American Express (AMEX) Merchant Account Review
American Express or AMEX is one of the largest credit card providers in the world, processing nearly 22% of the world’s transactions, and the 25th most valuable brand in the world.
While everyone has heard of Amex, fewer people are aware that the credit card provider is also a processor and an acquiring bank.
American Express offers its own merchant account service in the UK, including a payment gateway and Amex card processing.
Unfortunately, you may have to sign up for an American Express merchant account if you work with a banking provider like Barclays, simply because Barclays does not offer the service.
So let’s see the America Express (AMEX) merchant services review now:
Many merchants are notoriously wary of accepting Amex, simply because the cardholder typically charges a premium (although some merchant service providers offer Amex at a discount). At the same time, American Express cardholders supposedly spend more, and more often, which is why they have a premium credit or debit card, and Amex charges transaction rates accordingly.
American Express offers both card processing for Amex Cards with a merchant service agreement and an online payment gateway which you can use to process almost any card.
- Transaction fees ranging from 1.7.-5% + 10-7p
- Monthly costs from £15
- 24/7 customer service in 3 languages
- Access to Amex cardholders
While Amex does not offer a full-range of services, choosing an American Express account gives you access to the 102.4 million cardholders who use the service. It’s also important to keep in mind that Amex cardholders typically have more spending power than MasterCard or Visa, yet many UK merchants do not accept the cards due to the higher cost of processing them. However, an Amex account isn’t the only way to accept American Express cards and there are plenty of things to consider before you sign an Amex contract.
What Does an American Express Merchant Account Include?
Amex offers an online payment gateway and online account management tools, allowing you to accept Amex and other cards through your online store. Your fees will depend on your business industry, size, and transaction volume.
American Express Payment Gateway
The American Express Payment gateway features a fully customisable API and can integrate into most shopping carts and e-commerce platforms. While transaction rates depend on your sales volume, Amex offers sliding pricing plans for card transaction rates, starting at 12p.
|Transactions||Monthly Fee||Transaction Cost|
This fee is charged on top of your existing transaction rate. So, if you’re paying 2.5% to process Amex cards, the total rate will be something like 2.5% + 10p.
Amex Internet Direct
Amex Internet Direct allows you to connect directly to Amex to process online transactions directly through the company’s site to reduce fees by cutting third-party processing. With no transaction volume requirements, support for face-to-face and online sale, and a combination of hosted and XML API for integrated solutions, Amex Internet Direct is a quality solution if you want to accept Amex and reduce fees by 1% or more per transaction.
The only disadvantage of this service is that you are processing transactions over XML through your regular ISP, which means that you will have to create stronger internet security to remain PCI DSS compliant. Because Amex refuses to work with non-PCI DSS compliant merchants, you will also have to achieve this before applying for the service.
My Merchant Account
My Merchant Account is an online data management portable allowing you to access account data, transactions, and payments in real time, 24/7. You can also manage chargebacks and disputes, check customer data, and manage sales. This includes very strong solutions for data management, 12-months of payment reports, e-statements and cash flow statements, dispute alerts, chargeback management, and both email and phone support.
Dynamic Currency Conversion
Amex allows you to accept payments in nearly any currency, and improve conversion by showing customers their local currency. Amex operates in more than 170 countries, offering currency conversion for up to 127 currencies. This is ideal for e-commerce stores, especially those operating internationally with a large number of sales in foreign currencies.
Amex offers one of the strongest security solutions in the business, making the company extremely safe to use. This includes:
- Dedicated Data Security Operating Policy – Each account holder receives dedicated support for improving and ensuring secure business operations, including data management and tools
- Data Security Operating Policy – The Data Security Operating Policy Means that Amex will not work with your business unless you are already secure, reducing your risk of chargebacks and fraud.
What’s the Difference Between an Amex Merchant Account and An Amex Merchant Agreement?
Many acquiring banks will give you the opportunity to sign up for an Amex Merchant Agreement, which they will set up in your name with Amex. This agreement allows you to process Amex cards through their service, and will not typically include any fees, but many include a setup fee. You will not get an online payment gateway service or any card processing abilities that you don’t have with your existing merchant account other than the ability to accept Amex cards through your website or using your PDQ terminals.
For example, Barclaycard offers this service with its merchant accounts. Barclays sets up the account in your name, and it simply adds Amex cards to the list of cards you are able to process through your online payment gateway or card readers.
How Else Can I Accept Amex Cards?
Most merchant accounts will allow you to accept Amex cards, but typically at a premium. For example, you may pay up to 3.7% per transaction for Amex, where Visa and MasterCard average between 1.4% and 2.7% for most merchants. Most merchants offset this cost by either refusing Amex cards altogether or setting a minimum purchase limit for Amex.
With OptBlue, any merchant provider can offer Amex card acceptance, and set their own rates, which can save you considerably.
What is OptBlue?
While Visa and MasterCard both license out card processing, Amex primarily handles processing themselves. Any merchant account acquiring bank wishing to enable their merchants to accept Amex must contract with American Express and typically pay a fee and route Amex transactions through Amex banks. This greatly increases costs for processors.
