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Amex Offers Big Cash Incentives To Businesses To Boost Acceptance

American Express, which has long lagged behind rivals like Visa and Mastercard in terms of business acceptance, has been aggressively pushing to close the gap, offering some businesses thousands of dollars in sign-up fees as well as other incentives, according to a report by The Wall Street Journal.

Some payments even approach the half-a-million-dollar range, and can start from under $10,000. Visa and Mastercard are accepted in about 1.3 million more locations in the U.S., and Amex is accepted in about 10.3 million locations.

In 2016, Amex executives said they would work diligently to close the gap, and dollar targets for new merchant sign-ups have steadily increased. The incentives offered include large payments with very few conditions as well as discounted swipe fees, which is one of the reasons many businesses don’t accept Amex: Its fees can be higher than the competition.

Amex Chief Executive Stephen Squeri said the company is going to meet its goal, but it’s been a tough sell. Giving sign-on bonuses without conditions is completely new in the industry, and illustrates how Amex is pushing to close the gap with rivals. The company said it has added upwards of three million businesses in the last few years, the majority of which have come from third-party payment processors using the company’s OptBlue program.

Anré Williams, head of Amex’s global merchant and network services, said some of the bonuses were offered to businesses that had previously refused to accept the payment. “(We) made a business decision to provide targeted sign-on incentives to strategic, priority holdout merchants, which comprise a tiny fraction of a percent of the merchants we acquire in a year,” he said.

One business that held out for 20 years is Exxcel Gymnastics and Climbing. Co-owner Tatiana Kamarskaya said the high swipe fees kept her away from Amex. Then, when the company offered a $15,000 sign-on bonus, no minimum charge requirement and a promise to match competitors’ fees, Kamarskaya accepted.

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