AMEX not accepted or surcharge
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vet
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The difference to a merchant between a Amex cc and a debit card, per $100 of a spend, is $3 compared to 50 cents, says this http://www.flgllp.com/pdfs/Brief_in_Support_of_Preliminary_Approval.pdf
I'm not surprised that Amex is fighting the US Dept of Justice tooth and nail.
I'm not surprised that Amex is fighting the US Dept of Justice tooth and nail.
S
sampson
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Amex's k10 for 2012 bodes ill:
An increasing prevalence of surcharging by merchants could materially adversely affect our business and results of operations.
While our Card acceptance agreements with merchants generally do not prohibit merchants from surcharging our Cardmembers, merchants are encouraged to welcome our Cardmembers and are obliged to comply with applicable laws and our card acceptance agreements, including any non-discrimination provisions in our agreements. There are certain countries in which surcharging is specifically permitted, such as Australia and certain countries in the European Union. In Australia, we have seen selective, but increasing, merchant surcharging on American Express Cards in certain merchant categories and, in some cases, on a basis that is greater than that applied to cards issued on the bankcard networks, which is known as differential surcharging. New rules issued by the Reserve Bank of Australia in 2012 allow us and other payment networks to prohibit merchants from surcharging by more than their reasonable costs of accepting a particular payment card. This could lead to an increase in higher surcharges on American Express Cards when compared to cards issued by other issuers or on other networks. In addition, the proposed settlement by MasterCard and Visa of their U.S. merchant class litigation, which was preliminarily approved in November 2012, requires MasterCard and Visa to permit U.S. merchants to surcharge MasterCard and Visa credit card transactions under certain terms and subject to certain conditions, while permitting the networks to continue to prohibit surcharges on debit card transactions. MasterCard and Visa have announced revised network rules that went into effect on January 27, 2013 that prohibit merchants that also accept American Express Cards from implementing surcharges of MasterCard and/or Visa credit card transactions unless they also surcharge American Express transactions in a manner that would violate the non-discrimination provisions generally agreed to by most merchants that accept Cards on the American Express network (i.e., by surcharging American Express transactions but not surcharging MasterCard and Visa debit card transactions). This may encourage merchants that currently accept American Express Cards to either violate their Card acceptance agreements with American Express or to discontinue acceptance of American Express Cards. If this occurs, it could materially and adversely affect American Express merchant coverage and Charge volumes.
If surcharging becomes widespread, American Express Cards and credit and charge cards generally could become less desirable to consumers, which could result in a decrease in Cards in force and transaction volumes. The impact could vary depending on the manner in which a surcharge is levied and whether surcharges are levied upon all payment cards, whether debit cards are excluded, or whether the amount of the surcharge varies depending on the card, network, acquirer or issuer. Surcharging could have a material adverse effect on our business, financial condition and results of operations, particularly to the extent surcharging disproportionately impacts American Express Cardmembers.
We may not be successful in our efforts to promote Card usage through our marketing, promotion and rewards programs, or to effectively control the costs of such programs, both of which may impact our profitability.
Our business is characterized by the high level of spending by our Cardmembers. Increasing consumer and business spending and borrowing on our payment services products, particularly credit and charge Cards and Travelers Cheques and other prepaid products, and growth in Card lending balances, depend in part on our ability to develop and issue new or enhanced Card and prepaid products and increase revenues from such products. One of the ways in which we attract new Cardmembers, reduce Cardmember attrition and seek to retain or capture a greater share of customers’ total spending on
Table of Contents
Cards issued on our network, both in the United States and in our international operations, is through our Membership Rewards program, as well as other Cardmember benefits. We may not be able to cost-effectively manage and expand Cardmember benefits, including containing the growth of marketing, promotion and rewards expenses and Cardmember services expenses. For example, Cardmembers’ increased engagement with our Membership Rewards program drove an increase in the ultimate redemption rate to 94 percent in 2012 from 92 percent in 2011, which resulted in higher rewards expenses in 2012. In addition, many credit card issuers have instituted rewards and co-brand programs that are similar to ours, and issuers may in the future institute programs that are more attractive to Cardmembers than our programs.
If we continue to increase our investments in marketing, promotion and rewards programs, we will need to find ways to offset the financial impact by increasing payments volume, the amount of fee-based services we provide or both. We may not succeed in doing so, particularly in the current regulatory environment.
Reporting
We are obligated, both under our Terms
of Reference and as an ASIC approved
external dispute resolution scheme,
to report systemic issues to ASIC on a
quarterly basis. The reports do not identify
the member, but include details of the
nature of the problem and the manner in
which it was resolved. A member is only
identified to ASIC if it does not rectify the
matter to the Ombudsman’s satisfaction
what a cop out.
