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Here in the UK I’ve noticed that Amex is not accepted by a lot of smaller businesses. When I ask why I’m told it’s because their fees are 4-5% - higher than bot

by jarym 8y ago

Here in the UK I’ve noticed that Amex is not accepted by a lot of smaller businesses. When I ask why I’m told it’s because their fees are 4-5% - higher than both Mastercard and Visa. The thing is reward credit cards really feel like the banks are fleecing merchants and giving a small portion as a kick back to the consumer. If card issuers want to provide an incentive to their customers then they shouldn’t fund it by charging the merchants more. All that will likely happen is merchants will increase their prices and those without reward cards will end up paying more and getting less. It’s probably why on so many sites (especially airlines!) I have to pay ‘2% credit card processing surcharge’. If Visa and Mastercard don’t want retailers to get selective then there needs to be a single charge rate - and I think it would be a good idea that this information is shared with purchasers at time of a payment.

gwilliams 8y ago
When I operated a store in Canada, Amex would hold on to the money for an extra 30 days beyond the next monthly reimbursement cycle, unlike Visa/MC.
gambiting 8y ago
It's not just Amex - I found quite a few places in UK just straight up don't accept credit cards at all. It's cash or debit card only, again - because of higher processing fees.
- mattmanser 8y ago
  Not these days, that's all but disappeared, at least in the Midlands where I live. Amex though, very few places accept amex.
  - isostatic 8y ago
    Wouldn't go for "very few", the majority (sure not all) of places do in my experience
amaccuish 8y ago
The issue you refer to here was spoken about in a recent buzzfeed article that appeared on here :) https://www.buzzfeednews.com/article/venessawong/were-all-subsidizing-people-who-use-american-express https://www.buzzfeednews.com/article/venessawong/were-all-su... https://news.ycombinator.com/item?id=17450891 https://news.ycombinator.com/item?id=17450891
agurk 8y ago
Interestingly a barber in the City (of London) I occasionally go to started accepting Amex recently. I had asked them the first time I used them (back in 2008) why they didn't accept Amex and it was for the high rates. When I asked why they'd started accepting Amex, they said that the rates on some rewards cards they were accepting were so high that Amex was better value for them. I also assume it was helped that the demand for Amex is higher in the City than the UK average.
- J-dawg 8y ago
  I've noticed a lot of smaller places have started accepting Amex because they use iZettle machines or similar. It's funny that many medium-sized business will reject Amex, while a little burger stand at a farmer's market will (sometimes) accept it. Perhaps iZettle have decided to take the hit on the Amex fees and charge a flat fee to their customers.
  - techstrategist 8y ago
    Hi, I saw one of your old comments and was hoping we could chat about it as I'm going through something similar. Email is in profile if you're willing. https://news.ycombinator.com/item?id=12099420 https://news.ycombinator.com/item?id=12099420
- cbzoiav 8y ago
  There is a saying that your business isn't going anywhere in London if you don't take AMEX. Not only are there a higher percentage of personal cards but a lot of corporates use them.
M2Ys4U 8y ago
>All that will likely happen is merchants will increase their prices and those without reward cards will end up paying more and getting less. It’s probably why on so many sites (especially airlines!) I have to pay ‘2% credit card processing surcharge’. Those fees have been banned in the UK (I think it might be an EU regulation) now
- logifail 8y ago
  If I go to Transferwise to buy foreign currency, I'm charged the same additional fee whether I fund my transfer from a debit or a credit card. This doesn't seem right as it must be more expensive for them to process a credit card payment.
  - cbzoiav 8y ago
    0.2% interchange on debit cards vs 0.3% on credit card. Within the EU they can't legally charge a card fee but can choose to say not accept credit cards or to charge a top up fee to all payment methods.
    - logifail 8y ago
      Transferwise do charge a card fee, here's what their UI has just offered me at the final confirmation screen: "Choose your transfer type Bank transfer Low cost transfer - 2.54 GBP in total fees Send the money from your bank account. Debit card/Credit card Fast and easy transfer - 3.54 GBP in total fees" That's a surcharge for paying by card vs a bank transfer.
- cbzoiav 8y ago
  It is EU and it doesn't apply to AMEX branded and issued AMEX cards (it does to say a British airways AMEX but not the platinum cashback cards).
logifail 8y ago
...and yet many retailers who won't take Amex directly, will let you pay via Paypal, and Paypal do let you provide funds from an Amex card. If you're a small business, Paypal charges are also high compared with standard debit and credit cards, but my understanding based on conversations with people in the SMB space is that somehow the marketing types think the benefit of having a "pay with Paypal" button on your website outweighs the additional charges. For the moment, anyway.
- compsciphd 8y ago
  I'd rather pay with paypal than use a company hosted credit card processing system. For paypay security isn't simply a cost center, their whole business is keeping these transactions secure. For a regular retailer, their business is selling some product, security is just an added cost.
  - bradknowles 8y ago
    By your statement, I have to assume that you don't really know anything about the history of paypal or the internal workings of the company. Of all the online payment solutions, I think paypal is the most security-free solution I have come across so far. And the one that works the hardest to get your money into the system and to make sure that you can never, ever get your money back out.
    - compsciphd 8y ago
      getting money in and never getting it out has nothing to do with using it as a credit card processor.
- hakfoo 8y ago
  One argument I've seen on PayPal is that it some people use the balance as an "off the books" place in family finances. Stereotypical narrative: The wife will have a fit if she sees a credit-card transaction for an expensive hobby item. But if you just see "PayPal transfer, $300.00", or better yet, nothing because you paid out of a balance you filled up by selling junk on eBay, it has plausible deniability.
rahimnathwani 8y ago
"It’s probably why on so many sites (especially airlines!) I have to pay ‘2% credit card processing surcharge’." IIRC these surcharges are now illegal where you live.

