Taking Credit Cards

Accepting American Express Online

Some retailers accept American Express and some don't. There are pros and cons to accepting American Express as an online payment option . . . Here's what you need to know.

American Express. Don't leave home without it, right?

But with more and more shoppers not leaving their homes at all, American Express is becoming one of a handful of popular payment options for online consumers. As an e-commerce business owner, you can't afford to ignore the possibility of accepting American Express online.

The ability to accept American Express has several advantages, especially for certain types of online businesses. One advantage is that like Visa and MasterCard, American Express is a major credit card provider with a reputation for taking its cardholders' online security very seriously.

But since it's American Express, there are some drawbacks for online merchants. The same disadvantages associated with accepting AmEx as an in-store payment option also apply to online purchases and e-commerce business owners need to carefully evaluate the pros and cons before deciding whether or not to start accepting American Express online.

PROs

• Higher sales volumes. If nothing else, it doesn't hurt to include American Express as an option for online payments. Is it as good a deal as Visa or MasterCard? Maybe not - but accepting American Express will increase your sales volume by a marginal amount.
• Online alternative. Like it or not, some people are extremely loyal AmEx cardholders. When you accept American Express, you give those cardholders an online venue for purchasing your products instead of visiting your store or worse yet, buying online from someone else.
• Affluent products. American Express cardholders tend to be slightly more affluent than other credit cardholders. If your business sells luxury products online, it's definitely worth the effort to include American Express in the payment mix.
• B2B. Businesses also demonstrate a consistent preference for American Express over other credit card companies. Like luxury product merchants, companies that sell to other companies online need to accept AmEx payments on their websites.

CONs

• Pricing. From a merchant standpoint, pricing is the big drawback involved with accepting American Express payments. Merchant fees are more expensive than with other credit card providers.
• Discount rates. Specifically, American Express's discount rate is 66 basis points higher than Visa and MasterCard. While the other two companies charge merchants 1.9% on transactions, American Express charges 2.56% for both online and in-store purchases.

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