Associated Press
Some small businesses have received bonus payments to start accepting American Express.
- AnnaMaria Andriotis writes in the Wall Street Journal about a years-long effort by American Express to get holdout merchants to accept its credit cards.
- AmEx sales representatives are authorized to pay new merchants up to $20,000, according to documents reviewed by the Journal.
- Small businesses are a particular focus for the program, especially "holdouts" who have sought to avoid the company's higher fees.
- The initiative comes after investor pressure for AmEx to catch up with its competitors, Visa and Mastercard.
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Roughly 1.3 million more businesses accepted Visa and Mastercard than American Express in 2018, and Wall Street Journal reporter AnnaMaria Andriotis writes about the steps that the upscale credit card company is taking to close the gap.
Facing investor pressure to close the gap, American Express has been offering merchants incentives up to $450,000 to begin accepting its credit cards.
Company documents reviewed by the Journal show that AmEx sales reps are authorized to pay sign-up bonuses of $20,000, while regional vice presidents can authorize as much as $100,000.
The journal spoke with several small business owners who received $7,500 and $15,000 to begin using AmEx's payment system. Each had long accepted Visa and Mastercard, but balked at AmEx's higher fees. Most cards charge merchants a 2% fee, while AmEx charges 3%.
AmEx is increasingly considering other factors beyond a merchant's annual charge volume, like its proximity to other businesses that use AmEx cards. This could benefit more small businesses that serve a lot of corporate employees.
Coupled with other incentives, the bonus payments could bring the cost of accepting AmEx cards closer in line with Visa and Mastercard. That means small businesses can offer their customers a payment option that comes with AmEx's well-regarded buyer protections and reward programs.
As enticing as these bonus payments may sound, they only represent a small fraction of the new business AmEx has added to its network since 2017. Roughly 3 million merchants have signed up for the company's OptBlue program, while just 133 received bonuses, the company told the Journal.
And if your business uses a platform like Square or PayPal, credit card processing fees are typically rolled into the transaction costs charged by that service.
Business Insider has reached out to American Express for comments on the incentives.