I find myself siding philosophically with the dissent here. It is a bit ridiculous to let AMEX cut itself off from price competition by disallowing education of consumers by merchants. However, I think the way to combat that practice is by simply shutting them out, by merchants dropping them en masse. I understand AMEX's inclination to provide a first class experience for cardholders at merchants' expense, but it's up to merchants to put a stop to it. May be a risk for merchants losing their richer consumers, but AMEX is overstepping here. Perhaps the SC just forced a reckoning.
3
isn't this exactly like withholding education to a woman about her choices with the health and well-being of her body when she is pregnant?
oops, scotus just ruled the majority that women don't have that choice anymore...
1
As an American Express card holder, if used to find a number of stores that wouldn't accept the Amex card. I'd use another. This is acceptable for sure and that's what these stores should start doing in response to this decision. And while the majority opinion tried to justify it's absurd logic, something needs to be pointed out. American Express doesn't have to support their special services as they don't have any. You pay to get 'membership rewards' - there is an annual fee. And those rewards basically stink. I use it because a) you have to pay it all in 30 days, when the bill arrives and b) as a business, I want everything paid on time. For these judges to indicate that American Express charges higher rates because of their special services, it ignores the fact that Amex has to make money somewhere as creditors don't make money when interest isn't charged, other than what they charge the stores. This whole decision is bogus
3
Wow, talk about judicial activism.
I just want readers to realize that a Supreme Court jurist just made up an economic argument out of THIN AIR, and then made a ruling to justify it
3
Yet another decisions from the Supreme Court that proves we are now a nation run by corporate entities. With their unfettered support of political candidates and decisions on basic human rights we are quickly moving to a white male dominated nation again.
In this case merchants should 'vote with their feet', don't sign any contracts with a credit card organization, instead invest in creating an entity that provides the same services run by that entity. That way you control your own costs.
2
SCOTUS - Another despicable Trump-supporting organization leaning in favors of Trump and the GOP rather than rendering unpolitical decisions. The last refuge of the law has been subverted my McConnell and the spineless GOP eunuchs in Congress who stonewalled discussion of Obama's Supreme Court choice in a blatant move to subvert justice. These are the actions that formulate revolutions.
If businesses would figure out a way to give cash-paying customers a discount (instead of the fees paid to AE or Visa/MC) consumers would win and reduce the blood-sucking power of the credit card companies. If, instead of paying the credit card companies 3% of the purchase price, the retailers gave cash/debit customers a 2.5% discount, everyone would win except the credit card companies, and who cares about them.
2
The right wing hacks make it up as they go along. They create a word/phrase then pretend it explains, when it's only a game to impose a predetermined agenda.
We granted them this bully power starting with Scalia/Thomas. We still haven't learned from history.
13
So merchants want to attract a few additional customers by accepting AE and then avoid the concomitant expense by urging those same customers to use a different method of payment. Cry me a river.
It's really simple. If, in balance, taking AE hurts a merchant's bottom line, then she should drop AE. My guess is that after this ruling, many merchants will do just that.
4
Justice Thomas' and the majority's arguments are specious. He and the other Court reactionaries always favor Big Capital in their decisions -- and what could be bigger capital than one of the nation's largest vendors of commercial credit, the iconic American Express!
The notion that a dispenser of capital and credit is somehow above the laws protecting competition in retail industries has no support in jurisprudence. Simply, it comes from scanning the Business Section, where such nonsense is rife.
None of this matters to the Reactionary panelists. Their job as Justices, as they see it, is to protect the very wealthy from the very poor -- the 80-90% of us who live from paycheck to paycheck and are often only a few hundred dollars from penury -- because "Money is Power," and they want it all.
Thomas' words are all showcase and cant, an entertainment for the untutored masses. If they even read such blather. What they translate into in the financial world, however, is literally billions of dollars a year, and the wrongful perception in our society that Big Capital is our Benevolent Father.
Like so much else these days, there are a plethora of opinions in financial inner circles about how best to save America from the Americans. Problem is, in America, we don't fancy catering to stuffed shirts commenting on what it is that will make all of us happy, but them most of all. Because when the investment ship sinks as always it does, they will be closest to the lifeboats.
