3 Common Misconceptions About American Express Debunked
American Express (AmEx) has been perceived as a premium card brand for decades with over 140 million users worldwide. Yet sure enough, a majority of Canadian merchants do not accept American Express cards as a form of payment.
We spoke with business owners across Canada and below are the 3 most common misconceptions about American Express debunked and why you should start accepting it today.
1. Not enough people use an Amex card.
This is a common myth about American Express cards. In fact, AmEx is accepted worldwide with over 140 million cardholders, including all across Canada. AmEx cardholders spend on average 50% more in-store than any other cardholder. That means that Amex cardholders represent 1.5 people coming into your store. It’s not only bad practice to turn customers down, but to turn down higher-spending customers is a major faux-pas. The AmEx cardholder has an annual income 40% higher than the average Canadian and earn some of the best rewards and offers in the credit card industry. They have the money to spend, they are eager to earn their rewards, and your business will benefit from welcoming them.
2. The cost of accepting AmEx is too high.
Historically speaking, American Express credit cards not only had one of the highest interchange rates but also charged merchants a monthly fee for processing AmEx transactions. Today, processors like Paystone offer their merchants free registration into AmEx OptBlue which allows them to accept American Express for no monthly cost and no commitment period. AmEx OptBlue also offers comparable interchange rates to other card brands making it more affordable for small business owners. As well, AmEx does not charge merchants assessment fees or ancillary fees, making the overall cost of accepting AmEx not much higher than other card brands.
As stated above, these cardholders spend 50% more in store, so unless the fees are 50% higher, then it is still profitable to accept rather than not. As well, if you don’t want to get lost in the world of interchange rates and assessment fees, it would benefit you to switch to a processor like Paystone that charges the same rate for all card types. One flat rate every month so you know exactly how much to pay, no matter what.
3. AmEx does not care about merchants; they only care about cardholders.
In the past, AmEx had a reputation full of myths and misconceptions among merchants; some of them include: AmEx had funding delays of 3-5 business days making for an accounting nightmare among small business owners; Amex constantly sided with customers over merchants for disputes and chargebacks; and that AmEx billed separately for its payment processing fees. Today, with AmEx OptBlue and with Zomaron, merchants can take advantage of next day deposits for all card brand transactions and one easy-to-read consolidated statement for all card types every month.
And yes, it is no surprise that AmEx treats their cardholders with some of the best customer service and premium loyalty offers in the industry. And because they care so much about their users, their cardholders stay loyal to them. Since merchants who accept AmEx are still a minority, AmEx cardholders are forced to go to businesses that accept it. Therefore, if you accept it, you’ll likely win their business and their loyalty.