New Options with American Express for Small Businesses

American Express has come out with a new program called OptBlue, where the final processing rates and fees paid by the merchant are set by the merchant account provider, not American Express. This is similar to the way providers set rates and fees for Visa, MasterCard, and Discover. This new program is set up to be a win for merchants, providers, and American Express. Small businesses that don’t currently accept American Express may want to take another look under this new program.

The program is attractive because you can lower your rates on American Express transactions and have one deposit for all your card brands. This allows you to have a consolidated statement, easier reconciliation, a single point of contact for all customer service needs, and faster receipt of funds. Merchants should consider the benefits and limitations of OptBlue, below are some important things to know about the program.

  • The OptBlue program is available to most merchants who process less than $1,000,000 a year in American Express.
  • There may be an additional fee to merchants who process more than $500,000 of American Express sales per year.
  • Merchant account providers receive wholesale rates from American Express, in a similar fashion to the Visa, MasterCard, and Discover interchange rates. However, the American Express wholesale rates are more simplistic and mainly a function of the merchant’s industry and sale amount.
  • The wholesale rate to the provider is basically broken down into three tiers based on the sale amount. For the average ecommerce merchant, a sale less than $150 is at the lowest rate, a sale of $150.01 and $3,000 will be at a higher rate, and sales above $3,000 will be at the highest rate. The rates and tiers vary by industry.
  • American Express charges a network fee in addition to the main wholesale rates, just as the other card companies have assessment and access fees in addition to the interchange rates.
  • Additional fees may apply for international cards or card-not-present transactions, similar to Visa, MasterCard, and Discover.
  • The final rate paid by the merchant is a combination of the provider’s mark-up, the wholesale rate, additional American Express fees, plus any other fees the provider may include. Just like with the other card companies, it’s the provider’s mark-ups and extra fees that are negotiable.
  • The provider essentially owns the merchant relationship. Therefore, underwriting, chargebacks, and general support will be handled by the merchant account provider.
  • The provider funds the American Express transactions and those transactions are stated on the same monthly statement you receive for your Visa and MasterCard transactions.

Not all providers are offering the OptBlue program because there is an investment on the part of the provider. *American Express card members typically spend more on their American Express Cards than other card holders spend on their non-American Express credit or charge cards, and the average American Express transaction was higher than the average non-American Express credit or charge card transaction. *(Based on data reported by Nilson in 2011.) American Express can bring bigger sales to small businesses and gives customers more payment options.

Interested in the OptBlue program? Consider Metro Merchant Services to get a low rate for all of your processing. Their first step is to provide you with a free rate review – or side by side comparison of your current rates and fees and what Metro Merchant Services can offer. Call us today 800-771-3719.