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How Bad Will It Get for American Express?

bloomberg.com

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Re: How Bad Will It Get for American Express?

#31

Post by branchless »

Sanddancer wrote: post #13
magic_beans wrote: post #8

Earlier quoted context omitted.

I've live in New York and I've literally never been to a single bar or grocery store that accepts American Express. Anyone know why this is?

Amex charges higher fees per-transaction. Because they're a charge card, they make their money off the transaction fees, and not off the interest rates a card accrues. Conversely, this means they have to charge more on the front-end to maintain profitability.

Yep - great to see them in trouble. Most small businesses hate them as they take from their bottom line.

IIRC amex also tried to stop retailers letting customers know just how much they charge per transaction and wouldn't let shops offer different prices to counter-balance Amex greed.

Overall they sound thoroughly nasty and I cheer their demise.

ps whenever I can I use cash at an independent business so they keep the 2-3% instead of some big bank.

Re: How Bad Will It Get for American Express?

#32

Post by thehoff »

cm2012 wrote: post #3

This is typical modern Bloomberg reporting - telling a misleading, emotion driven story from anecdotal data and rumors. "The Amex people, most of whom had MBAs, sometimes found it amusing to deal with Costco veterans who spoke about starting out stocking warehouse shelves. Less endearing was the habit Costco executives had of referring to Amex as a “vendor.” That made the Amex people seethe. After all, they represent…

While I don't entirely agree, this article put me off a little.

The first three paragraphs didn't make sense to me and seemed like you said, anecdotal/rumor.

Same with the part about Chenault at the Museum of Natural History event with Sheryl Sandberg and how "yet his dark slacks were creased, and his shoes gleamed as if they'd just been polished." Reads as if the author has something personal in this. What was he supposed to show up in?

Re: How Bad Will It Get for American Express?

#33

Post by gorena »

magic_beans wrote: post #8
eggoa wrote: post #5

For something as fungible as credit card transactions, it's hard to understand how a "brand" could be truly valuable. (Or is the grocery store cashier secretly really impressed when I produce my Amex Blue?)

I've live in New York and I've literally never been to a single bar or grocery store that accepts American Express. Anyone know why this is?

You've never been to a Whole Foods?

Re: How Bad Will It Get for American Express?

#34

Post by vtlynch »

eggoa wrote: post #5

For something as fungible as credit card transactions, it's hard to understand how a "brand" could be truly valuable. (Or is the grocery store cashier secretly really impressed when I produce my Amex Blue?)

But surely their is value in the brand when it comes to customer perceptions about how good Amex support is or how easy chargebacks are.

I agree that thinking Amex can be a "status" symbol is foolish unless they really up their marketing budget (after all, anyone could become a lifestyle brand if they tried). More importantly, thats not something consumers care about when picking a credit card.

Re: How Bad Will It Get for American Express?

#35

Post by martingordon »

magic_beans wrote: post #8
eggoa wrote: post #5

For something as fungible as credit card transactions, it's hard to understand how a "brand" could be truly valuable. (Or is the grocery store cashier secretly really impressed when I produce my Amex Blue?)

I've live in New York and I've literally never been to a single bar or grocery store that accepts American Express. Anyone know why this is?

Where in New York do you live? Everywhere I go in Manhattan accepts Amex. I've even been to a bar that only accept Cash or Amex ("the Costco of bars").

Re: How Bad Will It Get for American Express?

#36

Post by davidw »

brewdad wrote: post #22
JoshTriplett wrote: post #6

Earlier quoted context omitted.

The Costco Amex vanishing seems like no big deal. However, Costco refusing to take Amex for payment at all introduces far more inconvenience.

Not really. Before AMEX, Costco had an exclusive deal with Discover. That's the definition of inconvenience. This new deal will result in a Costco branded Visa but Costco will be accepting ANY Visa card. For the vast majority of consumers this is much more convenient. FWIW, AMEX has been doing the hard sell trying to get me to switch to a new card. So far, I haven't seen any offers worth my time. It's a shame really.…

Yeah, when we moved back to the states, I signed up with Costco. Only I couldn't pay for it with any of the cards that I had. So I also had to sign up for their Amex card. Quite a bit of paperwork and hassle...

Re: How Bad Will It Get for American Express?

#38

Post by branchless »

zyxley wrote: post #14
magic_beans wrote: post #8

Earlier quoted context omitted.

I've live in New York and I've literally never been to a single bar or grocery store that accepts American Express. Anyone know why this is?

2.5% transaction fees instead of 2%. The average grocery store has a profit margin of 1% to 3%, from what I understand.

It's 3.5% vs 2-3% on most cards.

https://www.nerdwallet.com/blog/credit-cards/retailers-accep...

So they are all taking a good wedge for very little.

Re: How Bad Will It Get for American Express?

#39

Post by branchless »

zyxley wrote: post #25
eggoa wrote: post #5

For something as fungible as credit card transactions, it's hard to understand how a "brand" could be truly valuable. (Or is the grocery store cashier secretly really impressed when I produce my Amex Blue?)

The AmEx brand is—or, at least, originally was —aimed at people who don't care about the cash or discount rewards most other cards offer, and would rather have massages in airports, on-call concierges, personal shoppers, and so on. Just getting the mystical Centurion Card (aka the "Black" Card) requires being personally invited by the company after spending at least $21,000 a month on AmEx cards. They have no credit…

And then other companies worked out you could print black cards and undercut them.

I guess if I want to make a multi-million dollar purchase I'll have to do some extra admin. That aside every other time I purchase from a retailer they and I get to benefit.

Re: How Bad Will It Get for American Express?

#40

Post by treehau5 »

roymurdock wrote: post #26
eggoa wrote: post #5

For something as fungible as credit card transactions, it's hard to understand how a "brand" could be truly valuable. (Or is the grocery store cashier secretly really impressed when I produce my Amex Blue?)

It's about consumers and merchants knowing they can trust the brand of the card to be a) accepted everywhere to reduce the complexity of managing multiple credit card accounts and b) fraud-protected so they know they won't have to pick up the tab for losing/having a card stolen. Having customers view the Visa/Mastercard/Amex "brand" (aka network) in this light is very valuable. Perks such as cash back, no foreign tra…

I will add my own opinion as a mid 20 year old male myself:

My friends and I do not view all cards the same. There are obviously "top tier" versions of each card provider, and those are the ones that are looked at with "Prestige"

Whether or not those are Visa, Mastercard, or Amex makes no difference. But if you have a Amex Black, or the metal Chase card with no limit, it does come with opinions.

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