April 10, 2023

Merchant Services

AMEX Merchant Services

Merchant Services

AMEX used to be more expensive to process compared to other card brands, but this is an attempt to make it easier to accept. Amex OptBlue claims to help retailers save on payment processing costs, to boost pricing transparency throughout the payment process, and even to hook retailers up with free marketing materials. Some of the benefits you can expect as a merchant of AMEX and other payment providers include:

  1. More customers and greater sales:

Customers prefer to shop where their payment options of choice are accepted. Very few customers today carry cash and an even greater number will abandon their transactions at checkout if you tell them that you do not accept cards and that they will have to go and withdraw some money at the ATM.  Conversely, you will make your customers extremely happy if you accept their modes of payment and this will have a direct impact on both your customer numbers and sale levels. This is because happy customers are more likely to buy again and recommend your business to others.

  1. Higher value transactions

Studies have shown that customers spend up to 18% more on transactions when they swipe cards as opposed to when they are paying in cash. Experts say that this is mainly because they don't always see exactly how much they are spending, which in turn makes them feel less guilty about making hefty purchases.

  1. Faster processing time

With payment options like cheques, you will typically have to wait up to two working days in order to access your money. In addition, you also run the risk of cheques bouncing and losing money if the customer does not remedy the situation.  With debit or credit cards, however, you will know right away if the customer does not have sufficient funds as the transaction will be declined. This way you can safeguard against fraud and also ensure that you get your money as quickly as possible.  Once you have decided that accepting cards is the way to go, and then you cannot go wrong with AMEX Merchant services.  

AMEX Merchant Services

AMEX Merchant Services allows you, as a business owner to become a merchant i.e. accept American Express Credit Cards. For a long time, AMEX was not a popular payment option with many businesses due to the fact that swipe fees' were quite high compared to other payment options such as VISA and MasterCard.  Over the last few years, however, AMEX cards have caught up in popularity with other payment providers, and this is largely thanks to the introduction of AMEX's Optblue program which makes it possible for business owners with an annual turnover of less than $ 1 million annually to process payments through third parties associated with AMEX. Optblue is a great way for merchants to lower their payment processing fees while at the same time enjoying many other benefits that come with joining the program.

How does Optblue work?

Optblue allows merchants processing transactions of less than $ 1million to accept AMEX cards at a much lower fee by processing payments through merchant account providers such as FirstDataCorp, Vantiv, Jetpay, Elavon and others. If your business grows and starts processing more than $1 million in transactions, you will need to negotiate fees directly with AMEX. There are also a number of small businesses that do not qualify for Optblue, so you will need to talk to AMEX before applying for the program.  Optblue allows for seamless integration with merchant payment systems so that they do not have to overhaul their payment infrastructure, change their merchant account providers or apply for different account statements.  Optblue also allows merchants to bundle AMEX with other payment providers so that payments from different providers are processed together.  With Optblue, AMEX does not control card processing fees but instead provides a wholesale rate to merchant account providers who then set their own rates. This allows a small business to negotiate a rate with their merchant provider and in many cases, receive a more favorable rate than they would if they were dealing directly with AMEX. In addition, since merchant account providers would like to attract as many merchants as possible, they charge extremely favourable processing fees, which ensure that small businesses pay as little as possible.  The introduction of Optblue had a twofold effect on the AMEX ecosystem i.e. allowing cardholders the opportunity to shop at more stores and allowing merchants to attract even more customers.

Optblue rates

Before the introduction of Optblue, fees were charged using a pricing model that considered whether or not the card was present when the transaction occurred. With Optblue however, merchant account providers apply a percentage of the transaction value plus $0.10 per transaction when calculating fees. In total, it is best to speak to a payment expert to learn about AMEX Merchant Services.

What are the differences between Optblue and AMEX Direct?

There are several important differences between Optblue and AMEX Direct:

  1. Before the introduction of Optblue, merchants had to open a separate AMEX-managed account which often had high and non-negotiable rates. Optblue on the other hand offers merchants the opportunity to choose their own merchant account provider and negotiate rates so that they pay fees that are favorable to them.
  3. It now allows all transactions from different payment providers to be listed on one statement since merchants have the option to bulk all their providers.
  5. It allows for faster payment processing since deposits from different payment providers are put on one schedule.
  7. Merchant Account Providers offer greater support and can provide you with details about your account and transactions whenever you ask.

Why should I consider using Optblue?  There are several reasons to consider using Optblue if you are a small business owner:  You are looking for a more favorable and negotiable rate: Even a small percentage rate change can have a significant impact on your profit, especially if you are dealing with a high volume of transactions, are just starting out or have low-profit margins. You should consider Optblue because it allows you to choose your Merchant Account Provider and you can then negotiate with them for a lower and more favorable rate.  You want to streamline your reconciliations: Even if you have automated your payment and reconciliation processes, you still need to keep all the details in one place in order to streamline everything. This means that you do not have to keep following up with multiple parties in order to get the information you need to organize your records.  You want your payments to be processed faster: Before the introduction of Optblue, businesses would have to wait up to 5 days for their funds to be deposited. With Optblue, money is deposited into your business account as early as the next day, which makes it easier to control your cash flows and also do your daily reconciliation.  Single point of contact: Most small businesses choose to work with one Merchant Account Providers. As a result, they will perform all your credit card processing, including all the other cards that customers use to pay you so you do not have to worry about dealing with different parties with regard to your transactions. This means that your payments will be processed faster, your questions answered quicker, and that you will receive direct support without the need to contact AMEX or other payment providers for customer service or other support. Further, your payments will be more secure since you will not be sharing your details across multiple platforms.  You need value-added services: Many merchant account providers also offer value-added services such as secure payment processing, virtual processing, and many others. By choosing to partner with an AMEX-approved provider, you can get access to all these services and more. In addition, your merchant account provider will ensure that all your customer data is kept secure so that you can retain your customers, reach out to them for repeat business and grow your sales volumes.  Risk mitigation: In addition to ensuring that your payments are processed securely and that your customer data is safe, AMEX-approved merchant account providers will advise you on how to mitigate financial risks in order to prevent fraud and ensure that you get the most out of your Optblue program.  

Final Thoughts

Accepting credit and debit card payments is a great way to attract customers to your business, streamline payments and reconciliations and ensure that your small business has enough cash flow to stay in operation. However, processing fees can really eat into your profits, so you will need a payment option that offers you favorable fees. AMEX has made it easier and cheaper for you to process your payments by introducing Optblue, a payment program that allows you to accept AMEX cards without paying the high fees associated with AMEX Direct. By choosing Optblue, you can negotiate for lower and more favorable fees, have all your payments processed in one place, and enjoy many more benefits of using the Optblue program, including AMEX merchant services.¬†