8
I used to use amex because they claimed i’d get 5% back at the pump - but after years of my loyalty I did the math - in hundreds of fill ups I never actually got the touted 5%. When I confronted amex the call center rep - with a heavy Indian accent and a prolonged wait - explained they had no way of knowing if I actually bought gas. (So why advertise this benefit?) Needless to say I think amex is deceitful and not deserving of my business. Today I can add anticompetitive to my assessment. Dump Amex.
12
Its called capitalism, something a leftist with food stamps and an Obama phone has no grasp of. That was on the ballot. Trump won. Get over it.
1
Folks, we're talking apples and oranges.
Let's get one thing straight: Amex is NOT a "credit card. It is a CHARGE CARD so the balance is due in full every month, while a CREDIT CARD is a form of REVOLVING credit purgatory, where the amount owed and the length of time it is owed are VARIABLE.
Yes, you can pay off the balance at the end of the month, but it is very easy to slip up, and get charged interest, late penalties, and fees. Of course, Amex can charge a hefty annual fee, too.
Either way, there is no free lunch, but for my money, Amex is more clear cut, and while initially charging higher fees to the vendor, it offers a better value than the blood sucking vampires of Visa and Mastercard.
Does that make this ruling correct? No, but I only use debit cards, or charge cards, and rarely credit cards. And let's not forget good ol' cash, which is still king.
3
This is false - American Express offers many credit cards options across their personal and business portfolios. A simple Google search of "amex credit cards" should point you in the right direction.
I agree, why is no one discussing how Vista and Mastercard late fees affect the poorest users, and often plunge them further into poverty?
Breyer is right. This was an astounding decision. The main effect is probably for merchants to drop Amex. Most people have two or three credit cards so have options.
8
The main effect of this ruling will be to increase the number of merchants who refuse to accept AMEX cards.
In my neighborhood there are already so many merchants who refuse to accept AMEX, it is almost impossible for me to go shopping without having to use either another type of card or cash. I do not understand why AMEX management initiated this lawsuit. It will ultimately do great damage to their bottom-line profits.
4
Credit cards have gotten so out of hand in cost to merchants that in New York City many fine establishments have refused cards altogether and only accepted cash. For those customers who are momentarily “cash challenged” Cash Machines have been installed conveniently and safely everywhere.
In my town, Cash is King.
5
I quit AM Express many years ago for this very reason. We can change business plans by using our wallet and using other cards. I have already educated my children to avoid this company. If enough of us do the same, they may change their policies. To the angry old white guys that run the AM Ex company , please retire your greed is so unbecoming.
5
While I disagree with the Supreme Court ruling, you should be aware that 1/2 of your wish came true. Kenneth Chenault, who retired as CEO of Amex this year, was one of the few African American CEOs.
3
I have considered dropping my AMEX several times due to the annual fees, but I think back to the service they have given me over the years, and the times they have stood behind me when there was a problem.
In a dispute with an A/C repair company years ago, over equipment they had incorrectly installed, I called AMEX to see what remedy I had. The individual on the phone said I had signed the work order, so it could not be reversed, but he immediately gave me a $100 credit toward my account.
In China last year at the silk merchant, where my wife was buying her silly comforter for $1,000, my VISA was rejected. Rather than try and call them collect from China to resolve the matter, I pulled out my AMEX to complete the purchase.
As a former restaurant owner, I appreciate the dilemma of businesses in paying the extra fees. But I also appreciated AMEX support.
Expensive, but worth the service.
1
The two parties in this dispute were mostly small retail businesses vs American Express. The big corporation won in the SCOTUS. Any surprise there?
8
Given the choice between two retailers, one of whom will not take Amex, I always choose the one that takes the card, because of Amex service in case you need it. And I am willing to pay the annual fee to Amex for that service rather than using a free Visa.
