How can I reduce American Express transaction fees?
THIS PAGE IS NO LONGER CURRENT AS OF 8/16/2012. It will be updated later. Please read blog articles for more current information, or download the latest American Express Merchant Reference guide. https://merchant.americanexpress.com/accept-card/merchant-account-fees
You can eliminate the American Express merchant per transaction fee normally charged, with a little bit of work and the right processor to support it.
Your terminal is programmed to dial Amex direct American Express transactions, and your other merchant number for VISA, MasterCard and other transactions. When this happens, the transaction fee normally charged (.25 cents for each transaction) is eliminated.
AMEX Reverse PIP
Reverse PIP further reduces fees through split settlement. By using split-dial for American Express , and reverse PIP (“split-settle”) you’ll eliminate any costs from your processor and only incur direct Amex costs.
If you have an American Express auth fee, or authorization fee, you may still incur the fee on some host based systems. Check with your processor to see if you can use either of the above methods to bypass the per transaction fee.
Unlike Visa, MasterCard and others, American Express does not have a complicated interchange system, and the processor does NOT control your rate. American Express issues merchant accounts directly. The others do not. Your merchant processor may offer you an American Express merchant account. This is simply to make the process easier when setting up a new account. The price fields can be left blank because they are set by American Express based on your SIC code and how you sell (internet, phone, retail). However, if you have a special negotiated price (rare in small to mid size businesses), then the new processor needs to know what the plan code is.
Is your account priced properly for American Express? Amex uses specific codes to determine your rate. If not assigned properly, you’ll pay too much.
What are codes and rates? Visit American Express merchant account rates by industy.