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American Express: All You Need to Know

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Danny Randell | September 13, 2021

“American Express is an international credit card issuer and processor. Find out whether your business should accept Amex. (Updated 2022)”
3 min read

What Is American Express?

American Express is a credit card company based in the United States of America. Unlike most cards (i.e. Visa, Mastercard) which are issued by banks, American Express issues its own cards.

Background

American Express is the oldest credit card company in the world, founded in 1850 as an express mail business initially by Henry Wells, William Fargo, and John Butterfield (the former two also founded Wells Fargo). The company branched into financial services fairly early on, but what would make them famous and establish American Express as an international company was the introduction of their traveller's cheques in 1891.

By the 1940s, talks of a travel card had started at American Express headquarters, but their first "card" (made of paper) would be brought to market in 1958, replaced by a plastic credit card in 1959.

Accepting American Express Payments

American Express cards are accepted in businesses across the globe and it is a card that is usually synonymous with larger purchases. While American Express (AMEX) is useful, especially with business/corporate clients, the fees to process American Express have classically been high (comparative to other credit card interchange rates). American Express is working to make their card more acceptable upon merchants and provide some better perks to those who accept their card brand.

It's time to feel good about your payments

American Express OptBlue Program

What is OptBlue, and how does it differ from American Express's traditional processing services? Let's dive into that. OptBlue is a newer program from AMEX specifically designed to offer lower fees and more flexibility for small and medium businesses.

The American Express OptBlue program is designed to encourage merchants with lower processing volume and revenue to accept American Express cards by abolishing a minimum monthly processing volume and making it easier for small businesses to process AMEX cards.

OptBlue essentially offers wholesale rates to acquirers, who then pass those rates on to merchants with their margin attached (which is how credit card processing for other card brands works too). Because Amex rates are passed on to your payment provider, you don't need to change processing companies to use OptBlue.

Traditionally, processing AMEX transactions was a little more complicated- which is true still for businesses processing more than $1M in American Express payments.

Currently, once you clear $1M, you'll need to sign an agreement with Amex directly, essentially opening another merchant account with them. In this way, the company operates quite differently from other brands like Visa and Mastercard. Your processor can take the payments on their POS, but AMEX transactions will be processed through a separate Service Establishment (SE) number which will essentially separate your transactions.

If you are already processing with AMEX and want to switch processors, see if they can automatically enroll you in the Amex OptBlue program when you sign up or transfer your existing SE number and consolidate your payments into one merchant account.

This way, OptBlue can also help streamline your credit card operations since you'll be able to use a single merchant account to process all major credit card transactions, including Visa, Mastercard, Discover, and American Express. This can simplify your monthly statements and the amount of back and forth with your processor- making it easier than ever to accept customer payments.

Amex Fees

Amex interchange fees and other fees will vary based on if you are an OptBlue merchant or not. For Helcim's OptBlue rates, click here.

When you're processing $1M + per annum, you'll need to chat with American Express themselves to get the skinny on what fees you'll be paying, as they can differ for each industry.

Bottom Line: Should I Accept Amex?

Ultimately, the more ways you can accept payment from customers, the better, and that goes for card brands too. By putting an American Express sign in your shop window or on your counter, customers know they can pay the way they want and it only further encourages them to do business with you.

Amex is no longer just for rich consumers or expensive retailers; with OptBlue, accepting American Express is more attainable than ever for small businesses. If you've ever thought Amex was inaccessible for your business, you may want to give them a second look. Again, ultimately, the more cards your business can accept, the more likely you'll be able to tap into different segments of the market!

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