AMEx Merchant Services
Who are Amex?
American Express is a global payments company that issues prepaid, credit, and charge cards to consumers and businesses. In addition to issuing cards, American Express also processes transactions made with AMEX card, including cards issued by third parties.
American Express issues and processes prepaid, gift, credit, and charge cards to consumers, small businesses, mid-sized companies, and large corporations worldwide. Businesses around the world accept payments on American Express cards, similar to payments processed by Visa, Mastercard, and Discover. However, unlike Visa and Mastercard, American Express is both a card issuer and an acquiring bank, so it receives its revenue from cardholders and businesses that accept their cards.
Understanding American Express Cards
American Express cards are issued by American Express and processed on the American Express network. American Express is one of only a few financial service companies in the industry that has the capability to both issue and process electronic payment cards.
American Express has its own processing network that competes with Mastercard and Visa. Its most comparable competitor is Discover Financial Services, which is also a financial service company offering both credit lending and a processing service network. With its multiproduct capabilities, American Express generates revenue from both interest-earning products and network processing transaction services.
In an American Express transaction, the merchant’s acquiring bank communicates with American Express as both the processor and the issuing bank in the transaction process. Merchant acquiring banks must work with the American Express processing network to transmit communications in American Express transactions. American Express is also the issuer that authenticates and approves the transaction.
Merchants pay a fee to American Express for its processing network services, which are part of the comprehensive fees involved with a single transaction. As both a processor and high-quality lender, American Express has built a strong reputation in the financial services industry.
Card Issuing
American Express offers a variety of card products to consumers and businesses. Its card products offer rewards, benefits, and experiences to attract new customers. For example, cardholders can earn cash-back and loyalty rewards, access airport lounges, and receive travel insurance coverage depending on the card.
Merchant Acquiring
Businesses work with American Express to establish a merchant account and begin accepting Amex credit cards. In addition to working with businesses, American Express also partners with other acquiring companies and payment aggregators to make its cards accessible.
Card Network
American Express partners with other banks and financial institutions licensing the brand to offer its own credit cards. For example, its partners in more than 103 countries can launch credits to accept payments in their local currency.
Why accept AMEX as a payment type?
Not every business accepts AMEX Cards, but there are many benefits to doing so.
Traditionally, AMEX Cards have been associated with an affluent lifestyle and spending habits due to their high credit limit, premium rewards and the range of exclusive or invite-only Cards, like the ‘Black Card’. However, an increasing number of UK retailers now accept AMEX payments; in fact, more than 270,000 UK merchants became American Express-enabled in the two years before December 2019. And with 114.4 million AMEX Cardholders globally by this same date, there are many great reasons for UK businesses to look into American Express merchant services.
How can your business benefit from having Amex as a payment method?
Accepted in over 130 countries, with over 100 million cards in use, the American Express payment method is a secure and fast credit card payment method. According to the data, Amex cardholders spend up to four times as much as Visa and Mastercard cardholders. That’s what makes American Express one of the most desirable payment methods on the market. Here are the core benefits of offering Amex on your website/e-store:
Still not convinced?
Becoming an American Express-enabled merchant could be a smarter decision than you think. Here are some key selling points if you’re considering whether to accept AMEX payments:
Regular custom
People with AMEX Cards have an incentive to open their wallets as they can get points towards rewards each time they spend. This means that with an AMEX-equipped merchant service, there’s every chance you can attract repeat visitors.
Spending power
AMEX ‘Cardmembers’ in the UK spend more money – 43% more on average than non-Cardmembers, according to American Express. The same research found that the average pre-tax household income of an American Express Cardmember is 27% higher than a non-Cardmember. Whilst you may face higher fees for taking AMEX payments, this could potentially be offset by attracting customers with high disposable income.
Customer loyalty
According to American Express, 46% of their Cardmembers are more likely to try out a business when they see the AMEX logo displayed, and 52% actively look out for it by doing their homework (online or by calling ahead) in advance. Having that unmistakable blue logo near your card reader could do wonders for your visibility.
How to accept Amex payments
There are no extra set up costs or additional monthly fees involved – the merchant only pays a transaction service charge when a customer uses their American Express Card.
Merchants need to register with American Express before they can accept AMEX payments. Once they’ve done that, it’s advisable to have a card payment terminal that can print receipts, in case of a dispute with a customer, though this isn’t essential for a successful AMEX transaction.
Modern World Business Solutions can save you time and effort by acquiring an AMEX merchant ID (MID) on your customers’ behalf. Simply speak to your merchant client and advise them of the options available and let us know on the application whether an AMEX MID is required.
How to accept online Amex payments
There are three main elements to consider when setting up card payment acceptance online: a merchant account, a payment gateway and a payment processor.
American Express provides a Merchant Account as well as payment processing, which helps to keep things simple. Setting up a Merchant Account is one of the first steps towards accepting online payments.
In summary, here’s how to accept Credit Card payments online with American Express:
Modern World Business Solutions can save you time and effort by acquiring an AMEX merchant ID (MID) on your customers’ behalf. Simply speak to your merchant client and advise them of the options available, then, let us know on the application whether an AMEX MID is required.
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