportunities for traditional growth are relatively limited, especially in the United States, where most consumers already use credit and debit cards.

American Express bought the alternative payments network Revolution Money in January as part of its efforts to develop new payment technologies. Schulman will also oversee Revolution Money in his new role.

American Express also said on Wednesday it had appointed former AOL (AOL.N) Vice Chairman Ted Leonsis to its board of directors. Leonsis was the chairman of Revolution Money and has been an adviser to American Express since it bought his company.

American Express shares fell 88 cents, or 2.09 percent, to $41.18 on the NYSE. (Reporting by Maria Aspan and Sinead Carew; Editing by Maureen Bavdek and Richard Chang)