Bank issued Amex - interchange change cut

Legacy_user

It looks like (bank issued) Amex maybe on the block for a reduction in the their cut (interchange) much sooner than expected...

Lloyds Avios, Barclaycard cashback and lots of MBNA cards would likely be affected by provisional decision of the FCA.

than_prutt

Would someone please be kind enough to explain this to me in plain English? I read the article and don't really understand what it means!! Thanks in advance..

bigadaj

Interchange fees charged by credit card providers have been controlled by the eu as it was thought there was a problem with competition. This was supposedly to aid customers but what seems to have happened is that existing cashback and similar payments to consumers have been removed or reduced and there is no benefit in terms of price reduction with products.

This was understood to only apply to Visa and MasterCard but this decision may lead to Amex deals being pulled as well, we'll wait and see if this decision is final and what impact it has in what we the remaining decent deals on charge free cards with Amex.

reclusive46

One thing to note though is that it still won't affect Amex cards issued by American Express directly.

bigadaj

reclusive46 wrote: »

One thing to note though is that it still won't affect Amex cards issued by American Express directly.

Though that's not what the link says.

guesswho2000

bigadaj wrote: »

Though that's not what the link says.

No, but the rules don't apply to pure three party schemes, where the card is issued and processed by a single organisation (such as Amex, where the card is issued by Amex).

The proposed three year exception was only for those using the three party network via license (such as an Amex issued by MBNA) - these are treated as four party schemes - this is the bit that has been changed.

System

It's interesting to see Amex itself mentioned.

The interchange setup would complex, for merchants, with some issuers subject to the cap and others not (Amex).

guesswho2000 wrote: »

No, but the rules don't apply to pure three party schemes, where the card is issued and processed by a single organisation (such as Amex, where the card is issued by Amex).

The proposed three year exception was only for those using the three party network via license (such as an Amex issued by MBNA) - these are treated as four party schemes - this is the bit that has been changed.

than_prutt

bigadaj wrote: »

Interchange fees charged by credit card providers have been controlled by the eu as it was thought there was a problem with competition. This was supposedly to aid customers but what seems to have happened is that existing cashback and similar payments to consumers have been removed or reduced and there is no benefit in terms of price reduction with products.

This was understood to only apply to Visa and MasterCard but this decision may lead to Amex deals being pulled as well, we'll wait and see if this decision is final and what impact it has in what we the remaining decent deals on charge free cards with Amex.

Thanks for the reply but please correct me if I'm wrong. So with all this fuss about interchange fees charge, it's actually the consumers who are actually losing out in terms of reduced rewards and all that. Aren't the people sitting at their desks making all these rules geniuses?

book12

The mbna amex/visa dual product is not available, as it's not on there website.

I think other high street banks will still keep it depending on how many fustomers still use it, etc... they could scrap the product or reduce the benefits.