American Express Merchant Services Review

American Express Merchant Services is the division of American Express Company that provides businesses the ability to accept AMEX cards at their point of sale. This service is available to a variety of business types, including retail, e-commerce, and mobile operations.

The company’s services include processing transactions, access to tools for marketing insights, fraud prevention tools, dispute resolution, and data security services.

Payment Processing

American Express is widely recognized for its consumer services such as traveler cheques, charge cards, and credit cards. On the merchant side, American Express enables businesses to accept payments made with American Express cards. Historically, businesses had to set up a separate American Express merchant account, distinct from their Visa, MasterCard, and Discover accounts.

Point of Sale Solutions

American Express offers various point-of-sale (POS) solutions compatible with different hardware and software systems, including traditional POS systems as well as mobile and tablet-based options.

Online Payment Gateway

The company provides a secure online payment gateway that allows businesses to accept payments over the internet. This gateway includes features such as fraud prevention and data encryption to ensure secure transactions.

Fraud Protection and Security Measures

American Express incorporates robust fraud prevention and security measures to protect merchants from unauthorized transactions and potential chargebacks.

Dispute Resolution Services

The company’s dispute resolution services assist merchants in managing contested transactions and recovering funds, offering support in navigating disputes.

Data Analytics and Reporting Tools

American Express Merchant Services provides analytics and reporting tools to help businesses track sales trends, monitor customer behavior, and gather insights for informed decision-making.

Next-Day Payment Option

Merchants can benefit from a next-day payment option, allowing them to receive funds in their bank accounts by the next business day.

Merchant Financing Options

Eligible merchants can access financing options through American Express, including various loan and credit offerings to support business expansion or cover immediate expenses.

Marketing Support

American Express provides marketing support to its merchants, such as free signage and online listings in the Amex Shop Small Map.

Increasing Complaint Volume

American Express has a renowned reputation for delivering exceptional service with its consumer products, which historically extended to its merchant services. However, there has been a noticeable rise in American Express Merchant Services reviews in recent years. Many of these reviews mention fund-holds or chargebacks that were resolved in favor of the consumer by American Express, with some reviewers going as far as labeling the company as a scam. A particularly severe complaint outlined below describes a fund-hold exceeding $160,000 and highlights poor customer service. Additionally, a few complaints have surfaced regarding high processing rates and issues where withheld payments are not automatically refunded to the merchant, even if the merchant refunded the customer (a practice standard across most VISA/MasterCard merchant accounts). If you have your own experience or review of American Express Merchant Services to share, feel free to do so in the comments below.

American Express Merchant Services Customer Support Options

American Express provides phone, chat, and web support for all its clients.

PaymentPop Rating for American Express Merchant Services

Positive Feedback

There are no positive reviews published about American Express Merchant Services on the PaymentPop website.

American Express Merchant Services BBB Rating

The Better Business Bureau does not have a profile dedicated solely to American Express Merchant Services, but it does have one for the company as a whole. As of this review, the BBB is giving American Express no rating, down from an “A+” at the time of our last review. The company was formerly accredited by the BBB since 1948 but no longer shows accreditation.

The BBB is reporting 4,161 complaints filed against American Express in the last 36 months. Only 1,751 of these 4,161 complaints were resolved by the company to the satisfaction of the merchant. The remaining complaints were resolved to the dissatisfaction of the merchant or received no final response.

Qualifying for an American Express Merchant Services Account

To open a merchant services account with American Express, businesses must be equipped to accept American Express for card payments. Furthermore, they must have a minimum of two years in business with an annual processing volume of at least $50,000, out of which $12,000 should be from debit and credit card sales. This eligibility criterion implies that the service is not available for new businesses. Businesses that do not meet these qualifications should consider exploring alternatives in the best merchant accounts for new businesses section to find a better-suited solution for their specific needs.

High Cost, Low Commitment

In this regard, American Express Merchant Services earns favorable ratings for its lack of lengthy service commitments and absence of an early termination fee for account cancellations. However, the processing rate for AMEX transactions, typically ranging between 3% and 5% of the sale amount, impacts the company’s overall rating negatively. Although some businesses may opt for a flat monthly fee, the transaction rate is usually determined by the business’s sales volume and type. For instance, while retailers are charged a swipe rate of 2.89% plus $0.05, restaurants face a rate of 3.5% plus $0.05. Although rates are established upon account activation, they generally do not match the competitive rates offered by budget-friendly merchant accounts.

