Why So Many Retailers Don’t Accept American Express

Admit it, you've always wondered why your Amex isn't always accepted, but your Visa or Mastercard is.

For decades, many of you American Express card members have been denied the ability to use your Amex card in certain stores. How annoying! Why can’t every store accept American Express cards?

The answer is simple: stores want more money in their pockets.

American Express charges stores, or merchants, higher fees than other credit card networks like Visa, Mastercard, and Discover.

When you buy items with your Amex card instead of another credit card, your favorite store will be charged a higher fee. This makes retailers like Costco, independently owned boutiques, and many mom-and-pop stores shy away from accepting your Amex card. The fees charged to stores depend on the type of card processing system the store uses, how many transactions it has, and even the type of store it is. Find out the credit cards you should never open.

According to Nerdwallet, in 2017 American Express charged merchants almost twice the amount in swipe fees than Visa, Mastercard, and Discover. Amex charges between 2.5 and 3.5 percent, while its competitors charge anywhere between 1.5 and 2.5 percent. However, that’s soon changing. According to the Financial Times, American Express said in an investor presentation that they’re “planning to cut its merchant fees by about 2.37 percent globally,” the lowest its been in two decades.

Typically, banks that issue credit cards can make money in ways besides these credit card fees, like charging interest on your credit card balance for example. But, many Amex holders use an Amex charge card, not a credit card, meaning they pay off their bill every month and don’t incur interest on the balance. Because of this, American Express depends on these merchant fees.

The most recent Nilson Report, a major credit card industry resource, found that 10.6 million merchants across the United States accepted American Express at the end of 2019, according to a report done by CNBC. These findings show that 99% percent of merchants that accept credit cards in the U.S. will accept American Express, so the days of worrying about whether or not you can use your Amex to pay are nearly over.

Essentially, it costs stores some of its profit every time you swipe your credit card. So use cash instead when you can and check out the 10 times you should never even use your credit card.