4
AMEx service? Refund is available via any large bank card. In a case of fraud, Citibank honored my allegation that the card numbers were used in Turkey, while I was in Florida, using the same, real, card, after a surreal phone conversation, for me. Most consumers want fraud protection, not unnecessary greed from their card. Especially for Costco, which declines to use AmEx, their preference for Visa over AmEx assures me that they are cutting their expenses in order to offer their best prices. So, again, the wealthy get to cut into my spending. Arranged by Republicans.
2
No law says anyone has to use Amex.
10
This isn’t just about AmEx. It sets a precedent,
3
This decision will result in higher prices for those who don’t use AMEX. Please read the article.
NOt a surprise, the conservatives side with big business over people. Another reason I will NOT vote for Republicans.
9
Big business over people? So you're saying the 'people' have no other non-AMEX option like Visa/MC or cash?
The market will sort this one out and AMEX may be the loser in the end.
1
What about the merchants First Amendment right to express his opinion to customers?
5
Doesn’t apply. Government’s not involved.
The lengths to which this Republican Supreme Court will go to torture logic to justify the power of huge corporations knows know bounds. If the rights of individuals to fair treatment at the hands of the wealthy and powerful come up against the rights of a big business to amass monopoly power, it's Monopoly every time on a 5-4 vote.
Gotta love Thomas, so uninterested in the issues of our day that he literally sat silent on the bench for over a decade, writing this dim opinion defending the right of American Express to silence small business owners. Guess we finally found something he cares about.
12
It's hard to find a merchant that accepts Amex in northern Wisconsin. An increasing number simply do not subscribe.
Uh-oh
If this is any indication...
Getting a sinking feeling about the Janus decision coming up this week
4
Another corporate friendly and illegitimate SCOTUS decision. When you steal a supreme court judgeship to get the decisions you want, all the fruit of that tree is rotten.
McConnell, Comey, Putin, and Trump.
Never forget how we got here.
10
Let's not also forget the Clintons and the DNC.
3
Rocky, you're right. It's not as catchy but you can throw in all the lies about the Clinton's and the hacking of DNC emails by the Russians.
So Justice Thomas is now an expert on the value chain of American Express, with a deep understanding of and insights into where and how they make money
Who would of known?
6
Then when their Amex contracts expire, businesses big and small can choose not to renew them, and they should exercise that option.
7
This will cost average consumers billions. We just got robbed. Thanks SCOTUS.
4
Corporations are people too, my friend. People? Not so much.
7
Merchants could also adopt a policy, implemented by their computers, that posts a cash price. Customers who pay with credit cards would then pay the fees that the credit card companies charge the merchant. Alternatively, merchants could have a price if cash is paid and a slightly higher one if a credit card is used. I have already seen the latter.
2
Our dentists already use something like that - you get the bill on date of service. You choose - 30 days net, check 10% discount, credit card on the spot 5% discount.
1
This would violate their agreements with companies like MasterCard and Visa, which say you can't offer a discount for paying cash. Also, no one caries cash with them anymore
My goodness this court (no longer in uppercase as it is now at the depressed depths of rational inanity, undeserving of even that respect) really has become a laughing stock —yes, monopolists are running all the way to the bank laughing and laughing.
6
So Thomas and the other 4 justices are now working for AMEX?
Explaining their 'platforms' to justify limiting competition is
simply insane.
Corporate rights before human rights is where we are at folks.
4
Merchants! Be careful. Read all the fine print of your agreement with your merchant services company. You may have agreed to accept cards you prefer not to take - it may be problematic just to stop taking a card you agreed to accept. Also, make an effort to understand the INTERCHANGE FEES taken by the card-issuing bank from your merchant services company. Merchant services companies pass these fees along to merchants with their swipe fees and depending on the type of card, these charges can add 3-9% or more to what the merchant has to pay – depending on the conditions of the sale and the type of rewards/services the card offers the consumer! AND finally, before you charge a fee or surcharge for use of a credit card, make sure it's legal in your state to do so! If not, it may be possible to raise your prices to everyone (with notice) and then offer discounts for cash or checks or wire transfers. I made this change more than a couple years ago and now when I show the "cash" discount on my estimates and invoices, most customers are well-pleased to pay less. Some customers have a hard time getting it, so I show them the monthly merchant services reports I used to get and explain interchange fees to them, until their eyes roll. My biggest problem with AMEX was the time it took to deposit the money in my company account – the net fee amount I paid was usually less than VISA and MASTERCARD.
