Originally Posted by
cfischer
Sounds good to me. Something like this will probably come to the US as well. x visits per year across all non-Amex lounges. Started with DL and will continue. Not terrible
i supposed part of the reason is due to
Government of Canada announces finalized agreements with Visa and Mastercard to lower credit card transaction fees for small businesses - Canada.ca
That is why the federal government negotiated and finalized new agreements with Visa and Mastercard, which also protect reward points offered to Canadians.
Today in Hamilton, the Honourable Filomena Tassi, Minister responsible for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), announced that new credit card fee reductions for small business owners will come into effect this Saturday, October 19, 2024. For qualifying small businesses, Visa and Mastercard have agreed to:
reduce domestic consumer credit interchange fees for in-store transactions to an annual weighted average interchange rate of 0.95 per cent;
reduce domestic consumer credit interchange fees for online transactions by 10 basis points, resulting in reductions of up to 7 per cent; and,
provide free access to online fraud and cyber security resources to help small businesses grow their online sales while preventing fraud and chargebacks.
i know the deal is with visa and mc, but that will put pressure on amex as well, so the erosion of profits will lead to the erosion of benefits. this also affects amex strategy in canada market. it is less worthwhile to go after affluent customers who put a lot of spend on their cards, so premium card can be less premium. likewise, in europe (e.g. germany) where amex has started limiting PP lounge access., the interchange fees are also controlled
meanwhile, the share of consumer spend in the US by the affluent population is growing (
top 10% earners accounts for about half of consumer spend), interchange fees are still as it is, so amex's and many issuers' strategy is to target this market segment by offering more value/benefits/prestige, and a limited lounge pass isnt a good look nor align well with the strategy
amex's arrangement with DL is more difficult to be compared directly because it falls under a broader partnership that has many other factors in play
im not saying that interchange fees is the only/determining reason, but i think it certainly affect the economics of the cards significantly, and influences the type of product that is offered