NFH

I tried to use my Amex card at Sainsbury's on Saturday for a transaction of nearly £400. At the checkout, they refused to accept my card, saying it was because Amex's charges are too high. I was asked to pay with a Visa card instead.

This may not seem so surprising when I tell you which branch of Sainsbury's I was in - Calais. I would guess that Amex France have not seen fit to extend the same terms of business to Sainsbury's in Calais that are enjoyed by Sainsbury's in the UK. This is despite Sainsbury's in Calais being an offshore extension of Sainsbury's UK branch network, in that the branch is part of the UK loyalty scheme and its target market is UK residents.

One wonders why Sainsbury's have been unable to negotiate more favourable charges for acceptance of Amex cards through Amex France. I think the answer is simple: instead of operating as a globally co-ordinated business, American Express segregates itself into fragmented subsidiaries in parallel national markets. This approach precludes a uniform customer experience across national boundaries and also increases costs for American Express through wasteful duplication of resources. It is likely that Amex France are reluctant to negotiate lower charges because they consider that the matter concerns just one single branch, whereas if Amex was a truly internationally focussed business, it would take all of Sainsbury's transaction volume into account, not just that of one branch, irrespective of transaction currency.