Amex is a bully, is inconsiderate of their real customers (the merchants who accept their card), and, ultimately, more expensive for consumers than using other credit cards.
Two recent news items have left American Express reeling.
The first (and this is huge) is that, effective next year, Costco, the giant warehouse retailer, will stop accepting Amex from their members. Amex has been the only card Costco accepted for years, and losing their business means that American Express will lose out on as as much of 8% of their annual revenue.
The stock market spoke immediately knocking 7% off of American Express’ stock price and lowering the companies value by billions of dollars.
The chairman of American Express has said, rather optimistically, that it will take them at least two years to completely recover.
The second punch is a little less dramatic, but will mean a lot to small businesses that take the card.
For years Amex has attempted to force merchants to not be allowed to recommend that customers use a different card (Mastercard/Visa/Discover) if they wanted to continue to accept Amex. This, in spite of the fact that use of a different card would lower the merchant’s processing fees.
Finally, a federal judge, in an antitrust suit, has ruled that it is illegal for Amex to hold this over merchants. Judge Nicholas Garaufis has ruled against Amex (and for small business and consumers).
Look for lots of other merchants to now follow Costco’s lead.
We will certainly give it some thought.