Published on March 11th, 2018 | by William Charles19
American Express To Lower Merchant Fees To Try To Increase Card Acceptance
American Express has announced that it will lower the fees it charges merchants by the most it has done in the last two decades in an effort to increase American Express acceptance. Currently American Express is accepted at 1.3 million fewer locations than Visa & Mastercard. The gap was larger in 2013 with American Express accepted at 2.4 million fewer locations. Traditionally American Express has been able to charge merchants higher fees than Visa & Mastercard due to their cardholder base being more affluent than their rivals. This is largely no longer the case with the introduction of other premium cards such as the Chase Sapphire Reserve and American Express also entering the other end of the market with the Amex Everyday cards. American Express plan to lower the discount rate by 5 to 6 basis points this year, typically American Express has been reducing this by 1 to 3 basis points per year.
I preferred American Express’ previous plan of running promotions such as Small Business Saturday to try and increase card acceptance as it more directly benefited cardholders.