NEW YORK—American Express is planning to cut its merchant fee more than it has in two decades.
Amex recently announced that the global average of the fees it charges its merchants (known as its discount rate) would decline five or six basis points this year, to about 2.37%, reported PYMNTS.com.
“If it reaches six points, it would be the biggest decline the company has offered since 1998,” noted PYMNTS.com.
Each basis point comes to around 11 cents of earnings per share, Don Fandetti of Wells Fargo Securities told PYMNTS.com.
“With about 1.3 million fewer locations in the U.S. accepting American Express over Visa and Mastercard, this move is engineered by (Amex) chief executive Stephen Squeri to entice merchants to accept his company's card,” said Fandetti. “In fact, Squeri has said he is willing to make ‘conscious trade-offs’ to get more businesses to take Amex.”