Major blow to the BA Amex as FCA imposes 0.3% interchange fee cap
Mar 25, 2016, 1:22 pm
#1
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Join Date: Dec 2002
Location: London (LCY)
Programs: BA bronze, Hilton gold, Marriott gold, IHG plat, Meliá gold, Radisson gold, Hyatt disc, AmexPlat
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Major blow to the BA Amex as FCA imposes 0.3% interchange fee cap
The author of the following article is a particular expert on this subject:
Major blow to the BA Amex as FCA imposes 0.3% interchange fee cap
What this means is that the BA Amex card will become subject to the same 0.3% cap on interchange fees (one of several elements of the total fee paid by merchants for accepting card payments) as Visa and MasterCard. This will limit the revenue to Amex that funds the Avios we receive. This is because the card is branded with British Airways. A generic American Express chargecard can continue to earn Membership Rewards without a cap on interchange fees, and Membership Rewards points can be transferred to Avios.
Major blow to the BA Amex as FCA imposes 0.3% interchange fee cap
What this means is that the BA Amex card will become subject to the same 0.3% cap on interchange fees (one of several elements of the total fee paid by merchants for accepting card payments) as Visa and MasterCard. This will limit the revenue to Amex that funds the Avios we receive. This is because the card is branded with British Airways. A generic American Express chargecard can continue to earn Membership Rewards without a cap on interchange fees, and Membership Rewards points can be transferred to Avios.
Mar 25, 2016, 2:22 pm
#2
Join Date: Dec 2014
Location: Bradford, England
Programs: BA GGL/CCR , HH Diamond
Posts: 274
Thank you for pointing this out NFH.
I have seen an ongoing erosion of some of the fringe benefits of having a Platinum AMEX (for example no more Platinum Accord status...) but perhaps the situation will indeed now mean AMEX bolsters their Platinum benefits rather than eroding them. And for sure let's enjoy our BA AMEX 2-4-1 vouchers in the UK whilst we can...
I have seen an ongoing erosion of some of the fringe benefits of having a Platinum AMEX (for example no more Platinum Accord status...) but perhaps the situation will indeed now mean AMEX bolsters their Platinum benefits rather than eroding them. And for sure let's enjoy our BA AMEX 2-4-1 vouchers in the UK whilst we can...
Mar 25, 2016, 2:59 pm
#4
Join Date: Aug 2012
Posts: 2,676
Thank you for pointing this out NFH.
I have seen an ongoing erosion of some of the fringe benefits of having a Platinum AMEX (for example no more Platinum Accord status...) but perhaps the situation will indeed now mean AMEX bolsters their Platinum benefits rather than eroding them. And for sure let's enjoy our BA AMEX 2-4-1 vouchers in the UK whilst we can...
I have seen an ongoing erosion of some of the fringe benefits of having a Platinum AMEX (for example no more Platinum Accord status...) but perhaps the situation will indeed now mean AMEX bolsters their Platinum benefits rather than eroding them. And for sure let's enjoy our BA AMEX 2-4-1 vouchers in the UK whilst we can...
IF the BA Amex benefits are reduced - Amex will probably reduce the benefits on the platinum card as there'll be fewer decent alternatives out there. Less competition = less need to provide anything decent.
Mar 25, 2016, 3:33 pm
#5
Join Date: Feb 2009
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I have a friend who runs a small business. Visa and MC charge him 1.17%, and pay him in 45 days. Amex charges 4% and doesn't pay him for 120 days after the sale. Not surprisingly, he no longer accepts Amex.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
Mar 25, 2016, 3:42 pm
#6
Join Date: Jan 2016
Posts: 98
I have a friend who runs a small business. Visa and MC charge him 1.17%, and pay him in 45 days. Amex charges 4% and doesn't pay him for 120 days after the sale. Not surprisingly, he no longer accepts Amex.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
Mar 25, 2016, 6:06 pm
#7
Join Date: Jul 2012
Location: Canada
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Mar 25, 2016, 6:55 pm
#8
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I have a friend who runs a small business. Visa and MC charge him 1.17%, and pay him in 45 days. Amex charges 4% and doesn't pay him for 120 days after the sale. Not surprisingly, he no longer accepts Amex.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
I also run a small business and pay 1.2% visa and MasterCard and 1.6% for Amex. In both cases the funds are available the following day.
Amex recently got cheaper but when I have the time I think there are better rates to be had on the other two
Mar 25, 2016, 9:49 pm
#9
Join Date: Feb 2009
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This is in Canada, I suspect the payment times are different than in Europe.
Mar 25, 2016, 9:56 pm
#10
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Mar 26, 2016, 1:37 am
#11
Join Date: May 2010
Location: UK
Posts: 5,380
I have a friend who runs a small business. Visa and MC charge him 1.17%, and pay him in 45 days. Amex charges 4% and doesn't pay him for 120 days after the sale. Not surprisingly, he no longer accepts Amex.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
The benefits that Amex offers are paid for by all of us in terms of higher retail prices to cover the credit card fees.
Mar 26, 2016, 1:54 am
#12
Join Date: Feb 2011
Location: London
Programs: BA Silver, ZSL Silver
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Major blow to the BA Amex as FCA imposes 0.3% interchange fee cap
Apologies - I know nothing about merchant fees. Why is Amex higher and therefore what's the incentive for anyone to accept it?
Mar 26, 2016, 1:57 am
#13
Join Date: May 2010
Location: UK
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Mar 26, 2016, 2:45 am
#15
Join Date: Jun 2003
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The author of the following article is a particular expert on this subject:
[snip]
This is because the card is branded with British Airways. A generic American Express chargecard can continue to earn Membership Rewards without a cap on interchange fees, and Membership Rewards points can be transferred to Avios.
[snip]
This is because the card is branded with British Airways. A generic American Express chargecard can continue to earn Membership Rewards without a cap on interchange fees, and Membership Rewards points can be transferred to Avios.
To me the possible exemption was for cards with a singular issuer-transactor (i.e. Amex), which would be for all BA/SPG cards and Amex's own Gold/Plat cards. I don't see co-branding as a relevant distinction (whereas licensed Amex cards issued by Lloyds/MBNA/etc were distinct and never qualified for the possible extension).
There could be a distinction between credit and charge cards but since they are no different from the merchant point of view it wouldn't be deliberate. So now, with the possible exemption ruled out, all Amex cards are capped???