Reducing your American Express Processing Fee - By Avi Jorisch

American Express has rolled out a new program in the last few months which should help many merchants reduce the fees they incur for Amex acceptance. Specifically geared towards small businesses, merchants who have been reluctant to accept Amex until now because of the historically high rates may now wish to reconsider that decision.

The new program, known as OptBlue, allows the merchant processor to set the final processing rates, similar to the way Visa, Mastercard and Discover operate. For those who have read previous postings on merchant processing rates, Amex has now established their own wholesale/interchange, above which the processor can set the processing component.

In plain English, as is the case with the other card associations, the final rate a merchant is charged is determined by a combination of the wholesale rate and assessment fees which are fixed, plus the processor mark up which are variable.

But unlike VS/MC/DS, the Amex “interchange” rate is determined by a merchant’s industry and the actual size of the ticket being processed. For the average merchant, a sale under $150 engenders the lowest interchange rate; for sales between $150.01 and $3,000 a higher rate is incurred; and for sales above $3,000 the highest interchange rate. To be clear, the actual rate and tier varies by industry. In addition to the wholesale rate, there are two other fees merchants may wish to be aware of. First, Amex will also charge an additional network fee – VS/MC/DS call this an assessment fee. In addition, if a card is not present and/or issued internationally, there may be additional costs.

But not all businesses are eligible for OptBlue. Only those merchants who process less than $1,000,000 in annual Amex processing are accepted into the program.  Additionally, because the program is just being rolled out, not every merchant processor can actually offer the program. If your merchant provider does not currently offer the program, depending on the amount of Amex you accept annually you may wish to consult with a processor that does.