AMEX charges to Businesses

Zopa_Trooper

Does anybody know how much American Express charge businesses in the UK? The reason I ask is that I have a reasonably big purchase to make (£6,000) which if I do on my AMEX card I'll get £30 cashback. So I'm wondering how much the business will get charged for this because if its more (has to be, doesn't it?) then there might be some wiggle room to do a bit of bartering.
Personally I'd accept a £30 discount as I wouldn't have to wait for the annual payment of cashback but if the business gets charged £60 for example, why not split the difference? Everybody wins, well, except AMEX of course.

CliveOfIndia

Charges are calculated as a percentage of the transaction value, not a fixed fee.  It's impossible to say how much a particular business will get charged, since fees are usually negotiated (certainly for large businesses) between the card network and the business.

I'm not sure if it's still the case, but historically Amex used to charge more than Visa & Mastercard - which is why it was quite common for some businesses to not accept Amex.

Oh, and it's illegal for any business to charge a different price purely based on the payment method.  It used to be the case that some businesses (especially car dealers) would pass on their fees to the customer, or offer a discount for cash (or charge more for a card payment).  That practice has been illegal for some time now.

Of course you can always haggle for anything to try and get a better price - but they can't penalise you for paying by card.  They can flatly refuse to accept cards if they want, but they can't price the goods differently depending on whether you pay by card or not.

DullGreyGuy

Zopa_Trooper said:

Does anybody know how much American Express charge businesses in the UK? The reason I ask is that I have a reasonably big purchase to make (£6,000) which if I do on my AMEX card I'll get £30 cashback. So I'm wondering how much the business will get charged for this because if its more (has to be, doesn't it?) then there might be some wiggle room to do a bit of bartering.
Personally I'd accept a £30 discount as I wouldn't have to wait for the annual payment of cashback but if the business gets charged £60 for example, why not split the difference? Everybody wins, well, except AMEX of course.

Depends on the size of the merchant, a small place may have something like Dojo that charge 1.5% but they dont tend to sell £6,000 items. Large merchants can be charged under 0.5%. How else are you going to pay? Dojo charge 1.3% on Mastercard/Visa so for that tiny merchant its only 0.2% difference. Cash handling has a cost too if you were thinking of that.

Also depends on the nature of the business... someone somewhere will care about the fees but not necessarily the sales person or even the store manager who's performance may well be measured in gross sales or gross margin ignoring transaction fees.

WillPS

The interchange fee cap applies to personal Amex cards with a partner brand, the currently available examples are: BA, Nectar, Vitality, Harrods, Marriott. For those payment cards, the maximum Amex is allowed to collect is 0.3% - same as any personal Visa or Mastercard.

Amex's other cards - Personal Gold, Platinum, Cashback, Rewards etc and all business cards -are not subject to the interchange fee cap.

The fees paid by the merchant to their merchant acquiring bank may or may not reflect this differential - I suspect in most cases the merchant acquiring bank charges a fixed % for all Amexs which will blend all possible charges weighted against their likelihood of being used.