An increasing prevalence of surcharging by merchants could materially adversely affect our business and results of operations.
While our Card acceptance agreements with merchants generally do not prohibit merchants from surcharging our Cardmembers, merchants are encouraged to welcome our Cardmembers and are obliged to comply with applicable laws and our card acceptance agreements, including any non-discrimination provisions in our agreements. There are certain countries in which surcharging is specifically permitted, such as Australia and certain countries in the European Union. In Australia, we have seen selective, but increasing, merchant surcharging on American Express Cards in certain merchant categories and, in some cases, on a basis that is greater than that applied to cards issued on the bankcard networks, which is known as differential surcharging. New rules issued by the Reserve Bank of Australia in 2012 allow us and other payment networks to prohibit merchants from surcharging by more than their reasonable costs of accepting a particular payment card. This could lead to an increase in higher surcharges on American Express Cards when compared to cards issued by other issuers or on other networks. In addition, the proposed settlement by MasterCard and Visa of their U.S. merchant class litigation, which was preliminarily approved in November 2012, requires MasterCard and Visa to permit U.S. merchants to surcharge MasterCard and Visa credit card transactions under certain terms and subject to certain conditions, while permitting the networks to continue to prohibit surcharges on debit card transactions. MasterCard and Visa have announced revised network rules that went into effect on January 27, 2013 that prohibit merchants that also accept American Express Cards from implementing surcharges of MasterCard and/or Visa credit card transactions unless they also surcharge American Express transactions in a manner that would violate the non-discrimination provisions generally agreed to by most merchants that accept Cards on the American Express network (i.e., by surcharging American Express transactions but not surcharging MasterCard and Visa debit card transactions). This may encourage merchants that currently accept American Express Cards to either violate their Card acceptance agreements with American Express or to discontinue acceptance of American Express Cards. If this occurs, it could materially and adversely affect American Express merchant coverage and Charge volumes.
If surcharging becomes widespread, American Express Cards and credit and charge cards generally could become less desirable to consumers, which could result in a decrease in Cards in force and transaction volumes. The impact could vary depending on the manner in which a surcharge is levied and whether surcharges are levied upon all payment cards, whether debit cards are excluded, or whether the amount of the surcharge varies depending on the card, network, acquirer or issuer. Surcharging could have a material adverse effect on our business, financial condition and results of operations, particularly to the extent surcharging disproportionately impacts American Express Cardmembers.
We may not be successful in our efforts to promote Card usage through our marketing, promotion and rewards programs, or to effectively control the costs of such programs, both of which may impact our profitability.
Our business is characterized by the high level of spending by our Cardmembers. Increasing consumer and business spending and borrowing on our payment services products, particularly credit and charge Cards and Travelers Cheques and other prepaid products, and growth in Card lending balances, depend in part on our ability to develop and issue new or enhanced Card and prepaid products and increase revenues from such products. One of the ways in which we attract new Cardmembers, reduce Cardmember attrition and seek to retain or capture a greater share of customers’ total spending on
81
Table of Contents
Cards issued on our network, both in the United States and in our international operations, is through our Membership Rewards program, as well as other Cardmember benefits. We may not be able to cost-effectively manage and expand Cardmember benefits, including containing the growth of marketing, promotion and rewards expenses and Cardmember services expenses. For example, Cardmembers’ increased engagement with our Membership Rewards program drove an increase in the ultimate redemption rate to 94 percent in 2012 from 92 percent in 2011, which resulted in higher rewards expenses in 2012. In addition, many credit card issuers have instituted rewards and co-brand programs that are similar to ours, and issuers may in the future institute programs that are more attractive to Cardmembers than our programs.
If we continue to increase our investments in marketing, promotion and rewards programs, we will need to find ways to offset the financial impact by increasing payments volume, the amount of fee-based services we provide or both. We may not succeed in doing so, particularly in the current regulatory environment.
Reporting
We are obligated, both under our Terms
of Reference and as an ASIC approved
external dispute resolution scheme,
to report systemic issues to ASIC on a
quarterly basis. The reports do not identify
the member, but include details of the
nature of the problem and the manner in
which it was resolved. A member is only
identified to ASIC if it does not rectify the
matter to the Ombudsman’s satisfaction
what a cop out.
Last edited by a moderator:
Moopere
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What an interesting read.
Many things to indicate how difficult business can be, trapped on the one hand under different countries regulatory systems and the other by the corporate requirement to provide good (and improving) returns to shareholders. The usual business problem, but a global business of this type somewhat unique in trying to present what looks like a unified product offering (more or less) across very different jurisdictions.
Not shedding too many tears for the giant though, there is an interesting snippet in there which alludes to more traditional banking offering somewhat similar programs to Membership rewards and therefore threatening the Amex customer base ... the immediate question coming to my mind from this would be ... how does a traditional bank offer a similar 'rewards' system at less cost than Amex?
