Understanding American Express Discount Rates

When referring to the percentage merchants pay for accepting credit card transactions, Visa and Mastercard use the phrase “Interchange Rate”. American Express uses the phrase “Discount Rate” when referring to their processing fees, which can be misleading. Instead of giving merchants a discount for particular purchases, they are actually taking a larger percentage of the purchase than most credit card processors. As American Express works as a closed loop system (dispersing their own cards, authorizing and settling payments), they set their fees at high price rates for whatever they can get away with in our current economy.

Amex Discount Rates Vary From Business To Business

As a merchant, your Amex “discount rate” is what you pay per transaction settled with an American Express card; and the rate can vary based on your MCC (merchant category code). The MCC was created federally for tax purposes but is now also used by credit card companies for determining interchange fees/discount rates.

Some businesses (not many), like grocery stores, will have lower discount rates than other businesses because of their MCC. It is possible to qualify for multiple MCC’s. One example would be a restaurant with a sit-down bar. This business would classify as 5812 (Eating Places, Restaurants) as well as 5813 (Drinking Places).

It can be worthwhile for merchants to accept American Express payments since AmEx cards are typically used for larger purchases. If your business accepts American Express, we can help you to lower your overall merchant fees to absorb the effects of Amex discount rates.

You Can Lower Your Merchant Fees With Verisave

At Verisave, we have decades of experience working with retailers, service providers, tech companies, and distributors to significantly lower their merchant account fees. Our auditing experts wade through convoluted merchant account statements to locate areas of overspending and unnecessary or miscellaneous charges, eliminating them completely.

With our years of experience, we have extensive knowledge of the credit card industry. And having worked with all kinds of payment processors, we have accurate information concerning their cost structure. This allows us to work with our clients and the processor to set reasonable fees for both parties. By working with your current processor, lowering your interchange and Amex rates, and eliminating other fees, Verisave saves clients an average of 25% to 35% in monthly merchant fees.

How could your business benefit from thousands of dollars in savings every month?

Receive A Free Analysis With No Risk

At Verisave, we’re so confident in our ability to locate savings for our clients that we offer a free initial analysis to prove ourselves. Send in a recent merchant account statement and we’ll locate any overspending, unreasonable fees, and potential savings. You’ll receive a report within 2-3 business days and could see your savings implemented in a matter of weeks.

Start putting larger portions of your sales back into the company by reducing fees you are spending towards credit card processing.

Leave a Comment