1
What if the merchant just posted the swipe fees for the cards they accept, or would this still be going against the ruling? They're not verbally steering the customer to another card. The customer would simply be making an informed choice from a visual.
If I'm stuck without cash for a purchase I usually ask if a credit or debit purchase would be cheaper for the merchant.
That is a nice idea. Along those lines, for many years I have been paying restaurant service tips in cash because I read that restaurant owners often deduct the swipe fee from the tip if it is paid on the card. I also draw a line through the tip line on the bill to make it look like I left nothing.
2
We once had discrepancy on the credit card bill that left out the tip amount from a restaurant outing. We went back to the restaurant to make it right with the waiter. She told us that tips on a credit card receipt don't always make it to the wait staff. We have strived to leave cash for tips since then.
Would it be illegal for business establishments to post a notice that there would be a 5% surcharge for goods/services paid for with American Express? Wouldn't that be within the rights of a business owner?
2
Fairfield hotels already charges a 5$ fee for using Amex.
Not legal in many states.
I will point out that a number fuel stops list both cash and credit prices.
I'm using cash more and more, leaving the cards for transactions on the 'net when ever possible. A bit slower but then, there is no surprisingly large bill at the end of the month, either.
i had Amex card briefly to establish credit 35 to 40 years ago. made payments properly for a year, then got a Visa card and have not used Amex since.
4
Did our U.S. Supreme [sic] Court believe credit card purchases and fees were a new phenomenon that should be phased in to anti-trust laws? Did this same court not realize American Express markets several type of credit cards; some with no credit limits and some-with?
This ruling is Exhibit A for abolishing life-time appointments for everyone wearing the robe.
3
The conservative court's command of basic logic is next to non-existent. Very reminiscent of the tortured absurdity of the citizens united ruling.
Please recall the accusations in the Reagan dark ages of the scourge of activist courts. This court is the most appallingly activist court ever. It is obviously intent on a radical anti-democracy Libertarian agenda.
The whole notion of corporations and their charters has to be returned to the strict constructionist time period of the founding as long as the Justices rationalize their "thinking" that way. For that matter, it should be done regardless of this court's corruption. Corporate power is absolutely out of control.
4
The failure of this court session on so many issues that are really common sense and in the good of the most interested, that is the common citizen, is shocking.
In order to come to the conclusions they do, some of the justices have to 'gerrymander' their thinking in ways that baffles the wisdom of Salomon.
8
The Republicans stole a Supreme Court seat by failing to perform their Constitutional duties in 2016, and we will now suffer the consequences of decisions like this.
This particular decision may or may not be good for consumers, but it is very clear that Republicans have no qualms about gag orders -- whether the gag orders be for the benefit of large corporations or to suppress health-care options for women around the world. The truth is not always convenient, but gag orders are profoundly un-American.
5
I have to wonder how much of a negative impact (if any) losing Costco had on AMEX.
7
On one hand, this just gave a rather permanent end to any remaining worries of already-convicted monopolist Microsoft, which happily STILL buys and muscles its way to ubiquity with Windows on prebuilt computers, and foists proprietary "standards" like exFAT on storage media and OOXML on documents (and earns fees for doing so!). They should be in jail, not being called a "nicer" company just for not having Gates and Ballmer around. Because they definitely deal with both businesses and people (what are these "consumers" this article keeps on about?), this ruling lets them off the hook for good. That's bad.
On the other, Visa's executives must be in full pizza-dance-party-with-confetti mode, now that they can re-run their old "but they WON'T take American Express" TV spots and are about to be utterly correct. The comments here alone portend a massive blowback, but that Amex got all litigious at all suggests they're bleedin' cash and a Chapter 11 (or 7?) is not far behind to make it all moot anyway.
Considering the propagation of Venmo, Circle, etc., it won't be long before credit cards go the way of the horse and buggy.