by jarym 8y ago

gwilliams 8y ago

When I operated a store in Canada, Amex would hold on to the money for an extra 30 days beyond the next monthly reimbursement cycle, unlike Visa/MC.

gambiting 8y ago

It's not just Amex - I found quite a few places in UK just straight up don't accept credit cards at all. It's cash or debit card only, again - because of higher processing fees.

mattmanser 8y ago
Not these days, that's all but disappeared, at least in the Midlands where I live. Amex though, very few places accept amex.
- isostatic 8y ago
  Wouldn't go for "very few", the majority (sure not all) of places do in my experience

amaccuish 8y ago

The issue you refer to here was spoken about in a recent buzzfeed article that appeared on here :) https://www.buzzfeednews.com/article/venessawong/were-all-subsidizing-people-who-use-american-express https://www.buzzfeednews.com/article/venessawong/were-all-su... https://news.ycombinator.com/item?id=17450891 https://news.ycombinator.com/item?id=17450891

agurk 8y ago

Interestingly a barber in the City (of London) I occasionally go to started accepting Amex recently. I had asked them the first time I used them (back in 2008) why they didn't accept Amex and it was for the high rates. When I asked why they'd started accepting Amex, they said that the rates on some rewards cards they were accepting were so high that Amex was better value for them. I also assume it was helped that the demand for Amex is higher in the City than the UK average.

J-dawg 8y ago
I've noticed a lot of smaller places have started accepting Amex because they use iZettle machines or similar. It's funny that many medium-sized business will reject Amex, while a little burger stand at a farmer's market will (sometimes) accept it. Perhaps iZettle have decided to take the hit on the Amex fees and charge a flat fee to their customers.
- techstrategist 8y ago
  Hi, I saw one of your old comments and was hoping we could chat about it as I'm going through something similar. Email is in profile if you're willing. https://news.ycombinator.com/item?id=12099420 https://news.ycombinator.com/item?id=12099420
cbzoiav 8y ago
There is a saying that your business isn't going anywhere in London if you don't take AMEX. Not only are there a higher percentage of personal cards but a lot of corporates use them.

M2Ys4U 8y ago

>All that will likely happen is merchants will increase their prices and those without reward cards will end up paying more and getting less. It’s probably why on so many sites (especially airlines!) I have to pay ‘2% credit card processing surcharge’. Those fees have been banned in the UK (I think it might be an EU regulation) now

logifail 8y ago
If I go to Transferwise to buy foreign currency, I'm charged the same additional fee whether I fund my transfer from a debit or a credit card. This doesn't seem right as it must be more expensive for them to process a credit card payment.
- cbzoiav 8y ago
  0.2% interchange on debit cards vs 0.3% on credit card. Within the EU they can't legally charge a card fee but can choose to say not accept credit cards or to charge a top up fee to all payment methods.
  - logifail 8y ago
    Transferwise do charge a card fee, here's what their UI has just offered me at the final confirmation screen: "Choose your transfer type Bank transfer Low cost transfer - 2.54 GBP in total fees Send the money from your bank account. Debit card/Credit card Fast and easy transfer - 3.54 GBP in total fees" That's a surcharge for paying by card vs a bank transfer.
cbzoiav 8y ago
It is EU and it doesn't apply to AMEX branded and issued AMEX cards (it does to say a British airways AMEX but not the platinum cashback cards).

logifail 8y ago

...and yet many retailers who won't take Amex directly, will let you pay via Paypal, and Paypal do let you provide funds from an Amex card. If you're a small business, Paypal charges are also high compared with standard debit and credit cards, but my understanding based on conversations with people in the SMB space is that somehow the marketing types think the benefit of having a "pay with Paypal" button on your website outweighs the additional charges. For the moment, anyway.

compsciphd 8y ago
I'd rather pay with paypal than use a company hosted credit card processing system. For paypay security isn't simply a cost center, their whole business is keeping these transactions secure. For a regular retailer, their business is selling some product, security is just an added cost.
- bradknowles 8y ago
  By your statement, I have to assume that you don't really know anything about the history of paypal or the internal workings of the company. Of all the online payment solutions, I think paypal is the most security-free solution I have come across so far. And the one that works the hardest to get your money into the system and to make sure that you can never, ever get your money back out.
  - compsciphd 8y ago
    getting money in and never getting it out has nothing to do with using it as a credit card processor.
hakfoo 8y ago
One argument I've seen on PayPal is that it some people use the balance as an "off the books" place in family finances. Stereotypical narrative: The wife will have a fit if she sees a credit-card transaction for an expensive hobby item. But if you just see "PayPal transfer, $300.00", or better yet, nothing because you paid out of a balance you filled up by selling junk on eBay, it has plausible deniability.

rahimnathwani 8y ago

"It’s probably why on so many sites (especially airlines!) I have to pay ‘2% credit card processing surcharge’." IIRC these surcharges are now illegal where you live.