In a Bid To Increase Merchant Card Acceptance, Amex Cuts Fees13th March 2018
According to its 2018 Investor Day presentation, American Express (Amex) has announced its plans to cut merchant fees by more than it has in the last 20 years. The average fee it charges merchants – or the discount rate – is set to fall by a reported five or six basis points this year – the biggest since 1998.
The move comes as Amex’s new Chief Executive, Stephen Squeri, aims to increase the number of stores that accept Amex card, and close the 1.3 million gap in locations which currently accept Visa and Mastercard, but don’t accept Amex.
This move will represent over $580+ million in margins this year, but seems to be part of a longer-term strategy to improve relationships with the merchant community. This reduction will be a welcome relief to many who already accept Amex, but we’ll have to wait and see whether it’s enough to tempt smaller merchants, typically put off by Amex’s high acceptance costs – back into the fold.