Why is American Express not accepted everywhere?

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AceH
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Why is American Express not accepted everywhere?

Postby AceH » Sun Dec 05, 2010 5:37 pm

Why are American Express Cards NOT accepted at as many places as the other "less prestigious" cards?


meester kneel
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Postby meester kneel » Mon Dec 06, 2010 10:06 am

Because they charge a higher transaction fee that Visa or MC. Visa and MC might charge 1 to 1.5% of the purchase price while Amex is more around 3-4%.

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Postby JL70 » Mon Dec 06, 2010 10:35 am

And they hold to the money for longer too. So financially, not convenient for small bussineses and/or low profit margin stores like wholesale.


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Mogul of Pineapples
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Postby Mogul of Pineapples » Mon Dec 06, 2010 4:46 pm

Ironically, in a way having American Express not accepted everywhere may not always be a bad thing in terms of marketing. When it comes to the status cards like the Gold, Platinum, and Centurion having them at Bulgari but not the 99 Cents Store might be a good thing.

I do think be 2020 American Express will be accepted practically everywhere Visa and Mastercard is. Same goes for Discover. I believe this because of all the anti-trust crackdowns going on in the industry and banks can no longer be forced to exclusively issue cards from only one company.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
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Generallisimo
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Postby Generallisimo » Wed Dec 08, 2010 3:15 am

Or by 2020, we'll all pay with our phones, or even better (but probably much later), with digitally-secured biometric identification (eye-scan and fingerprint) making it almost impossible to make bogus charges.

Mogul of Pineapples wrote:Ironically, in a way having American Express not accepted everywhere may not always be a bad thing in terms of marketing. When it comes to the status cards like the Gold, Platinum, and Centurion having them at Bulgari but not the 99 Cents Store might be a good thing.

I do think be 2020 American Express will be accepted practically everywhere Visa and Mastercard is. Same goes for Discover. I believe this because of all the anti-trust crackdowns going on in the industry and banks can no longer be forced to exclusively issue cards from only one company.

DoingHomework
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Postby DoingHomework » Wed Dec 08, 2010 5:44 pm

We'll still be paying by card. You can't give your eyeball or finger to your mistress to take shopping. You could give her your phone but then what if your wife calls?

2020 is only 10 years away. Not much will change by then.

Phones are too easy to clone. While I do think we will see a huge expansion of mobile payments, you'll never be able to charge thousands of dollars on your phone like you can with a card. Neither the technology nor the mobile operators that would need to do the billing are up to that task. Do you think Verizon wants to stand behind a $5000 charge? Because that's what they would need to do.

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Postby Generallisimo » Wed Dec 08, 2010 11:50 pm

DoingHomework wrote:We'll still be paying by card. You can't give your eyeball or finger to your mistress to take shopping. You could give her your phone but then what if your wife calls?


Oh man, you are right on the money, you really do do your homework! Although I guess this is easily solved by giving the person an appropriate encryption key on their phone which you can transfer with a 'bump' if physically near each other (like that iphone app for exchanging biz cards).

Not sure what you mean by cloning of the phone, any transaction system should be encrypted with at a minimum of 256-bit encryption before it can be considered secure. If a pay-by-phone system was done properly, the software token 'credit card' should only become unencrypted after entering a PIN, so even if you can copy the user's phone, you'll still need to get their PIN. Not necessarily the most secure system, but a hella lot safer than those 'pay-by-touch' cards which can be cloned and are not protected with a PIN.


DoingHomework
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Postby DoingHomework » Fri Dec 10, 2010 10:44 am

Generallisimo wrote:Not sure what you mean by cloning of the phone, any transaction system should be encrypted with at a minimum of 256-bit encryption before it can be considered secure. If a pay-by-phone system was done properly, the software token 'credit card' should only become unencrypted after entering a PIN, so even if you can copy the user's phone, you'll still need to get their PIN. Not necessarily the most secure system, but a hella lot safer than those 'pay-by-touch' cards which can be cloned and are not protected with a PIN.


Yeah, I'm sure the technical challenges can be overcome. But the fact remains that you can go out with your credit card and charge thousands of dollars at any time. Sure you need the credit. But what's behind that is a bank guaranteeing your charge and being responsible for it. They manage the risk because that's what they do. But the bank has to fork over cash to the merchant for what you bought within a couple of days. They do that by using depositors money or borrowed money

But mobile operators are not banks. Even if they legally started being banks, they don't have that expertise. It's one thing to guarantee that $1 you spent on a soda or the $9.99 you paid to some service because those can be held in account until you pay your bill. They don't need loads of cash and a huge credit facility for that.

The beauty of Visa, Mastercard, etc. is the infrastructure behind it including banks and even investors to securitize the debts. That took decades to develop. I agree that mobile payments is headed in that direction but it is a long way off. What is more likely is an app by Visa, Mastercard, or AMEX that lets you pay through an RFID embedded in your phone or using a near-field transmitter. But, while those technologies are available, phones don't have the hardware in them yet.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Wed Dec 15, 2010 10:16 pm

I agree with DoingHomework that it is highly unlikely. I don't know about you guys but with how buggy phones are, how often they freeze up or the battery dies, would you really want to depend on that to make a payment?

What I find interesting about the RFID technology is that it has been around a few years now and adaption be consumers is zilch. Back in '06 and '07 Amex was handing out $5 statement credits for select RFID purchases and that was not enough to encourage use. The public has spoken and we like the action of swiping a card.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred



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