E-Complish Encourages Merchants to Say: “Yes, We Do Take American Express”

Amex Has Lowered Its Merchant Fees to Their Lowest Rate in 20 Years, and E-Complish Is Encouraging Its Clients to Jump On Board.

Customized payments processing solutions company E-Complish is excited by the historic lowering of American Express (Amex) merchant fees, enacted last month under the leadership of new CEO, Stephen Squeri, who took the helm on February 1st, 2018. E-Complish wants to encourage its client merchants to start accepting Amex accounts while the rates are at this historically low.

Squeri’s move, which he describes as being one of “conscious tradeoffs,” is part of a strategic plan to get more merchants to accept American Express cards. The tradeoff is that the move will cost Amex hundreds of millions of dollars in profits per year, at least for the next couple of years. But in the long term, the famed credit card provider is expected to become more competitive and financially stronger.

E-Complish CEO, Stephen Price, says of American Express’ new strategy, “We applaud American Express for their new rate strategy! Not only is this smart for American Express, but it will open the doors to merchants to accept American Express from higher earners that typically spend more.”

As of the beginning of 2018, Amex was accepted in approximately 1.3 million fewer locations in the US than competitors Visa and MasterCard. This was after adding approximately 2.4 million new acceptance locations between 2013 and 2017, including 1.5 million added in 2017 alone. The card is even less competitive internationally.

american express cardAmerican Express, historically, has not been as readily or widely accepted by merchants as its rivals in the credit card business. There has been a small handful of reasons for the reluctance on the part of merchants.

Amex has targeted and typically provided credit cards to higher earners who spend more money. It is no secret that Amex has some of the most loyal customers, called members, in the industry with the top-rated membership points plan in the industry. This has resulted in the company’s business model justifying higher merchant fees as the cost of doing business with a card provider that facilitates a higher volume of sales at higher average prices.

Furthermore, the company utilizes a “closed loop” processing structure which is more expensive to maintain (and which results in it taking longer for merchants to get paid). Amex is both a payment processor and card issuer, unlike MasterCard and Visa who let local and national banks issue credit cards for them while “riding horseback” on the merchant’s choice of payments processor.

Finally, the Amex business model is structured to profit by way of higher fees to keep interest rates lower and, therefore, the company’s cards more attractive to customers. The company has long called the fees that it charges merchants a “discount rate.” But, these fees have always seemed excessive compared to those of Visa, MasterCard, and other competitors.

“At E-Complish we are encouraging all our clients to start accepting American Express and do it now. Where else can you instantly tap into a reservoir of high earning, good credit consumers that typically spend more money per purchase and pay on-time? It’s a no-brainer to accept American Express with the rates being this low.”, says Stephen Price, CEO