For years, AMEX cards were held in high regard by both merchants and their customers.

And, then merchants began to tell customers that they didn’t accept AMEX cards because “it costs us too much.”  I was never certain that that was the absolute truth because I had merchant friends tell me that the AMEX cards were no more costly to process than any others and sometimes cheaper.  So, I’d guess that the truth was actually that some of the other card purveyors actually paid merchants to process their cards, when AMEX did not.  But that is now changing, as AMEX is starting to provide remuneration to some merchants for accepting their cards.  The company is offering sign-on bonuses to some businesses that don’t take their card in a bid to catch up with rivals Visa and Mastercard (ref WSJ).  The payments range from $10,000 to $450,000.  The incentives are intended to offset technical and marketing costs.  In 2018, Visa and Mastercard were accepted in 1.3 million more U.S. locations than AMEX, but, in 2016, AmEx said it would close the gap by the end of 2019.  And the company says that they’re on track to meet their goal, saying that they have added more than three million business locations since 2017 and that its internal salespeople have given sign-on bonuses to around 133 businesses since 2018.  The company says, “AmEx made a decision to provide targeted sign-on incentives to strategic, priority holdout merchants, which comprise a tiny fraction of a percent of the merchants we acquire in a year.”  It sounds like the company is on a roll – we’ll follow with updates.

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