Many business to business merchants don’t accept American Express because of the real or perceived high cost of merchant fees and risk of dispute losses vs. the negative impact on profit margins. Here’s a fresh look at the reality of accepting American Express cards in 2019, including as compared to other card brands.
Top Reasons To Accept Accept American Express
- Average higher order. Your best customers are also using American Express for corporate purchasing. You may be losing business by not accepting the cards. For example, an actual merchant 1.7X higher average order than other cards.
- Higher annual spend. For example, an actual merchant has 3.0 X higher annual spend from American Express buyers than other cards.
- Merchants can completely offset the cost of acceptance, usually by surcharging as explained in this article Credit card surcharge rules and laws 2019.
- Amex SafeKey provides card not present fraud liability shift as do other card brands. If merchants support it for customer initiated payments, whether online pay portal, invoice click and pay, or ecommerce, they’re protected from friendly fraud ‘it wasn’t me, I didn’t authorize it’ chargeback losses. Rather than defend the chargeback, prevent it from happening and fighting to get your money back.
- Customers can take advantage of your early pay discounts and also use the The Pay Over Time option from American Express to extend their cash flow. You get paid on time to improve your cash flow, and customers extend their credit with someone else to manage their cash flow.
- Free business promotion. It depends on your business, but in some cases, especially small businesses, American Express does a lot to promote your business online and via other methods. How valuable is that?
- Rates may be lower than you think. Fees have broadened into more categories by card type over the years so it’s not just one rate for everything. You may be able to negotiate if you’re a very large business. The biggest expense for other card brands is interchange; if not managed properly, fees may be the same or higher than American Express depending on the card type.
- The Christine Speedy difference. Managing credit card fees is critical, and so is understanding the nuances of credit card processing that impacts all merchant fees. The reality is most players in the payments and consulting industries are not familiar with rules that impact your profit and risk. Call 954-942-0483, 9-5 ET for expert advice about all things credit card processing.
Effective October 1, 2015, Paypal will remove the tiered merchant rates for US domestic and international Purchase Payments. The changes don’t apply to PayPal Payments Pro users and Virtual Terminal. PayPal Payments Standard and PayPal Express Checkout users will have a rate hike.
The new rate will be the standard rate of 2.9% + $0.30 USD for domestic transactions and 3.9% + fixed fee** for international transactions. Card-processing rates on PayPal Payments Pro and Virtual Terminal are not changing.
Paypal rates October 1, 2015:
Standard 2.9% + $0.30
Mobile In-Store Payments rate 2.7% + $0.30
Nonprofit rate 2.2% + $0.30
Paypal international rates October 1, 2015:
Standard 3.9% + fixed fee
Mobile In-Store Payments rate 3.7% + fixed fee**
Nonprofit rate (under $100k/mth) 3.2% + fixed fee**
Nonprofit rate (over $100k/mth) 2.9% + fixed fee**
Paypal current tiered rates:
Domestic Purchase Payments transactions in U.S. Dollars
Prior month’s sales volume Fee per transaction
$0 to $3,000 2.9% + $0.30
$3,000.01 to $10,000 2.5% + $0.30
$10,000.01 or greater 2.2% + $0.30
International Purchase Payments transactions
Prior month’s sales volume Fee per transaction
$0 to $3,000 3.9% + fixed fee**
$3,000.01 to $10,000 3.5% + fixed fee**
$10,000.01 or greater 3.2% + fixed fee**
*Sections 8.2 (b) and 8.4 (c) of the PayPal User Agreement
**Section 8.4 (d) of the PayPal User Agreement. Click here to see Paypal International Fixed fees vary by country.
Paypal Pro fees:
These are the fees posted on Paypal web site now.
- $30 monthly fee
- 2.9% + $0.30 per transaction
- 3.1% + $0.30 per domestic transaction; additional 1% for cross-border transactions
Paypal Pricing for Add-On Services
Recurring Payments: $30 monthly
Advanced Fraud Management Filters: $20 monthly + $0.05* per transaction
Account Monitoring: $29.95 setup + $19.95 monthly
Paypal Additional Fees
- International Sales: The pricing table above applies to domestic payments in US dollars. There’s an additional 2.5% charge for any currency conversion and a 1% charge to receive payments from another country
- Chargeback Fee: $20
- Uncaptured Authorization: after a successful authorization, you’ll be charged if you do not complete the sale using PayPal Payments Pro: $0.30 per uncaptured authorization
- Card Verification Transactions: used to verify that a cardholder’s account is in good standing without processing a purchase transaction: $0.30 per submission
- Refund Fee: Fixed fee portion of the original transaction fee (for example, the refund fee is $0.30 for domestic payments)
- American Express® card usage fees: 3.5% per transaction on PayPal Payments Pro, PayPal Payments Advanced and Virtual Terminal
Click here for the official Paypal rates and fees.