Why Some Merchant Don’t Accept American Express Cards

Why Some Merchant Don’t Accept American Express Cards

While it’s critical for any business to accept credit cards in today’s economy, many business owners have a hard time deciding which credit cards to accept. Many business owners, in fact, decide not to accept every credit card that their customers may walk in the door with. One of the most commonly denied cards for small businesses is American Express, and it’s important for anyone who is considering a merchant services account to understand why.

American Express is a charge card company that is known for its high-end clientele. Most American Express cardholders have incomes that make them upper class, and the cards biggest selling point is that they have no credit limit. Because of this, it would seem like business owners would want to accept this card.

Unfortunately, American Express also has some of the highest swipe fees in the industry. Because the company carefully screens their cardholders, has excellent fraud protection, and offers cards with no credit limits, these high fees are justified by the company because business owners have a lower rate of charge-backs and denied cards than they would with other cards.

Many business owners, however, do not necessarily attract the high-end clientele that carry these charge cards. This means that they can save a lot of money on swipe fees and equipment charges by simply not accepting American Express cards. Since the vast majority of their customers do not carry one of these cards, they do not lose any business. Other business owners have recognized that they can accept other credit cards that these customers carry and can avoid paying the higher fees to American Express. Since most people with American Express cards have other credit cards in their wallet, not accepting American Express isn’t a large enough deterrent for a customer to take their business elsewhere.

If a business routinely serves high-end clientele who make very large purchases, however, it can be worth it to accept American Express. Other cards might come up as denied if a customer goes over their credit limit, causing some customers to avoid making big purchases in stores that do not accept American Express. Other customers like the fraud protection that American Express cards give them, making them more likely to take a chance on a new business if they can use their American Express card.