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I'll echo what Dan said for their consumer accounts as well. I always get excellent, fast, friendly, competent, empowered customer service any time at all I hav

by gergles 14y ago

I'll echo what Dan said for their consumer accounts as well. I always get excellent, fast, friendly, competent, empowered customer service any time at all I have the slightest problem with a transaction on my American Express cards. So, I use them for everything. I imagine their higher discount rate helps fund that customer service center, but if I saw a place charging more for Amex cards, I wouldn't shop there; I'd just go somewhere else. Amex customers are (at least, statistically,) more affluent and have a higher propensity to spend; you pay more for being able to access those people.

lukeschlather 14y ago
Why advertise a rate at all? Just show your price and have a line item for credit processing fees right after tax. Anyway, it seems a little backwards that the merchant is paying the processing fee, since you're the one who's getting the great customer service.
- dangrossman 14y ago
  You have to think of credit card fees as part of your customer acquisition cost. You should be willing to pay more if the customer is worth more to you. People and businesses with Amex cards are more affluent than average, so you are willing to pay Amex more to acquire them than you'd pay Visa or MasterCard. That's why Amex can and does charge you more, not because they're simply passing through costs. If that was the case, more businesses would choose not to accept Amex; many of those where customer acquisition isn't an issue already don't (like utilities). Amex has more affluent customers, on average, because they don't give cards to people with poor credit, and most of their cards have a significant annual fee. Their customers are those who can afford to pay extra for more benefits, which happens to correlate highly with overall affluence.
  - toomuchtodo 14y ago
    Agreed. I have a Platinum American Express. I pay $495/year for my card, plus $175/year for three additional cards on the same account. I spend anywhere between $350K-$500K/year on the card (both personal and business-reimbursed expenses). Are my charges more expensive for you as a business to process? Probably. I'm also more likely to spend a lot more with you than your average customer.
    - michaelt 14y ago
      Would such big spenders quibble over a little 1% surcharge?
      - toomuchtodo 14y ago
        Honestly? I probably wouldn't. I'm in the minority though. Think how many Green charge card, OPEN card, regular consumer Amex credit card, and corporate card customers withe Amex there are out there. Would they quibble over an additional 1%? Or would they shop elsewhere with someone who absorbs the cost?
  - coopdog 14y ago
    But at least merchants will have the choice now. In markets where you're operating on a 3% margin whether they're using amex or not can make or break the deal. Giving the consumer the option to pay a little extra or choose another payment method seems like a better solution than simply blocking amex altogether
- gte910h 14y ago
  "it seems a little backwards that the merchant is paying the cash processing fee" as every bank charges them. And every trip to the bank with the cash, or every armored card run to take it in. I hate how people act like cash is costless. Cash is annoying, dirty, dangerous, and expensive. Perhaps not as much as credit cards, but places don't really honestly do the math much of the time.

by gergles 14y ago

lukeschlather 14y ago

Why advertise a rate at all? Just show your price and have a line item for credit processing fees right after tax. Anyway, it seems a little backwards that the merchant is paying the processing fee, since you're the one who's getting the great customer service.

dangrossman 14y ago
You have to think of credit card fees as part of your customer acquisition cost. You should be willing to pay more if the customer is worth more to you. People and businesses with Amex cards are more affluent than average, so you are willing to pay Amex more to acquire them than you'd pay Visa or MasterCard. That's why Amex can and does charge you more, not because they're simply passing through costs. If that was the case, more businesses would choose not to accept Amex; many of those where customer acquisition isn't an issue already don't (like utilities). Amex has more affluent customers, on average, because they don't give cards to people with poor credit, and most of their cards have a significant annual fee. Their customers are those who can afford to pay extra for more benefits, which happens to correlate highly with overall affluence.
- toomuchtodo 14y ago
  Agreed. I have a Platinum American Express. I pay $495/year for my card, plus $175/year for three additional cards on the same account. I spend anywhere between $350K-$500K/year on the card (both personal and business-reimbursed expenses). Are my charges more expensive for you as a business to process? Probably. I'm also more likely to spend a lot more with you than your average customer.
  - michaelt 14y ago
    Would such big spenders quibble over a little 1% surcharge?
    - toomuchtodo 14y ago
      Honestly? I probably wouldn't. I'm in the minority though. Think how many Green charge card, OPEN card, regular consumer Amex credit card, and corporate card customers withe Amex there are out there. Would they quibble over an additional 1%? Or would they shop elsewhere with someone who absorbs the cost?
- coopdog 14y ago
  But at least merchants will have the choice now. In markets where you're operating on a 3% margin whether they're using amex or not can make or break the deal. Giving the consumer the option to pay a little extra or choose another payment method seems like a better solution than simply blocking amex altogether
gte910h 14y ago
"it seems a little backwards that the merchant is paying the cash processing fee" as every bank charges them. And every trip to the bank with the cash, or every armored card run to take it in. I hate how people act like cash is costless. Cash is annoying, dirty, dangerous, and expensive. Perhaps not as much as credit cards, but places don't really honestly do the math much of the time.