AMEX payment processing is poorly understood in Europe by e-commerce business owners. This is especially true for merchants in high-risk industry categories.
Visa and MasterCard often get mentioned in all of the conversations. However, as a merchant in Europe, accepting AMEX is a little more complex.
Getting this type of payment option can open up a whole new customer base and increase conversions. But it’s important to know how to implement this card type to your checkout, if you are permitted.
As a merchant, American Express is one of the card networks to explore if you cater to US and Canadian buyers. However, most merchants are unsure of whether or not to accept AMEX cards. For some, it’s a matter of pricing. For others, it’s the hoops to jump through to get approval for high-risk credit card processing.
However, the amazing payment processing solutions that come with accepting AMEX cards make it an endeavor worth pursuing. We will discuss merchant pricing for AMEX cards, how users in Canada and Europe can use this platform, and also prevent a chargeback on high-risk payments.
All you need to know about AMEX merchant pricing
American Express is something of a mystery when it comes to credit card payment processing. Unlike Mastercard and Visa, it’s not an open network. In other words, AMEX is the only entity that can issue its cards and allow for merchant payment options.
Due to this limit on high-risk credit card processing, they have a lot more control over how much merchants pay to accept its cards. There are no definitive figures anywhere, but this is an assessment of the landscape of fees Amex charges for different categories:
Lodging Payments (B&Bs, Hotels)
- under $100: 2.25% + $0.10
- $100-$1,000: 2.6% + $0.10
- above $1,000: 3% + $0.10
General Retail Payments
- under $75: 1.6% + $0.10
- $75-$1,000: 1.95% + $0.10
- above $1,000: 2.4% + $0.10
Other payments that merchants have to worry about include:
- Network fee (0.15%)
- CNP surcharge (0.30%)
- Cross-border fee (0.40%
- Voice authorization fee (0.65%)
AMEX vs. Visa and Mastercard
In terms of pricing, Visa and MasterCard seem like the more favorable option. However, it is also key to factor in the amount of US-based consumers that use AMEX. The American Express Card is the most popular credit card in 23 countries, including the US and UK.
Therefore, for merchants in Canada and Europe, accepting AMEX cards for high-risk credit card processing can be a huge plus. In the same vein, the risk of chargeback and fraud is a genuine threat. In 2018, the US got the crown for being the country most prone to credit card frauds.
Luckily, it’s possible to avoid scams and chargebacks on your merchant account. At DirectPayNet, we’re knowledgeable about an abundance of risk management tools, risk navigation techniques, and automated fraud detection resources. More importantly, this is efficient for avoiding chargebacks, refunds, and frauds.
Contact DirectPayNet to get guidance on and set up with seamless AMEX transactions as a merchant.
Common misconceptions about processing AMEX orders
- Amex is not popular among consumers: This isn’t true. In fact, there are over 150 million AMEX users. More importantly, they spend 50% more compared to other cardholders.
- AMEX doesn’t care for merchants: Tools like AmexOptBlue offer next-day deposits for all card transactions. This applies to merchants in Canada and Europe.
- Cost of accepting AMEX is too high: Interchangeable rates depending on brands, as well as the absence of ancillary fees, can make it a bargain. Also, the OptBlue program now offered by most payment processors, gives merchants more reasonable fees. If you’re applying for Visa and MasterCard merchant account, the AMEX OptBlue program allows you to add it with no extra application making it simple and quick to accept AMEX.
How to get approved
As a merchant, there are two ways to get AMEX payment processing for business. The first is to go through a merchant service or payment provider with the OptBlue program while the second is to go directly through the AMEX card network.
The first option through OptBlue is the better one in terms of merchant pricing. AMEX offers these payment providers wholesale rates so you could end up paying the same price to accept AMEX as you are for accepting Visa and MasterCard. Consequently, the aforementioned payment providers offer high-risk American Express card processing as a part of their services. Depending on the brand, it’s possible to find a great deal that works for business. Note that this works best for companies operating in the US.
Going directly to American Express is an excellent option for larger businesses in Europe and Canada. Depending on the volume of transactions, it’s possible to get wholesale pricing that favors the cost of doing business. Additionally, even with a direct AMEX agreement, it’s possible to use the same payment gateway you use for accepting Visa and MasterCard.
Why high-risk merchants in the EU and Canada avoid AMEX
The answer to this question is a simple one — merchants want to save more money. American Express depends majorly on merchants for revenue. As a result, it’s not uncommon for foreign-based companies to pay more to allow for payments with AMEX cards. Before the OptBlue program, AMEX would sometimes cost merchants double the cost of accepting Visa or MasterCard.
In the same vein, most high-risk merchants want to avoid having to go through the stress of fighting chargeback disputes. AMEX heavily favors the end user, so the chargeback burden always falls on the merchant who oftentimes loses the dispute even if it is not their fault. Also, for Canadian based merchants, they may have to pay more due to international cross-border fees. This is a factor that most US companies do not have to contend with.
Finally, it may be impossible for some European-based merchants to process high-risk credit transactions without a US bank. This is a function of location and can be simply remedied by setting up a US office. Below are the requirements for getting one:
- An incorporated business + valid business license
- A business bank account for the incorporated company
- A company owner/director that is also a US resident who can sign documentation and be the contact person for merchant account and bank account related inquiries
- A physical address within the US (It can be a simple setup, nothing too complicated)
- Pre-approval for a merchant account
How to get approved for AMEX processing
Many payment providers are weary to offer new businesses high-risk credit card processing services. The simplest way to get started in accepting AMEX is to ask your current payment processor to add this ability on your merchant account. If you’re applying for a new account, make sure your payment processor offers the OptBlue program. This way you can get started on accepting all cards without extra paperwork or delays.
As to whether or not the business is a high-risk one, that is up to guidelines provided by AMEX. However, AMEX payment processing is not available for:
- Adult entertainment businesses
- Loan collection agencies
- Gold, cash and silver collection agencies
- Gambling businesses
How to fight fraudulent AMEX transactions
One of the primary reasons most merchants avoid getting AMEX payments is the risk of fraud. These simple signs can be an indicator of a credit card scam and help prevent them.
- Ordering too many items, especially when it’s the same one
- Orders made with anonymous email domains
- Payments processed in substantially large dollar amounts
- Delivery to countries with a history of fraudulent claims
- First-time shoppers
- High-volume purchases without regard for size, features, colors, and pricing
- High-volume purchases made just before closing time
- Attempts to rush an order
How to dispute an AMEX chargeback
With a chargeback, a merchant has about 20 days to respond to a “Request for Information” letter from AMEX. Typically, they would have to provide evidence (documentation) that the cardholder holds no legal claim to a chargeback.
This is close to the way both VISA and Mastercard operate. However, for Mastercard, cardholders have more time to dispute a chargeback (120 days).
Contact DirectPayNet for additional help
AMEX payment processing is a great e-commerce tool for companies in Europe and North America. And it’s because of the opportunities it offers to carve a niche in a large market (The US).
Worried about chargebacks, fraud and refunds? DirectPayNet offers a broad range of services to help merchants around the world navigate risk. For example, we can help you detect fraud and assist with offshore compliance. Additionally, we can assist in reducing the chargeback as well as refund rates.