Many things to indicate how difficult business can be, trapped on the one hand under different countries regulatory systems and the other by the corporate requirement to provide good (and improving) returns to shareholders. The usual business problem, but a global business of this type somewhat unique in trying to present what looks like a unified product offering (more or less) across very different jurisdictions.
Not shedding too many tears for the giant though, there is an interesting snippet in there which alludes to more traditional banking offering somewhat similar programs to Membership rewards and therefore threatening the Amex customer base ... the immediate question coming to my mind from this would be ... how does a traditional bank offer a similar 'rewards' system at less cost than Amex?
S
sampson
Guest
Karma is coming. Their card insurance sucked when I was immobile and the doc's receptionist couldn't get the ok to go ahead. Amex wanted proof that every aspect of the travel was paid of amex except, uum, i'm in a med bed without files. grrrrr.
Besides who cares about bank points when Woolies awards more qff points more often in batches of hundreds and 1000 - and that suits me.
The Rok
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Banks don't do it cheaper as such, its just that they have a whole host of other products & services that they sell to the client to subsidise the rewards cards, making them really a value proposition! Amex have zilch else to offer really. Travellers Cheques are all but done, their Travel Insurance is a joke really. I mean covering the primary card holder only, not any supplementary card holders makes it a really silly product, and every bank and finance institution in the world now offers global cash cards of some sort.... Amex are really in dangerous territory, especially in countries like Australia!
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And the Global Cash Card is single currency
lovestotravel
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Went to a local chicken shop tonight that has started to accept EFTPOS
$10 min spend, 2.55% surcharge for Amex which I paid
3 points per $1 instead of $1 point per $ make it worth it still
Reported them on the Amex website as the chicken was amazing and I'd like to go back
$10 min spend, 2.55% surcharge for Amex which I paid
3 points per $1 instead of $1 point per $ make it worth it still
Reported them on the Amex website as the chicken was amazing and I'd like to go back
Moopere
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Hmm, how does that work? Is the chicken shop classified as a restaurant and thus earns at 3:1?
Moopere
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I agree - and businesses that don't take loyalty seriously (ie, continual cut-backs and 'enhancements') do so at their peril and really invite a competitor to eat their lunch.
There is a lot of moaning and general complaining going on with relation to QF/QFF at the moment, and similarly about VA/VFF whom I feel sure follow their main competitor in the downwards trend of customer benefits - they really do put themselves at risk, other, perhaps hungrier companies will simply swoop in and take their customer base.
We've all suffered some pretty rough treatment from Amex in recent years by way of dilution of benefits to being a customer. I still value them as a supplier of services to me, but it seems almost like every time I turn around another previous 'benefit' gets the slimming treatment and becomes worthless whilst at the same time still figuring prominently in advertising and sales blurb.
S
sampson
Guest
If a bank had the same 'tracking problems' as Amex, a Current Affair would chase the manager down the alley. When there's a problem, Amex are shocking.
D
desiredusername
Guest
[h=5]Was that fed right spot on? Amex's 31 March 2014 "Q" report says, it sounds, Amex was uuum playing with Reserve Bank rules in the 5k/5t.
Table of Contents[/h] Surcharging, particularly where it disproportionately impacts American Express Card Members, which is known as differential surcharging, could have a material adverse effect on us if it becomes widespread. The Reserve Bank of Australia changed the Australian surcharging standards beginning March 18, 2013 to allow us and other networks to limit a merchant’s right to surcharge to “the reasonable cost of card acceptance.” In the EU, the Consumer Rights Directive prohibits merchants from surcharging card purchases more than the merchants’ cost of acceptance in those member states that permit surcharging.
Table of Contents[/h] Surcharging, particularly where it disproportionately impacts American Express Card Members, which is known as differential surcharging, could have a material adverse effect on us if it becomes widespread. The Reserve Bank of Australia changed the Australian surcharging standards beginning March 18, 2013 to allow us and other networks to limit a merchant’s right to surcharge to “the reasonable cost of card acceptance.” In the EU, the Consumer Rights Directive prohibits merchants from surcharging card purchases more than the merchants’ cost of acceptance in those member states that permit surcharging.
Went to shaver shop today to buy some stuffs and was told there is a standard 1.25% surcharge on AMEX but not other cards. Oh well, 1.25% is not that much but I do believe premium Visa/Master cards charge around the same rate as that, such Signature/Select/World master etc. I ended up paying by visa to avoid the surcharge.
It looks like more and more big merchant chain stores start surcharging on AMEX.
It looks like more and more big merchant chain stores start surcharging on AMEX.
That's sounds like a differential surcharge (maybe the difference between their blended Visa/MasterCard rate and their AMEX rate).
