American Express OptBlue Credit Card Processing

Some love it, some hate it. Some score points with it, some need to settle a score with it. What is it? Answer: American Express

Consumers love their American Express credit cards.  Amex cards are some of the best point cards out there.  Amex cards offer their cardholders a selection of rewards, bonuses on purchase categories, enticing welcome offers, travel benefits, and flexible Amex point conversions into other loyalty programs.  From everyday spending to high spending, Amex cardholders trying to maximize their benefits are ready to shop.

Amex membership rewards shopping, and this is reflected in Amex cardholder’s spending habits:

  • American Express card members are known to spend 3x more than non card members
  • American Express card members are 1.3x more likely than non-members to make unplanned purchases
  • Amex transactions are more than non-Amex transaction values
  • American Express cardholders have higher household income, which equates to higher spending
  • American Express acceptance rate in the United States is on par with Visa and MasterCard

Businesses and retailers often look for ways to meet customer shopping needs and make the transaction process frictionless.  They work with their merchant service providers to offer various payment methods, and in an effort to not cut into their profit margin they try to lower their processing fees.  But are they going about it the right way?

As shoppers, we have all seen the signs on a point-of-sale machine or a note on the online checkout that reads “we don’t take Amex.”  As payments consultants, we often get requests to remove Amex options off a merchant account.  If businesses are looking for more sales, and Amex cardholders are buying, why this disconnect?

Most businesses’ experience and understanding around Amex acceptance is with the Amex ESA (or Amex Direct) agreements. For merchants, that meant acquiring a separate merchant account dedicated to Amex transactions, where settlements, deposits and fees are handled by Amex directly.  To receive an SE (service establishment) number to accept Amex would be a huge undertaking with a lengthy application process.  These agreements and merchant accounts have non-negotiable rates / fees which will range on average between 2.3% to 3.3% on domestic credit cards, depending on if you are a Canadian or US business and when you signed up with an American Express merchant account.

While an estimated 99% of US businesses accept Amex today as part of card brand acceptance, it was not always like this. In Canada, although steadily expanding, Amex acceptance is much lower.  While business owners love Amex for their own business expenses, when it comes to their business sales, they are forfeiting sales due to a long-standing feud with accepting American Express.  If asked why, it comes down to simply that accepting American Express costs too much.

For businesses still holding onto this mentality that accepting Amex means higher rates and fees, as Kevin O’Leary would say, “take it behind the barn and shoot it!”

Merchants can now have their cake and eat it too, or…

Accept Amex and cut fees while consumers spend

In contrast to American Express merchant services, the American Express OptBlue solution offers the option to accept Amex without the high fees and even the score for businesses.   The Amex OptBlue program is not new, American Express released this processing option in 2014, and Cartis Payments has been offering it since the launch of Elavon’s OptBlue program in October 2016. The rollout of Amex OptBlue replaced its predecessor, American Express OnePoint, and the solution was specifically designed for small and midsize businesses (SMB) that have American Express transaction volume under $1 million annually in the US or $500,000 in Canada.

Businesses who exceed the American Express sales volume, or fall under the Amex exclusion list of industries or brands that are OptBlue prohibited, will still need to go through Amex Direct in order to accept American Express transactions. However, Amex is constantly expanding eligibility for its OptBlue program, and adding more franchise brands.   

Original hesitations, Amex reputation and association with high American Express rates prevent many businesses from getting on board with the Amex OptBlue program.   With so many pre-existing misconceptions, it is important to clearly define what being enrolled on Amex OptBlue offers.

Top five Amex OptBlue benefits for Merchants

One deposit – On the OptBlue program, Amex transactions are settled and funded at the same time as other card brands (Visa, MasterCard, Discover, UnionPay, etc…)

Funding – On the OptBlue program, funding is done by the payment processor, OptBlue merchants see quicker access to funds through same day / next day funding.

One merchant account – Being enrolled in OptBlue means you get one consolidated statement which includes Amex transactions with a clear fee breakdown for simple reconciliation and reporting. Better yet, no lengthy separate applications to add Amex acceptance, it is enabled by default.

Reduced Amex rates – While Amex Direct merchants are on a fixed discount rate, merchants enrolled on the OptBlue program through a payment processor benefit from wholesale discount rates. By working with a payments consultant / merchant service provider, merchants can benefit from competitive interchange plus (IC +) Amex OptBlue pricing. Interchange plus pricing allows businesses that fall under certain Amex merchant category codes to take advantage of various interchange category reductions.

One service provider – Unlike Amex Direct merchants who are left to do all the heavy lifting when it comes to customer support and managing their account, Amex OptBlue merchants get personalized service from the merchant provider that handles all their payment processing on one platform.  That means no more being told they can’t be helped, being bounced around, or dealing with call centers.

The financial benefits far exceed these.  Amex is finally scoring some points with businesses through the value it offers them.  Businesses no longer need to restrict who can make purchases and how they can pay; and are attracting more customer sales through free Amex marketing, window decals and the Amex business locator map.  Overall, merchants realize that the OptBlue program simplifies business operations, and accounting workflow.

Amex Redefined

The approach to add value for businesses is just the start in redefining their reputation and the American Express network expansion efforts. It is the constant developments, card brand updates and enhancements to interchange that win over certain merchants that are still hesitant.

There have been real improvements.  In October 2020, Amex OptBlue began supporting USD currency and USD settlements in Canada. This allowed merchant providers to bundle Amex on a single USD merchant account and eliminated the need to have a separate USD Amex Direct account.   The most recent enhancements are of notable importance for many businesses and organizations. In November 2022, Amex introduced new interchange categories, qualified more categories for better rates and eliminated volume tiers. For example, in Canada, businesses that fall into the emerging market category, which includes camps, schools, services, utilities, charities, etc.…saw significant reductions of 24 to 82 basis points (bps) in some cases.

Opt in to OptBlue with Cartis Payments

Knowing your options when it comes to card acceptance, and making the right decisions are integral to businesses.   It is important to work with someone who understands interchange, card brand updates, and payment optimization to fit you into the most beneficial category for optimized processing rates.

For merchants that are with Amex ESA already, Cartis Payments does an analysis of the Amex statement and rates to provide advisory feedback and guide your business toward the right option. Our merchant accounts support both Amex Direct and Amex OptBlue. For businesses who are better off or are required to remain with Amex Direct, we can add their SE number to the merchant account enabling them to accept Amex transaction on their existing POS terminals or payment gateway while Amex processes and funds those transactions. And for those who benefit from making the move to OptBlue, the switchover is handled behind the scenes with no interruption to business or change on the merchant’s part.

American Express can be rewarding for consumers and businesses alike. Amex pushes to support small businesses through their “shop small,” “support small” campaigns. Rewarding Amex cardholders for using their Amex card at small businesses, and supporting businesses by directing consumers their way. Cardholders love the Amex benefits from their Gold Cards, Green Cards, Corporate Cards, Platinum Cards…and with Cartis Payments, businesses will love the benefits of OptBlue.