1
The issues are the same since merchant fees are what brought this matter before SCOTUS.
Shocker.
REPEAL CITIZENS UNITED.
24
The simple solution is to cut up your AMEX card and encourage your friends to do the same.
16
"The business of America is business." - Calvin Coolidge
Coolidge was Reagan's presidential idol. The majority opinion here continues the cravenly mercenary ethic of Reaganism. Frighten the populace enough, particularly about their economic prospects, and they'll blindly go along with you, duped into thinking they're supporting "free enterprise." That's how we get Reaganism, Thatcherism, Bushism, Brexit, Trumpism and "What's the matter with Kansas?" (Though Kansas has come to its senses a bit. Meanwhile, the infection spread to many of the other states...)
Ah, life in the time of pampered oligarchs in the United States of Grifters... while the nation's and world's looming problems back up. They can only back up so far. But what's your problem?! Have another glass of bubbly!
12
Basically, a libertarian nightmare. The fundamental basis of the neofeudalist Libertarian "philosophy" is a rationalization for greed. Not only is this an inaccurate way to approach economics, it is an even worse way to approach public policy. (FYI craven means cowardly. I think you are looking for a word more along the lines of cynical.)
1
I see your point - it is cynicism, but it must also be said that politicians and judges who just go along with the big money are cowardly as well as cynical. And, as I write this - and speak it to myself as well, I see that cynicism is a form of cowardliness. So our comments have led to insight. That's a good thing.
AMEX is not accepted by many merchants because of higher fees. The market always works the way it should.
8
No surprise given the makeup of the Court. One of the harmful impacts of the election of the Apprentice. Gorsuch tips the balance in a way that is harmful to consumers and, in this case , small businesses or merchants.
16
Makes one wonder what Justice Gorsuch promised Trump to secure his job.
3
Still think Justice Kennedy is a swing vote? No loss if he retires, for Trump will put someone else just like him in his place. The public should stop taking these "news outlets'" word as gold. Think and analyze for yourselves. Stop acting like sheep.
1
If Trump appoints Kennedy's successor, you can kiss Roe v. Wade goodbye.
1
“But credit card networks create “two-sided platforms,” Justice Thomas wrote, and they “differ from traditional markets in important ways.” Since card companies deal with both merchants and consumers, he wrote, people challenging actions as anticompetitive must take account of the effect on both sets of market participants.”
That’s some convoluted mental gymnastics you got there, Justice Thomas. I would expect nothing less from a corrupt, elitist Republican such as yourself.
9
Kind of like claiming that two wrongs do make a right!
The hijacked right-wing Supreme Court and Merrick Garland's stolen seat and corporate staffer Neil Gorsuch comes through for Greed Over People.
Heckuva job, Grand Old Putsch.
I think I'll cancel my AMEX cards.
Yet another reason to vote Democratic the rest of my life.
48
Seems to me that unless the merchant has a very large upper class clientele, they simply do not renew with American Express and tell AMEX to "pound salt".
44
Simple cure, merchants---don't take AMEX.
33
Well this seems to easy... just stop accepting Amex as most often the case in Europe. Why bother?
22
This seems far-fetched, but what the heck. The question--could a creative lawyer file a lawsuit against Mitch McConnell for his subversion of the process by which we have historically nominated and confirmed justices to the Supreme Court?
23
One must assume that creative lawyers were thinking through their odds 2 years ago
1
Short answer: No.
Long answer: No. There is no obligation for the Senate to confirm any nomination.
3
If Thomas and Gorsuch side with American Express, then they probably own stock in the company.
29
Way to shoot yourself in the foot, AmEx!
21
Perhaps if merchants band together and refuse to accept the AMEX card, those cars customers will no longer regard the wonderful rewards they cannot access as not worth having and will switch to another card provider. One can only hope!
12
Such would likely be considered an anti-trust act by this court since it wouldn’t serve two masters.
Well no one can see they didn't see this coming.
Welcome to the Trump Supreme Court - we are open for business along with our legislative and executive branches. Thanks GOP- you hit the trifecta.
