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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?

#41

Post by nlawalker »

zyxley wrote: post #28
nlawalker wrote: post #17

Earlier quoted context omitted.

Yeah, this struck me as odd: > Who cares what card you have if you’re paying for your expensive meal through your smartphone’s digital wallet? Digital payments didn't kill Amex-as-a-status-symbol, the productization and growing availability of credit cards of all brands did. A status symbol brand doesn't send unsolicited junk mail asking for people to sign up for its product.

It seems to me like the company is caught between a rock and a hard place: the only way to make the card popularly accepted enough that the high-end "status" cardholders can use it anywhere they like is to dilute the brand by convincing as many people as possible to use it.

That's well-stated.

I wonder why they couldn't just use a sliding fee - take a bigger fee only for larger transactions and secure agreements with retailers not to ask customers to use lower-fee cards when available (as opposed to trying to enforce it by law, which the article talks about), with the promise that accepting Amex will actually bring in these bigger spenders.

Re: How Bad Will It Get for American Express?

#42

Post by brewdad »

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?

If you live in NYC, you must be actively trying to avoid places that accept AMEX. It's accepted practically everywhere in Manhattan at least.

If you live elsewhere in New York State then, yeah, AMEX charges higher fees to merchants so many smaller ones don't want to deal with them.

Re: How Bad Will It Get for American Express?

#43

Post by mahyarm »

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.

Thing is they don't have to. Visa and co often have lower transaction fees for places like grocery stores exactly for that reason. Amex can adopt the same behavior.

Re: How Bad Will It Get for American Express?

#44

Post by [deleted] »

vtlynch wrote: post #34
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.

[deleted]

Re: How Bad Will It Get for American Express?

#46

Post by josefresco »

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…

I don't understand the criticism. The "personal" level at which this story was told, is an asset to the reporting. Many long form pieces follow this same formula; mixing personal anecdotes from subjects within the story, with factual "outside" sources of information to create a richer story.

Re: How Bad Will It Get for American Express?

#47

Post by joezydeco »

thehoff wrote: post #32
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 su…

I got the impression the author was trying to reinforce the image of Amex being a stodgy Wall Street company that is increasingly out of touch with technology and culture.

Re: How Bad Will It Get for American Express?

#48

Post by roymurdock »

treehau5 wrote: post #40
roymurdock wrote: post #26

Earlier quoted context omitted.

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.

At the end of the day you're right in that a card sometimes functions status symbol, just a less visible one than say a car. But its strength is weakening, and status can't compete with network coverage and fraud protection functionality. Can't wait for the day when we can do away with physical cards altogether.

Re: How Bad Will It Get for American Express?

#49

Post by [deleted] »

thieving_magpie wrote: post #30
crisopolis wrote: post #15

Article references Costco getting bummed that their customers could use VISA in plenty of places and that's correct. However, I'm an AMEX cardholder and I've yet to run into a place who doesn't accept AMEX. However, Costco is right AMEX is just a vendor and if they can find cheaper or better vendor with benefits then more power to them.

Really? I only have an AMEX card and unless it's a chain store it's almost never accepted. I often get lectures from small business owners about the higher rates charged by AMEX and why they can't accept it.

[deleted]
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