Amex cutting fees

[Freecountry]

Amex will be cutting fee's for business accepting amex. The fee will be reduced to about 2.37%.
https://www.pymnts.com/news/payment-methods/2018/amex-american-express-fee-cut/amp/

[JACKBLUE]

Maybe because of the less options of churning lately 

[shapsam]

Amex will be cutting fee's for business accepting amex. The fee will be reduced to about 2.37%.
https://www.pymnts.com/news/payment-methods/2018/amex-american-express-fee-cut/amp/

An average of 2.37%, most small businesses will pay more.

[Yehuda25]

hopefully this wont affect their rewards...

[davidrotts63]

hopefully this wont affect their rewards...

I was actually thinking that, if they are more widely accepted they may be inclined to be less lucrative with the offers, as people won't be so hesitant to get their cards.

[Yehuda25]

I was actually thinking that, if they are more widely accepted they may be inclined to be less lucrative with the offers, as people won't be so hesitant to get their cards.

right. and they will have less $ to pay for the rewards as well...

[SamCan]

In Canada the merchant fees have been going down by a few basis points every year with no impact on rewards. 2.37% is around the same that VIsa & Mc charge on their cards. I doubt there will be any changes in rewards. However if there is a major cut that might have an impact.

I think a bigger threat is the legalization in more and more states for merchants to surcharge customers if they are paying with credit card. It's not only a problem to customers that are hoping to use their cards to collect rewards, but  in the long run if there is a cut in the amount of credit card volume used, the banks will need to resort to other means to collect lost revenue. 

[Yehuda25]

In Canada the merchant fees have been going down by a few basis points every year with no impact on rewards. 2.37% is around the same that VIsa & Mc charge on their cards. I doubt there will be any changes in rewards. However if there is a major cut that might have an impact.

I think a bigger threat is the legalization in more and more states for merchants to surcharge customers if they are paying with credit card. It's not only a problem to customers that are hoping to use their cards to collect rewards, but  in the long run if there is a cut in the amount of credit card volume used, the banks will need to resort to other means to collect lost revenue.

interesting. However in the US i can't think of one large store that has a surcharge for CC, I believe having a surcharge for cc actually violates their merchants agreement but they can get around that by instead saying that there is a "discount for cash".

[mmgfarb]

interesting. However in the US i can't think of one large store that has a surcharge for CC, I believe having a surcharge for cc actually violates their merchants agreement but they can get around that by instead saying that there is a "discount for cash".

I think the only industry where it's prevelant is with gas.

[Ephraimh]

right. and they will have less $ to pay for the rewards as well...

You really think they were that sick of making so much money in fees that they decided to tone it down a notch and cut the fees?

They obviously ran the numbers and concluded what visa and MasterCard figured out a long time ago, that a smaller margin on a wider base more positively impacts revenue and earnings vs their current bigger margin with a smaller base model does.

[Definitions]

You really think they were that sick of making so much money in fees that they decided to tone it down a notch and cut the fees?

They obviously ran the numbers and concluded what visa and MasterCard figured out a long time ago, that a smaller margin on a wider base more positively impacts revenue and earnings vs their current bigger margin with a smaller base model does.

Exactly what I was thinking.

[davidrotts63]

You really think they were that sick of making so much money in fees that they decided to tone it down a notch and cut the fees?

They obviously ran the numbers and concluded what visa and MasterCard figured out a long time ago, that a smaller margin on a wider base more positively impacts revenue and earnings vs their current bigger margin with a smaller base model does.

If they are taking MC and Visas figures then they reduce returns as well

[Ephraimh]

If they are taking MC and Visas figures then they reduce returns as well

Why?

[SamCan]

Amex doesn’t actually charge more. They charge differently. Instead of charging more for a visa signature or MC worls elite they will charge by transaction size. For businesses that have large transactions it’s usually going to be cheaper to accept amex then a Citi Prestige. But for many their pricing structure ends up being more expensive.

If a merchant refunds a customer amex will never return any fee while visa and MC will return about 70% of the fees

[SamCan]

interesting. However in the US i can't think of one large store that has a surcharge for CC, I believe having a surcharge for cc actually violates their merchants agreement but they can get around that by instead saying that there is a "discount for cash".

It’s becoming legal to surcharge directly up to 4%.

[Yehuda25]

It’s becoming legal to surcharge directly up to 4%.

i dont think it was ever illegal (maybe until obamas cc act) but more recently against the terms of the terms of the stores/merchants agreement.

[Yammer]

You really think they were that sick of making so much money in fees that they decided to tone it down a notch and cut the fees?

They obviously ran the numbers and concluded what visa and MasterCard figured out a long time ago, that a smaller margin on a wider base more positively impacts revenue and earnings vs their current bigger margin with a smaller base model does.

Until now they targeted the the big spenders, now that the competition has gotten stronger ( CSR ) they are turning to the average American.