http://www.youtube.com/watch?v=wBJJUWt47rk
When AMEX rolled out its shop-small campaign late last year, I thought it would be a great idea to take advantage of the $25 credit per AMEX card. My family has a total of more than 8 cards and I, as a viciously thrifty shopper as always, made a store split a $200 purchase into 8ths and got the entire purchase courtesy of AMEX. Obviously the store doesn't complain about what I did and I certainly would never.
Gloating aside, AMEX is gearing up in both TV and online via YouTube and Google advertisement, to force feed customers to shop small. Why? I believe the reason lies in how small local stores feel about accepting AMEX - not small-friendly. Now I see more DISCOVER being accepted than AMEX, which is really something AMEX doesn't like.
I believe AMEX sees them losing out on the small business market and believes the return in investment of crediting $25/card is worth while, because at least now the small businesses have to sign up in order to attract clients like myself, ones who wants as much free as possible. By signing up, it requires the business to pay a fee per month, along with the standard transaction costs involved with accepting AMEX, which is long term client building risk AMEX is willing to take.
I think Amex's merchant fee is still higher than all the rest, which has always been the problem.
ReplyDeleteMany smaller establishments don't take AMEX because of the large fees per transaction associated with AMEX compared to Mastercard and VISA. For a lot of companies that issue AMEX corporate cards to their employees, they need their employees to use the AMEX corporate card for expenses, business related entertainment etc. When an establishment does not accept AMEX, the individual employee has to use their personal credit card or cash and then has to submit an expense reimbursement to the company- an inconvenient and time consuming process for someone that travels a lot.
ReplyDeleteAMEX should reconsider its merchant transaction fees to seed smaller businesses and to take market share away from VISA and Mastercard.