Originally Posted by
bradpetrik
Unless they're mandating the processors charge a lower rate as well I can see the processors keeping the same rate and taking the extra profit instead of passing savings on to their customers.
There are no processors in an Amex transaction. Amex is sole acquirer, so apart from per transaction costs imposed by
gateways (such as Authorize.net, etc) there is no-one else to take any of the transaction.
Originally Posted by
mikesyr18
I don't know about others, but I used an AMEX for a few reasons... One being that it cost the merchant more money. In return, I expect higher rewards given to me for those higher interchange fees, along with exceptional customer service, better benefits, an advantage when disputing, etc.
Once you take the higher interchange fees away, AMEX becomes just like any other issuers, so there's no reason to use them anymore. Interchange fees pay for protections, rewards, etc., and will probably go down in quality now that AMEX is slashing them by nearly 30% [from 3% to 2.37%] or so for everyone.
Everything you just said is hogswash. For a start, it's the merchant being charged that 3% or whatever, not you, so in theory you should actually get
less from Amex than the merchant does, including unfavourable dispute terms, worse customer service, and crappier benefits.
Second, if they reduce their merchant fee by 30% (it's not interchange, there's no network switching happening) but increase their merchant acceptance by 40%, they're actually net benefiting.
Third, they're not exactly competing with Visa/MC. The merchant fee on an Amex Green card is still 2.37%. The interchange on a MasterCard World Elite is not a whole lot more than that, but the MasterCard standard is a heck of a lot less. Amex is still making out like a bandit on the average transaction.