So AMEX charges them more than 2.5%?? That's just a rip-off. However, IMHO I don't think the rate they surcharge is the differential between different cards, that should be the amount AMEX charges to them and they just fully pass that on to consumers. This is the same as R.M Williams stores in Aus, they started surcharging 2% since Oct 2013. Merchants are just not willing to cope AMEX.
Moopere
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Over here in the west the big chains are fine, geez, even mcdonalds will let me buy a cheeseburger for about 2 bucks and use Amex without surcharge.
Its the smaller and small minded businesses that give the grief. So many of these guys quiet obviously haven't quantized the cost of taking, storing, protecting, insuring and banking cash .. its not zero, even if your daily take is relatively small, you still have to send out an employee with a brown paper bag to the bank, taking the inherent risks and unbillable time in doing so.
I'm not defending what is obviously a higher charge by Amex on average compared to other cards, MC/VISA in particular, but the difference is pretty marginal, really, and businesses who are making or breaking sales on a 1% differential must certainly be struggling to pay the relatively lower MC/VISA charges also, and cash costs ... so these types of businesses must be struggling to stay afloat at all.
My local family Vietnamese restaurant has taken Amex for years, and still does - no surcharge - and this is a _tiny_ business.
I've convinced myself over the years that in general, the businesses who 'have a problem with Amex' and surcharge it highly and differently from other cards are businesses who have a single or family ownership and the decision makers get a bee in their bonnet about something and ultimately make a decision thats not entirely rationally based.
Of course, there are always exceptions to this, those businesses who believe themselves to be in a monopoly of sorts, or at least not under any particular threat by competitors (who may not surcharge) will do whatever they think they can get away with.
Its interesting to me that large and competitive businesses, by and large, don't surcharge at all, supermarkets, hardware stores, luxury goods retailers (even mid range, like David Jones), geez, even most company owned petrol stations (as opposed to the franchised ones).
Most businesses who have a range of competition in my area (or travels) get an opportunity for loyalty with me once ... if they surcharge my Amex, or don't accept it, then I'm very likely to go to check out their competition next time I shop. I may or may not be successful in that adventure, but the (usually) small business I just walked out on won't see me again, and that _can't_ be better for their bottom line than an extra 1-2% at checkout time..... surely?
Twister292
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I would have thought that with more and more banks throwing their weight behind Amex, acceptance would eventually increase...it seems to be going the other way if anything.
Both my NAB and ANZ cards are pairs (MC/Amex and Visa/Amex)...I might well be inclined to switch my NAB card back to an LF visa after I get the bonus 10k QFF points...
Both my NAB and ANZ cards are pairs (MC/Amex and Visa/Amex)...I might well be inclined to switch my NAB card back to an LF visa after I get the bonus 10k QFF points...
D
desiredusername
Guest
Speaking of brown paper bags, people in Washington are poking around. amex thinks australia is marvellous, unlike Euro countries and States outlawing old 'no surcharging anyone' laws. amex is taking a hit.
Coming to merchants, historically, V/MC paid the merchant's bank overnight while Amex took 'forever' which means that little shop carried the can. Merchants battle internet shops, the Walmarts and Aldi snow gear sales, and other turf wars. Small business is struggling. A few years ago, 1500 restaurants in Victoria closed. Look at the For Lease sgns. I can see why shops would say "I'm not wasting my time with Amex and paperwork over $5 burgers". In the 5k/5t promo, Coles and Woolies complained about the paperwork. Gas companies complained about small transactions -Amex paid up 1000 points on pre-paid gas bills at $1 a time.
The Reserve Bank Board should try running a small shop in the fall out of the Great Recession. Paperwork paperwork ..and delays waiting for amex.
amex even decided to pay points in 10 weeks instead of overnight.
Amex also blames 'everyone else', including cable companies, wireless, pos machines ...and all the Aff'ers in that promo: Amex's computers suffered 'programming errors' according to fos. hmmm. Try 'fk ups galore'.
Can't amex upgrade its Commodore 64 puter? Amex shed 10% of ts global workforce and needed to become a bank to stay afloat.
Amex faces competition from other points schemes: Woolies awards 200 to 1000 points on small shopping very regularly for example all these years after Amex and Qantas had their stoush in late 08.
Amex should ask itself why large economies like California and Europe are abolishing the 'no surcharging' rules too.
Amex is in trouble, though its quarterly report looks good. Buffet is happy. Small shops aren't.
whatmeworry
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With the changes to HECS indexation and fees looming, I read somewhere some people have been getting multiple credit cards, paying off their HECS/HELP debt then defaulting and declaring bankruptcy.
Mark3000
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Wow! You wouldn't think that would be a good career move for many people. These are probably not the best and brightest of our university graduates doing things like that.
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