God help and bless Amercia
37
I founded and operated a small chain of retail stores here in Portland in the 1980's and 90's. I only took VISA and Merchant's Choice cards, because of AMEX's high fees. Any customer who offered to pay with AMEX and was told we didn't accept it, always had a VISA or MC card to pay with and I never lost a sale. Come on merchant's, you don't have to take AMEX.
79
You probably never noticed the lost sales. If a business ever refused my Amex card, I would find a way to complete the transaction on that one day. However, I would forever avoid that establishment afterwards knowing the business was making life more difficult for me. There are very few places I shop that are both essential and unfriendly to Amex. The only industry I can think of is contractors and they tend to refuse all credit cards when possible.
5
I use AMEX most of the time, especially for large purchases, because of the support I've occasionally needed over the decades. I also belong to their awards program. When a retailer or restaurant refuses my AMEX card, I pay with Visa and make a mental note to go somewhere else the next time.
16
It appears your bar for determining “difficult” is extremely low. If that’s all it takes, you live a very charmed life.
2
Within 10 minutes of Public Radio telling me of the decision, I called Paypal (our merchand account) and had them remove Amex from our list of accepted payment methods. That way I'm not doing anything illegal when I tell customers that I (now) cannot accept that Amex card - where formerly it was that I preferred not to accept it.
Good luck Amex.
66
Bizarre decision, but consumers have a fairly simple recourse if they disagree with it: Use Mastercard or Visa.
While it may be harder from a small business perspective for merchants to pull down the Amex sticker and no longer accept it, I now see no problem in these businesses banding together in certain geographies or industries and collectively agreeing to not accept Amex (while previously this may have been an Antitrust issue, it seems like SCOTUS wouldn't mind).
9
Speaking of bizarre, I hope that your comment that small businesses can collectively agree not to accept AmEx cards was a bad joke. Outright cartels of buyers are as bad as those of sellers.
This is already happening. Very few merchants (mostly large chains) accept Amex. It is almost impossible to use the card there unless it is at a big hotel.
2
All credit/charge cards cost the retailer to accept them. If these fees were added as a separate line item to the cost of the purchase, we would start paying by cash or check more often. The primary advantage to the retailer is apparently people spend more when they aren't having to actually put out the cash.
6
What is a "check?"
2
A check is a rare artifact. A paper slip calling on a specific bank to disburse funds in payment for goods or services rendered on behalf of their client. You'll most likely find them in museums. I believe the practice dates back to the Romans.
Why don't merchants just stop accepting American Express altogether. While many people carry only a Visa or MC, and many people carry both Visa/MC and Amex, I suspect that there is almost nobody who carries only Amex.
If merchants can't suggest that customers avoid using Amex, then why not just not accept Amex? If they can't say, "We accept American Express but prefer that you use something else," they can surely still say, "We don't take American Express." Nobody is going to leave a purchase on the counter, because nobody doesn't also carry Visa or MC.
10
I would venture that Amex cardholders probably spend more (either larger ring totals or more visits to the merchant or both) and further that failing to have the entire gamut of charge cards posted on the door/register implies less than optimum service. Kind of why a mom and pop plumbers van I was behind today had the logos of virtually every social media app on the back.
2
That is exactly what will probably happen: Less business will take Amex and, in the end, this will hurt Amex customer, and Amex bottom line. So it looks like a very Pyrrhic victory to me.
1
Cash, of course, costs the merchants nothing.
Debit and credit cards are touted as so much more convenient (meaning more expensive) that a card only mentality seems to be taking over all purchase transactions.
There is nothing in this ruling that prevents me from asking which card, Visa or Amex, charges less in fees whenever I make a purchase.
And I see nothing here preventing a business from answering that question as part of being polite to a customer.
Even using Visa, if there is a choice of how the card is charged, as debit or credit, I always ask which costs the seller less.
It's in my best interest to help the merchants I want to do business with 5 years from now save as much as they can on all the nickle and dime fees charged for any electronic transaction.
