Friday, January 26, 2018

The confusing acceptance of American Express Cards in the UK.

Shops that don’t accept American Express cards in the UK.

Although the number of retailers accepting American Express cards has increased, there is a confusing landscape. For example:

  • Scotrail ticket machines at railway stations do not accept the card, but London Transport do - you can register your card as an Oyster card.
  • Greggs do not accept American Express but Pret a Manger does.
  • Paperchase does not accept American Express in store, but apparently does online.
  • Lidl do not accept American Express but Aldi does.


There is also a confusing difference between very small, medium and large retailers in their acceptance of the card.

Any small retailer who uses a payment provider like izettle or Paypal can automatically accept American Express cards, usually at the same commission rates as for other cards. Apple Pay can also be used to pay via American Express, but Android Pay can’t, in the UK at least although it works in the US.

Large retailers like Marks and Spencer and Boots want to accept as many payment methods as possible and they have a large volume of transactions which translates to lower commission rates. They also view the commission charges as part of doing business and will budget a percentage of their sales to cover this and cash handling costs.

Online, most large retailers with bespoke ordering systems will have an American Express merchant account. Any online retailer that accepts Paypal can also take the card, which means that almost all of EBay is OK for American Express. Online retailers who don’t are usually those using payment processors like Worldpay who acquire merchant accounts for their customers, but do not automatically hande American Express.

Where the problems arise in the high street is medium sized retailers with bank acquired merchant accounts. They have to apply for a seperate American Express merchant account. This is a straightforward process if they already have a Visa and Mastercard account, but even if they get one setting up their point of sale terminals can be too complicated. Not only does the merchant ID have to be set up on every terminal, but the contactless system is somewhat different. If their terminal is provided by their bank there may not be sufficient technical support to do this.

Retailers who don’t accept American Express usually cite the higher commission fees as the reason. However, the differences are small and should really be covered by the cost of doing business. In the case of the payment providers like Paypal the commission rate for American Express is usually the same as for other cards anyway. One of the real reasons retailers don’t like American Express is the chargeback regime, which is much more in favour of the card holder than Visa or Mastercard.

By not accepting all cards retailers put off higher net worth individuals who have a tendency to charge most things to their card. American Express also has a high percentage of the corporate card market which means that business people want to charge their business expenses to the card.

We now have a strange situation where smaller retailers and larger retailers and almost every online retailer accept American Express, but a lot of medium sized retailers don’t.

That said, the reasons for having an American Express card are still pretty sound:
  • No chance of getting into debt as the account has to be paid in full each month.
  • No real credit involved, which is why some religions don’t like credit cards.
  • Very strong protection against fraud.
  • Easier to get refunds or chargebacks on goods and services than with a credit or debit card.
  • Good online system and mobile app for identifying spending by different card holders on the same account or separating out business expenses.
  • Ability to register card as an Oyster card then print receipts later for business expenses.
  • Good budgeting tools and mobile app spending alarms.


If you want to apply for an American Express card click here.


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