However, with OptBlue, merchants can contract with American Express at a negotiated rate, giving them the opportunity to sell to you at a reduced rate. OptBlue allows merchants to process most major cards at a single transaction rate negotiated based on their processing volume, which greatly reduces the cost for Amex cards, while increasing the cost for others like Visa and MasterCard. Many merchant account providers like First Data, Worldpay, EVO, Heartland Payment Systems, and Jetpay use this service to offer flat-rate pricing.
Amex Sales and Transparency
Amex is relatively transparent about data policies and charges, and you can typically get all the information you need to set up a long-term contract upfront. In most cases, you will receive a temporary dedicated salesperson, and you will be able to request almost any information you want before signing anything.
However, it is important that you ask upfront, simply because Amex fees can be quite high.
What About Amex Customer Service and Support
Amex offers customer service 6 days a week to non-members and 24/7 customer support to merchant account holders. Assistance is available in English, French, and Spanish. Representatives are typically very helpful, friendly, and normally resolve issues as quickly as possible.
What About Amex’s Reputation
Amex generally maintains a very good reputation, providing fast service, quality support, and plenty of information upfront. However, the company does have some complaints and you should be aware of them. For example, if Amex detects that your account is non-PCI compliant or finds another security issue with your account, your funds may be put on hold while Amex reviews the issue. You may also have some trouble with customer support via email, especially if you maintain a small business, simply because you won’t have customer support priority.
Why Choose Amex Over a Dedicated Service Provider?
Choosing an Amex merchant account may allow you to reduce costs and fees for Amex cards, but is it worth it? In most cases, the answer will depend on the size of your business, your existing merchant account, and your own ability to navigate contracts.
For example, as a small business owner, switching to an Amex contract on top of a traditional merchant account may unnecessarily complicate your merchant account contract for a very small savings. With additional monthly fees, a second contract to keep track of, and splitting all Amex data to another management system, it may be more worthwhile to pay the higher fee for Amex cards through another card processing company.
However, if you process a larger volume of sales, signing a contract with Amex may save you a great deal of money. By reducing fees on one of the world’s most popular cards, you can greatly cut costs, make your business more popular with Amex card holders by reducing restrictions or accepting the card, and save money over going with a flat-rate provider.
Unfortunately, there’s no one-size-fits-all solution, and you will have to review your options, request quotes to see what rates your business will get, and make decisions accordingly.
|Merchant Account||Barclays||Elavon||Global Payments||Sage Pay||Worldpay|
|Amex||Yes, with Additional Contract (Fees from 1.7%)||Yes – 2.65% – 3.5% + 19p||Yes – 3.3% + 20p (negotiable)||Yes – 1.9% credit cards / 40p debit cards||Yes – from 2.75% credit cards / 20p debit cards|
|Monthly Fee||£20+||£10 + (per service)||£10+ (per service)||£20,90+||£19.95+|
|Payment Processing Time||3-7 Business Days||1+ Business Days||2+ Business Days||2 Business Days||7 Days|
|Set Up Fee||£150||From £25||£150 – £250||None||None|
|Termination Fee||£115||£0||£150 – £500||Yes (Varies)||Yes|
|Contract Length||12-18 months (average)||3- Year||12-36 month||Monthly-36 Month||0-36 Month|
While accepting Amex cards previously required you to sign up for an American Express merchant account separately, that is no longer the case. With OptBlue, most of the world’s largest merchant account providers now offer the card as part of their standard service, either for a flat rate, negotiated rate, or Interchange +. If you choose a flat rate service, keep in mind that you will likely pay more for other cards to balance out costs. If you don’t, Amex card transactions can run as high as 5% depending on your contract.
Summary Amex offers a strong standalone merchant account service for accepting American Express Cards as well as a cost-effective online payment gateway solution with strong developer tools. Unfortunately, with no card terminals and no full-service support, you will need more than one solution if you intend to accept face-to-face card payments. Therefore, as a small business owner, you are likely better off choosing to partner with a merchant account provider that can offer negotiated Amex rates to reduce the complexity of your contract. This is especially important considering Amex’s strict security regulations and requirements, which some small businesses may be unable to meet to qualify for the contract. Medium-to-large businesses may benefit from partnering directly with Amex, especially those who process a great deal of American Express cards. Partnering directly may reduce your transaction rates as much as 1% per card by taking out third-party fees, but you will have to pay Amex account fees and setup as well. In short, the service may benefit your business, but it’s still important to do the math and to make sure before you go through the extra trouble.
American Express (AMEX) Merchant Account Review
Amex offers a strong standalone merchant account service for accepting American Express Cards as well as a cost-effective online payment gateway solution with strong developer tools. Unfortunately, with no card terminals and no full-service support, you will need more than one solution if you intend to accept face-to-face card payments. Therefore, as a small business owner, you are likely better off choosing to partner with a merchant account provider that can offer negotiated Amex rates to reduce the complexity of your contract. This is especially important considering Amex’s strict security regulations and requirements, which some small businesses may be unable to meet to qualify for the contract.
Medium-to-large businesses may benefit from partnering directly with Amex, especially those who process a great deal of American Express cards. Partnering directly may reduce your transaction rates as much as 1% per card by taking out third-party fees, but you will have to pay Amex account fees and setup as well.
In short, the service may benefit your business, but it’s still important to do the math and to make sure before you go through the extra trouble.