FlyerTalk Forums - View Single Post - Amex Serve (2016) [Many shutdowns starting Jan 8, 2016]
Old Jan 9, 2016, 9:44 pm
Join Date: Dec 2006
Posts: 161
Government pressure?

I notice that this Amex action occurs over the same weekend as Nationwide Buxx reduced their allowable loads from $500 to $200 (effective start of business Jan. 11). Both of these changes reduce the opportunities to earn points on credit cards, and there are probably some people hurt by both changes.

The timing is so close I wonder if it is just coincidence. Possibly there was an article in a trade press somewhere on manufactured spending.

Another possibility was government pressure to make money laundering harder by closing accounts or reducing limits. I doubt this alone would have caused these changes.

However, those who did not use the prepaid cards for purchases (generating swipe fees) were probably unprofitable customers. If government pressure forced higher management to look at these fringe products, it is easy to imagine that the conclusion was to shut down the unprofitable customers (American Express), or raise fees sufficiently so they were more likely to be profitable (Nationwide).
ed765 is offline