Anyone who owns or runs a business that accepts credit cards is aware that AMEX charges merchants significantly higher fees than the other card brands.
There are a few reasons for this but an average sale can range around 3% while for the others it is usually around 2%. This is why a lot of retailers, restaurants and other businesses do not offer the ability to take AMEX. That being said, taking AMEX does have its advantages.
Why are the costs so high?
American Express has a different business model than the other card brands. While Visa and MasterCard rely mostly on interest for their income AMEX relies on fees from the merchant and annual fees to their clients. The company does make some interest but nowhere near the scale of the others.
Should I accept AMEX at my business?
We get asked this question a lot here and it really depends on various factors including type of business, clientele and even location. That being said, there are a few major benefits to accept AMEX. AMEX has very affluent consumer cardholders which means their customer base tends to spend more than the other card brands. While you may be paying a higher fee to take their cards you might be getting more business due to the fact.
How can I lower my AMEX pricing?
There are a few different options that we have found to be beneficial when looking to lower our clients AMEX pricing. It really depends on if your business is processing directly through AMEX or going through a processing company. If you are processing directly through AMEX, depending on your SIC Code and type of business AMEX offers programs that can lower your fees directly. Sometimes these reductions can be significant if you understand which category to be in. Now, if you are processing through a standard credit card processing company always try and make sure the structure and markup is the same for AMEX as the other card brands. While the pricing will still be higher there is no reason these processing companies should charge a higher percentage on top of interchange than the others.
Wondering if you are receiving the best possible rate for AMEX?
We get it, this stuff can be confusing. If you are wondering if you are at a competitive cost for taking AMEX simply submit your statement below and our team will run a free analysis. From there, at least you will see if you are priced appropriately or if there is room for improvement!