5
Back in the day, people seemed to think having an American Express card made them special - and they had to pay an annual fee just to use it, suggesting only an elite person of means could qualify for one.
I thought they were nuts. Never have I, nor will I pay a credit card company for their privilege to make money off of me.
More importantly though, this ruling is evidence on top of evidence as to just how corrupt the republican SCOTUS majority is. They've completely given up any pretense of the impartial interpretation of law.
I despise trump. I despise mcconnell more.
14
I don't think that's why people ever had an American Express card. It's because if your item is lost or stolen Amex will replace it. You get points and get early access to tickets to sporting events and concerts. If there are fraudulent charges, they are a lot easier to contest, etc. They treat their customers much better and those who can afford it think it's worth it. People who can afford the extra customer service are willing to pay the annual fee. You will notice, over the years, that everyone else came up with various cards - like airline cards - to compete with Amex and offer better products to the consumer. I am also a staunch Democrat, by the way.
2
I think it's necessary to clarify how the credit card market functions, based on some of the responses here. When a customer uses a credit card, the merchant pays a fee to his card processor. This is mistakenly referred to as a swipe fee by legislators, but in reality it's a collection of fees which are payable to the card network, the clearing bank, the merchant bank, the bank that issued the card, and the merchant's card processor. The card company charges a base rate, plus various surcharges, inclucing fees for "programs", which are usually customer points or miles promotions . These fees are paid on each transaction by the merchant, and indirectly find their way back into the merchants costs and pricing.
Because the customer doesn't pay these fees directly, the customer is always motivated to use the richest rewards program. This forces cost onto the merchant, which finds its way into the price of everything he sells. The result is that the guy with the most expensive credit card forces the most cost onto other customers. An Amex transaction costs approximately twice as much as a Visa or MC transaction.
This decision prohibits any inducement by the merchant to encourage the use of lower priced cards. So they can't place surcharges or offer discounts to customers. I think this is a Pyrrhic victory for Amex, because they really can't force a merchant to sign up. Few people use Amex as their sole card, so few lost sales will occur if a merchant cuts Amex out of the mix.
24
Merchants can and do offer discounts to customers who pay cash.
4
You are looking at it from the point of view of the merchant. From the consumer's viewpoint, there are many more types of credit cards available - from airline cards, to cash back, to loyalty, issued by a variety of issuers. This competition in the card industry is all due to Amex - because Amex always offered extra services and rewards to its customers - and customers were even willing to pay an annual fee for those services. Other issuers had to come up with various ideas to compete. Many high end consumers do use Amex as their only card, which is why shops take it. Those are the customers people want.
1
Totally agree with you in that this is a Pyrrhic victory for Amex. What they will achieve as a result of this decision is that even less merchants will want to take the Amex credit card, and that will directly hurt Amex card holders.
I have been an Amex card holder for over 20 years. Except for a brief period of time when they sent their phone customer service to India and I was about to cancel my card, Amex has always had outstanding customer service. Much better than any other of the bank credit cards, and that is why I love them.
But a lot of merchants, especially the small ones, don't take the card, and that bothers me. Not to mention that the situation is even worse abroad. Finding someone who takes Amex in Europe, outside of big hotel and restaurant chains, is an almost impossible task. I am afraid it will only get worse after this decision. And I don't think Amex needed it.
Amex establishes customer loyalty through their customer service and programs. If a merchant takes Amex, no word from the merchant will convince me to pay with another card.
If I were an Amex executive, I would have gone in the exact opposite direction, I would have tried to lower the merchant fees. If more merchants took Amex, the number of transactions with the Amex card would probably double or triple. Why they are not looking at things this way baffles me.
2
Local merchants and restaurants/bars/grills appreciate cash. I always turn down their "rewards card,"too. I want them to remain competitive and stay in business. As for buying from giant corporations like Amazon or Costco, I will use the credit card that gives me the most back, i.e, Amazon Prime or Costco Visa. At Lowes I will use their AMEX card because on Black Friday they have tremendous reductions of high end appliances. But, as Yogi Berra would say, "Cash is as good as money" and the best way to pay local businesses
5