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If you have an American Express credit card, you may have been in the awkward situation where you go to use your card to pay but the merchant said it couldn’t accept it. While that may not happen regularly, it can create issues if an Amex card is the only form of payment you typically carry.
Here’s a look at why Amex isn’t accepted everywhere, as well as which cards from different networks have wider acceptance.
Why don’t some merchants accept Amex cards?
It’s a pretty simple answer: to save money. Amex cards charge the highest merchant processing fees of any network at an average of 2.33% per transaction. Since the fees are higher, merchants (especially small businesses) may shy away from accepting Amex cards because the high fees cut into their profits.
To put Amex’s merchant processing fees in perspective, here’s a comparison of how it stacked up to other issuers such as Visa, Mastercard and Discover in 2017:
|Network||Average Merchant Fee|
Source: 2018 The Nilson Report
Last year, the average merchant processing fees totaled 2.20% for American Express, Visa, Mastercard and Discover. Amex came in with the highest fee at 2.33%. For businesses, the higher fees Amex charges can add up and cut into profits.
What are merchant processing fees?
Merchant processing fees (aka swipe fees, merchant fees or interchange fees) are the costs merchants incur when you use a credit card to make a purchase. Each time your card is swiped, inserted, tapped or manually inputted, the merchant is charged a fee that is a percentage of your total purchase.
This fee is set by the networks — American Express, Visa, Mastercard and Discover — and often varies by merchant because of several factors, including industry, transaction type and what type of card you hold.
For example, Visa charges different fees for its different types of cards — Visa Signature®, Visa Infinite® and Traditional Rewards, as well as whether the transaction was “retail key entry,” “card not present” or “e-commerce,” among other reasons.
Why are Amex’s merchant processing fees so high?
The reason Amex charges high merchant fees can be linked to the enhanced benefit cardholders receive from its cards. Amex is known for offering premium rewards and value, and Amex cardholders tend to spend more money as a result.
Specifically, an Amex representative stated that its cardholders tend to spend an average of more than three times the amount of non-Amex cardholders. Therefore, transactions made with Amex cards can be more profitable for merchants, compared to transactions from other cards.
It’s also key to note that Amex’s merchant processing fees have declined over the years. This can be attributed to various strategic efforts, including reaching parity in the U.S., a representative stated.
Several years ago, Amex mentioned a goal of reaching equal merchant acceptance with Visa and Mastercard in the U.S. by 2019, and it is making good progress on that goal. Nilson Report data showed Amex has expanded the number of merchant locations from 6.4 million in 2013 to 9 million in 2017. And Amex data showed that within the last 12 months, it added 1.5 million new U.S. locations accepting its cards.
A wider merchant acceptance can help both consumers and merchants. Consumers will be able to use their Amex cards at more U.S. locations, and merchants can benefit from lower merchant processing fees.
Keep alternative payment options handy
Since Amex cards aren’t accepted everywhere, it’s a good idea to keep a card backed by another network, such as Visa or Mastercard, in your wallet. We don’t recommend carrying a Discover card as your backup since it also has limited acceptance.
Here are some cards you can carry as a backup:
Flat-rate cash back:
Earn $150 cash back bonus after $500 in purchases within the first 3 months of account opening
Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
No rotating categories and no caps on cash back
- Earn $150 cash back bonus after $500 in purchases within the first 3 months of account opening
- Cash back bonus is not available if you have had Citi® Double Cash card opened or closed in the past 24 months
- Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
- No Annual Fee
See additional details for Citi® Double Cash Card – $150 Cash Back Offer
Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
$300 Annual Travel Credit, Airport Lounge Access, and Flexible Redemption Options
- Earn 50K bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
- Named a 'Best Travel Credit Card for 2017' by MONEY® Magazine
- 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
- 1:1 point transfer to leading airline and hotel loyalty programs
- Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
- Up to $100 application fee credit for Global Entry or TSA Pre✓®
See additional details for Chase Sapphire Reserve®
2% Cash Back on every purchase, every day
One-time $500 cash bonus once you spend $4,500 on purchases within 3 months from account opening
Redeem cash back for any amount at any time
- Earning unlimited 2% cash back could mean thousands of dollars each year going back into your business
- Plus, a one-time $500 cash bonus once you spend $4,500 on purchases within 3 months from account opening
- Use Spark Cash across all your business spend, with no categories to limit your purchasing
- $0 intro annual fee for the first year; $95 after that
- Rewards won't expire for the life of the account, and you can redeem your cash back for any amount
- Get employee cards at no additional cost, and earn rewards from their business spend
See additional details for Capital One® Spark® Cash for Business
If you don’t have an Amex card and are considering opening one, here are our top picks for various categories:
Rewards and balance transfers:
0% for 15 Months, then 14.74%-25.74% Variable
$0 annual fee & $0 balance transfer fee.
2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.
- Earn 10,000 Membership Rewards® points after you use your new Card to make $1,000 in purchases in your first 3 months.
- Low intro APR: 0% for 15 months on purchases and balance transfers, then a variable rate, currently 14.74% to 25.74%.
- $0 balance transfer fee. Balance transfers must be requested within 60 days from account opening.
- 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x); 1x points on other purchases.
- Use your Card 20 or more times on purchases in a billing period and earn 20% more points on those purchases less returns and credits.
- Over 1.5 million more places in the U.S. started accepting American Express® Cards in 2017.
- No annual fee.
- Terms Apply.
- See Rates & Fees
See additional details for The Amex EveryDay® Credit Card from American Express
Luxury and travel rewards:
60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.*
Up to $200 per calendar year in baggage fees & more at one qualifying airline*
No foreign transaction fees & exclusive airport lounge access*
- Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
- Up to $200 for Uber rides annually. Credit and Uber VIP status available to Basic Card Member only.
- 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
- 5X Membership Rewards® points on eligible hotels booked on amextravel.com.
- As a Platinum Card Member, you can enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
- Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn More.
- $200 Airline Fee Credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
- Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $550 annual fee.
- Terms Apply.
- See Rates & Fees
See additional details for The Platinum Card® from American Express
0% for 15 Months, then 12.99% - 20.99% Variable
Earn 2X points on everyday business purchases up to the annual cap
Enjoy the flexibility to put more purchases on the Card
- Limited Time Offer. Earn 10,000 extra Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership. Offer ends 9/26/2018.
- Get rewarded for business as usual. Earn 2X points on everyday business purchases such as office supplies or client dinners.
- 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter.
- Enjoy the flexibility to put more purchases on the Card and earn rewards when you buy above your credit limit*.
- More buying power for your business* means more opportunities to earn points. That’s everyday business with the new Blue Business Plus Card.
- *The amount you can spend above your credit limit is not unlimited. It adjusts with your use of the Card, your payment history, credit record, financial resources known to us, and other factors.
- 0.0% intro APR on purchases and balance transfers for 15 months, then a variable rate, currently 12.99%, 16.99% or 20.99%, based on your creditworthiness and other factors as determined at the time of account opening.
- No Annual Fee
- Terms Apply
- See Rates & Fees
See additional details for The Blue Business℠ Plus Credit Card from American Express