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Originally Posted by passthru
It's my understanding that the main reason AMEX is accepted in fewer places than MC and Visa is the fee associated with transactions. Last I heard, it was 50 cents for MC and Visa but 1 dollar for AMEX. Small businesses especially don't like this, so they just don't accept it. Knowing they have a higher fee annoys me too.
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It is not that big a difference usually. My family has a small business that accepts credit cards. Through a trade association, all of our plastic transactions are handled by a bank hundreds of miles away. The basic rate is 2.92% plus 19 cents per transaction.
Discover and AmEx are 3.25%, so a $100 transaction costs about 33 cents more on Disco or AmEx. But not all processors handle Disco and AmEx--then you have to set up another whole business relationship directly with those cards. AmEx also has a reputation for always siding with their cardholder in any dispute--even when the cardholder is clearly abusing the system. The processors also like to "nickel and dime" the merchants--especially small businesses.
For example, phone and mail orders are at a higher rate because the card is not present. If the scanner can't read your card and the number must be entered manually--that is at a higher rate too. Want a paper instead of email statement--another five dollars.
Some processors--especially small local banks--charge based on average ticket size. So if you have a lot of small transactions, you pay a higher rate. But you pay it not only on the small ones, but the large tickets as well.
That's why small businesses hate to see the plastic come out of your wallet for a $3.00 sale.
Lindy