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.

People used to use AMEX because they knew if there was a problem with the purchased item(s), they could return it or get their money back no matter what, even if the merchant tried to input a stupid loophole to cover themselves. I value protections even more than rewards (although that's #2 ). Visa and MasterCard would (and still do) more often than not, side with the merchant unless downright fraud takes place, and the cardholder can dispute it and file a police report, etc.

I think AMEX should stop being like McDonalds are start thinking about quality rather than quantity, which may mean go back to the basics and offer just charge cards again. Raise the annual fee on the charge cards, up the rewards significantly, increase the benefits, re-vamp the customer service, and keep the interchange fees the same. AMEX needs to offer a product the other networks don't -- not offer something that can barely compete and play the game of "catch up." I think over the years people began to become tiresome of the constant erosion of AMEX advantages when compared to V/MC, so the loyalty is lost... They should earn loyalty again by doing what they did before.

Originally Posted by mikesyr18

That's not the history of the AMEX business model, sorry. That is why AMEX used to have a very loyal following of high spenders.

The whole point of needing additional acceptance is to compete with Visa and MasterCard. If a merchant doesn't take AMEX, there's no competition at that store/merchant.

And nobody applies for an AMEX and expects a high acceptance rate at merchants... Only a fool does that.

Originally Posted by kyanar

No, the foolish thing is expecting a publicly traded company to pass up revenue/profit. Amex does indeed benefit from their brand recognition, and their premium brand perception, but they also target high spenders. You can't be a high spender if you can't spend (and, in case you weren't aware, Amex has actually declared an intent to match Visa/MC card acceptance by the end of FY19 - that's not going to be an easy goal if they intend to charge 3% per txn).