Amex to cut interchange fees to increase acceptance
#91
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Hint: It's not because their shareholders enjoy dressing up as Santa Claus.
#92
Join Date: Mar 2017
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If you're going to say, "to encourage cardholders to carry large balances over a long time to earn interest," then sure.. On the other hand, AMEX prefers people pay in full, or at least Chenault did when I was watching an interview on YouTube once about him discussing the financial world. He mentioned the best customers are those who pay their balance in full.
#93
FlyerTalk Evangelist
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If you're going to say, "to encourage cardholders to carry large balances over a long time to earn interest," then sure.. On the other hand, AMEX prefers people pay in full, or at least Chenault did when I was watching an interview on YouTube once about him discussing the financial world. He mentioned the best customers are those who pay their balance in full.
Besides, as I'm sure you'll soon remind all of us, many/most of AMEX's earlier card products back in the good ol' days were charge cards only that didn't allow balances to be carried.
#94
Join Date: Jun 2009
Programs: AMEX Business Centurion
Posts: 418
Anything that increases acceptance is a big plus in my book, because the way it is now if there’s anything but zero doubt they take amex, I don’t even try because it really sucks to get the “sorry, only visa and MC” rejection.
#95
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A while back a woman who ran a cafe told me that she did not take AMEX back in the days of swiping. However, she is very happy to take it with the chip, because that lets her off the liability hook, so Amex pays her for the transaction immediately. She finds their interchange be worth it to get the money in her merchant account the same day.
#96
Join Date: Jan 2005
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#97
Join Date: May 2015
Location: Vancouver
Programs: Aeroplan, Mileage Plus, WestJet Gold, AMEX Plat
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They charge the other class of customers "the merchants" an interchange fee, for transaction processing. They make good money on that and use it to subsidize all of these card benefits. They are trying to find the correct balance between margin and volume. Like most business it is tricky ratio to play with.
#98
Join Date: Aug 2017
Programs: Hilton Diamond, IHG Spire Ambassador, Global Entry
Posts: 2,862
The rise of the Chase Sapphire Reserve is the biggest failure of American Express (but not the only). I wanted to like the AMEX Platinum, but it is a weaker card. AMEX has strayed away from a credit card company, and became a benefits company. The benefits are also becoming watered down. I know people who had the Centurion, and even sock drawered it. AMEX had the premium name, had the higher exchange rates (which should have given better rewards), there was no reason why the CSR should have rose to power. To argue that AMEX is widely accepted is laughable. However, the acceptance rate isn't the problem. There is a huge market that would like the Platinum card if it was positioned correctly. Now, they are going to further water down their brand for their loyal followers, while having little to offer that is exclusive.