American Express vs. Visa/MasterCard

American Express asserts that its processing rate is comparable to that of VISA and MasterCard when considering various additional fees charged by VISA/MasterCard, such as monthly fees, Dues & Assessments fees, Interchange fees, and PCI Compliance fees. Under its predominant pricing plan, American Express does not impose additional monthly fees, annual fees, or monthly minimum fees. Business owners are advised to seek clarity on rates, fees, and factors influencing costs when initiating an account setup.

American Express Authorization Fee

Since most clients typically sign up for merchant services through a VISA and MasterCard dealer and then subsequently integrate their American Express Merchant Account to process through the same hardware and gateways, they may observe additional fees on their VISA/MasterCard statements for accepting AMEX cards. Referred to as an “American Express Authorization Fee,” this fee is levied not by American Express but by the VISA/MasterCard merchant account provider as a convenience charge for routing the transaction to American Express. Once again, readers are encouraged to seek information about this fee as it is often negotiable. Clients may also encounter varying pricing from providers participating in American Express’s “OptBlue” program. An updated version of American Express’ Merchant Services Agreement, effective April 2019, can be reviewed here.

In 2018, the Supreme Court ruled on Ohio v. American Express Co, affirming that the company’s “steering policies” did not violate federal antitrust laws. These policies, outlined in the merchant services contract, prohibited businesses from suggesting alternate credit cards with lower processing fees than those of American Express. The court’s decision resulted in clients potentially incurring higher rates, favoring American Express with a 5-4 vote. In 2020, a lawsuit was filed against American Express for allegedly misrepresenting billing rights on statements. The lawsuit was dismissed without prejudice.

Direct, In-House Management

Unlike VISA and MasterCard, which outsource their sales and account management to third-party banks and sales organizations, American Express Merchant Services primarily manages all of its accounts directly. A major difference in this business strategy is that American Express typically does not allow third parties to set processing rates and fees for its merchant accounts, whereas VISA and MasterCard’s processing rates can be greatly influenced by both the sales organization and, in many cases, the agent setting up the account.

American Express OptBlue

American Express merchant accounts can be obtained directly through American Express or, in some cases, through a VISA and MasterCard merchant account provider. Generally speaking, it is best to deal with American Express directly for account setup so as to obtain the best rates and fees. However, American Express recently launched a new program called “OptBlue,” which allows certain third-party providers to set their own American Express pricing and costs for the service alongside Visa and MasterCard payments. This marks the first time that American Express’s rates can be altered by third-party providers and bundled with Visa/MasterCard processing, which could result in increased costs or savings for clients on a case-by-case basis.

No Deceptive Quotes

American Express Merchant Services uses no deceptive marketing or sales tactics that are apparent to us. However, it is possible that a third-party reseller could inflate the company’s rates under the OptBlue program. If you suspect that this is happening to you, we recommend seeking a third-party statement audit to eliminate hidden fees.

American Express Merchant Services provides a detailed suite of services that support a variety of business types in accepting AMEX cards. This includes tools for processing transactions, marketing insights, fraud prevention, dispute resolution, and data security services. The division offers next-day payments, merchant financing options, and marketing support, helping businesses improve their cash flow and attract more customers. However, it’s crucial for businesses to understand the specific terms associated with accepting American Express as they differ from other card networks, requiring a separate merchant account setup. This can influence decision-making, especially for small businesses considering cost efficiency and service needs.

Critically, American Express maintains a historical reputation for quality and reliability, yet recent reviews suggest growing concerns among merchants, particularly around issues like chargebacks and fund-holds. While American Express offers robust fraud protection and dispute resolution services, these features have also led to complications for some merchants. Additionally, while the company’s direct handling of merchant services mitigates issues related to third-party management, the introduction of the OptBlue program allows third-party pricing adjustments, which could impact overall cost-effectiveness. Prospective clients are advised to compare these features and potential costs with other top-rated merchant service providers to ensure the best fit for their processing needs.