weave

I got my first Amex in 1983 when in college and no one else would issue me a card. I went the next 30 years and never even applied for a MC or VISA. It just helped me manage my money by never spending more than I had and I liked that. So if someone said they didn't take AMEX and I didn't have cash, I'd def walk away.

The most ridiculous one was my sister's church. She was doing some challenge thing and I decided to donate to help her but they didn't take Amex. Since she worked there as well I asked why not, and she said they charge too much. I was like "Wait, really? You take money and don't have to give anything in return. Getting 97% of it instead of 98% is still a great deal. But in this case I'm afraid it's going to be 0%. You should never put up barriers to someone willing to donate their money."

But alas, a few years ago I broke down and got a Diners Club due to hassles when overseas with pitiful lack of acceptance and lack of Chip and PIN. When I heard DC had a Chip and PIN preferred card (read about it here) I jumped on it.

1P

Anyone who thinks Discover is accepted everywhere should step outside the US. Europe has never heard of it. I am happy that Amex is making itself more retailer-friendly, but they'll need to combine that with a lot of publicity. Once again, many places in Europe do not accept Amex because of the high charges to retailers. In the UK, I am increasingly finding retailers who don't even accept credit cards anymore, only debit cards.

Low Roller

Good. I'm not the only once who didn't follow his argument. But, since when does logic have any place in a FT discussion?

mikesyr18

Just use common sense. Take a close look at Chase's card portfolio, which one is better? Chase is constantly expanding their credit card offerings and increasing the rewards and benefits.

The introduction of the Chase Sapphire Reserve sparked a sudden interest from AMEX to "improve" the Platinum. AMEX was obviously scared that yet again, people would dump them and move to a Visa.

Read through the Flyertalk forums and other various forums that pertain to credit cards... The Chase Sapphire Reserve punched AMEX right in the mouth, and the combination of UR earning cards [generally] are a combination AMEX can't/doesn't match, plus the higher value of UR points in general are better for the consumer, while AMEX has been reducing the value of MR points for years.

For a while, the Citi Prestige also punched the AMEX Platinum in the mouth, but then Citi decided to become thrifty and devalue it. Citi and Visa also stole Costco away from AMEX, while Barclays (MasterCard) stole Jet Blue away.

Let's also not forget the recent AMEX struggles where the stock plunged by 50% between 2015 and mid-2016. Clearly the other brands were eating their lunch and still are if AMEX finds a sudden need to "increase" the level at which they reduce merchant fees to gain acceptance.

mikesyr18

I've said all along the merchant is the one paying the fee, unless of course, they surcharge the 3%, which does happen in some states. Reduce revenue = Less services for the cardholder. The increased revenue used to go towards the cardholder's perks.

AMEX is accepted at well over 50% of U.S merchants, and I believe the overall numbers in the link I provided earlier in the thread show what's roughly a 65% acceptance rate. I would know because I've lived here all my life. I don't have an issue using my AMEX, except at my local barber shop and Byrne Dairy (a gas station), and my health insurance company (Blue Cross/Blue Shield)... I've never had a problem anywhere else.

There's also no way AMEX acceptance here is worse than Australia seeing as American Express is a country based in the U.S - sorry, but your assumption is simply not true. Just because there isn't an AMEX sticker in the merchant's window, doesn't mean they don't take it.

I'm saying the fee to process the card can vary. If I use Square, I pay 2.75% to accept the AMEX Green card. Large merchants like Walmart will pay less to accept an AMEX v. a small business who barely sparks transaction volume.

krazykanuck

So by saying "just use common sense", is that short hand for saying you don't have any data to back up your claim that Chase is eating Amex's lunch? Anecdotes around FT are always interesting to read but remember that we are an acute minority of CC using customers that know how to use the system to our advantage. Most customers aren't us. Chase has a great CC portfolio, I'm not denying that, I'm a big Chase user but to say that Chase is killing Amex and feeding off its corpse is a bit hyperbolic (my words, not yours ) and not really grounded in fact.

And while your comment about Amex's stock price is true, you seem to be ignoring that since 2016 it has fully recovered and is currently near it's all time high.

mia posted this in another thread, that Amex's net card fee revenue has continued to grow about 10% in the past 3 years. https://www.flyertalk.com/forum/29535843-post15.html

gooselee

Really interesting data points. Thanks for sharing!

Translation: "I have nothing to back up my argument."

+1 to all of this.

mikesyr18

What about this?
https://www.nytimes.com/2017/04/14/b...e-reserve.html

If your competitor is scared, you're eating their lunch. AMEX is obviously not making the kind of revenue they want if they are looking for ways to stop losing out to their competitors. I would say the article shows the interests of millennials, the up and coming generations more than just us Flyertalkers.

Chase isn't the one looking to revamp its cards to match it's competitors... AMEX is the one doing that, nor is Chase and Visa looking to reduce interchange fees here.

mikesyr18

... Except for the remaining part of my post you chose to snip out.

gooselee

Your base argument with me was that reducing interchange fees would not attract enough new merchants/transactions to make up for the lost revenue resulting from the lower fees overall.

Nothing you have posted yet backs up that claim.

The article you linked very correctly states that AMEX is now competing with other card issuers who are going after Amex's historical base audience. Nobody here is arguing with you on that.

Chase isn't looking to revamp their offerings because THEY ALREADY DID THAT - the subject of the very article you linked. Visa/MC also don't need to explore reducing their interchange rates because they're already lower. Your train of thought continues to make no sense.

TravelinSperry

Exactly. I use Amex when/where I can - and have a backup Visa/MC where when I cannot. Amex still provides me with the best rewards (via SPG) and remains my primary card. Now if this decision ultimately results in them cutting benefits, then I will switch cards. Until then - I really don't care what they do.

Fiordland

I think hat "typical AMEX users" that just has one card is a corporate or business user. Usually the company just issues them one card. If they have business expenses they put it on the card or they pay for it personally and fill out extra paperwork to claim it back.

I would expect the CFO or who ever runs the company card program to be under internal pressure to switch from AMEX to someone else the one card they issue their staff members are inconvenient or not widely accepted.

notquiteaff

notquiteaff

mikesyr18

It's hard to keep track when you're talking to five different people at once.

Reducing your merchant fees for 100% of your current customers [on the merchant side], and then adding a 30% additional acceptance rate in addition to what you have will likely barely have an effect on profits. The net gain probably wouldn't be that much (see below). .

Let's say I made $5,000,000 from my current merchants that make up 65% of the merchant population, while charging on average, a 3% rate.
If I significantly reduce the rate to 2% on average, I'm only making 2/3rds of what I made before if the same amount of spending takes place from the previous year ($3,300,000).
If I add additional 30% of the merchant population into the equation, and say, get $5,500,000.00 in revenue after the fact, I haven't gained that much money.

Chase isn't "revamping" their offerings. They're coming out with new products that either do or don't compete with AMEX. For example, the CSR "competes" with the Platinum, but it was introduced as a new product. AMEX on the other hand, had to go back and edit the current benefits and rewards structure just to keep up... If AMEX didn't feel threatened, they would have left the Platinum alone. The article states that AMEX's executives fear the additional competition will burn them, but with the way I interpreted the article (and their statement), the executives were feeling the heat before the CSR was even introduced by way of other product offerings (like the Citi Prestige, Merrill Lynch's Octave, etc.).

And of course I don't make sense to you... You have no grasp of how the free market works. AMEX is only reducing merchant fees because competition is forcing them to. or if they don't reduce them, they think they won't be able to compete anymore (apparently). Without competition, card interchange fees would go up in the U.S, not down.