Some of the Amex fee changes will likely have been as a result of a nudge from the EU ruling that includes their double-branded cards (e.g. British Airways AmEx) in the 0.3% fee cap in Europe which previously only affected visa and MasterCard.
From what I understand amex is different from Mastercard or visa in Europe. The European limit on fees does not count for amex, or the fees are much higher. I'm not sure exactly. This usually means support for amex is lower than Mastercard or visa.
Only Amex can do this, because they’re both a card network, and card issuer. Allowing them to charge higher interchange fees to merchants than Mastercard or Visa are allowed to in the EU.
Have you any source on the fact that they charge more because of this? Interchange fees are capped in the EU, and the amex fees document based on my reading of it (it's hard to grok) seems in line with the visa one.
Also, from my link it's not just amex. Most of the supermarkets have MasterCard rewards cards, and a few of the "new" "banks" have rewards/time limited rewards (e.g. Chase, curve, revolut).
So no, it's not only amex, and yes these schemes exist in the UK.
I thought the EU had regulations on credit card fees? As I understand it, the Amex isn't widely supported because Amex's fee-heavy business model wouldn't be allowed to launch.
Visa's highest tier cards (Visa Infinite cards, such as the Chase Sapphire Reserve), already have higher fees than the Amex Platinum. The difference is, Visa won't let merchants ban single cards (you have to accept ALL Visa cards), while banning Amex meaning you are banning mostly high tier cards and losing nothing on the low end.
Amex actually lowered their fees to be more in line with Visa/MC through its Optblue program back in 2015. The fact that many businesses don't know that is just a testament to the complexity and confusion in the industry.
I wonder how Amex is able to make money in Europe? They still have a quite generous rewards program (not as generous as the US, but not bad) and I thought they always charged high tx fees (which is also why not all merchants chose to accept it). But the argument being that they also have the high earners = high spenders in their network, and merchants can attract more of those customers by accepting Amex. If the cap was at 0.3%, how can they be any different than MasterCard/Visa cards, which usually don't have reward programs here?
I'm kinda hoping this means American Express will have to fall into line with the other providers on pricing. I'm tempted to enable an AmEx penalty, since it costs more to process AmEx than Visa and Mastercard...that'd probably mean many customers would choose another card, even though it's probably our most popular payment choice right now (I'm pretty sure small business owners have AmEx cards at a higher rate than the average consumer, though I'm not entirely sure why).
Amex doesn't count - they run their own system end to end and charge retailers stupidly high fees. That's why most retailers don't take them.
As for rewards on MC and Visa, which card are you on? In my experience, either the rewards are very small, or they are for specific retailers only, where the Bank has done a deal directly with the merchant. Occasionally they are a loss leader for the bank, working on the principle that you are
The article is wrong about the UK capping interchange fees. Removing the EU cap was one of the first EU rules that the government decided to abolish after Brexit. At one point it meant you weren't going to be able to use a Visa card with Amazon, you'd have to switch to Mastercard.
That is because AMEX charges much higher fees. At my dad's shop, it's about 3% while visa/master card is only 1.5%.m (I'm not 100% sure though).
Since my dad mostly has high volume purchase (and only one or two a day) the 1.5% can mean a lot. He also says doing business with AMEX is hard (if there was an error) because he gets ridiculously few purchase and they don't consider him valuable enough. And everybody who has a AMEX CC in Europa has a Visa or master card as well.
AMEX is a three-party system, whereas Visa/MC are a four-party system. The difference is that AMEX themselves issue their cards, whereas for Visa/MC it's the customer's bank (on license by Visa/MC). Since the customer's bank sets the interchange fee, a merchant can't possibly know what it's going to be before the transaction.
With AMEX the merchant does know the exact fee structure and can therefore decide to accept or not to accept AMEX ahead of time. That's essentially the argument why the fees for AMEX were not capped.
Rather interestingly my bank (First Direct) in the UK swapped over from a Visa Debit card to a Mastercard recently - I wonder if perhaps there are things going on behind the scenes that consumers are not currently aware of.
Rather annoyingly most of my spending with Amazon is on my Visa credit card - can't quite figure out why they are now more expensive to process than the historically expensive AMEX.
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