A Complete Guide to the American Express OptBlue Program

Many merchants can’t accept American Express cards because of its approval complexity and high rates. This left many merchants disappointing consumers that prefer to pay with Amex for the rewards. Enter American Express OptBlue, the more affordable way for even small businesses to accept Amex.

Applying for the Amex OptBlue program is simple, but there are certain nuances you should know. As with any credit card payment processing agreement – you must know what you’re getting into so you make the most of your profits and the ways you manage your business.

What is the Amex OptBlue Program?

The Amex OptBlue program is essentially a more affordable Amex processing program. Businesses that could otherwise not afford the Amex processing fees may now be able to afford it and/or qualify. The OptBlue program gives merchant acquirers (the banks offering the credit cards) wholesale rates. This makes it more affordable for the payment processors to pass along their rates to you – the merchant.

While merchants won’t pay wholesale rates to the merchant acquirer, as the acquirer must tack on their own markup so they can make money, the overall rates are more affordable. This works in much the same way as Visa and MasterCard. You pay fees on top of what the wholesaler charges in exchange for the service to accept credit cards.

Which Businesses are Eligible for American Express OptBlue?

In order to be eligible for American Express OptBlue, you must own a small business. In addition, your small business must not have American Express sales of more than $1 million per year. This isn’t your total sales, but just the American Express sales. Of course, like any credit card agreement, there are restrictions and rules, but overall, you must meet the sales requirements to qualify.

How OptBlue Pricing Works

American Express has an easy and understandable pricing structure. First, unlike many other card networks, they charge one processing rate whether it’s a card present or card-not-present transaction. So if you take an over-the-phone order, you still pay the same rate as you would if the customer stood in front of you in the store and ran the card himself.

Amex OptBlue Pricing is a percentage plus a flat rate. Each merchant pays something different as it depends on your merchant category code and the size of the sale. Your merchant category code is something Amex determines when you apply to accept Amex at your business. The MCC is based on what your store sells and its risk level for chargebacks and fraudulent activity.

For example, here are a few rates:

  • Retail merchants with a sale of less than $75 pays 1.60% plus $0.10
  • Service merchants with a sale less than $400 pays 1.60% plus $0.10
  • Restaurant merchants with a sale less than $25 pays 1.85% plus $0.10
  • Mail order merchants with a sale less than $150 pays 1.70% plus $0.10

The riskier your business or the higher the transaction, the more risk Amex takes. They charge higher rates for these transactions than they do the ‘less risky’ transactions. That’s not all, though.

American Express also charges:

  • Network fee of 0.15% for any charge
  • An international transaction fee of 0.40%
  • Manually keyed in traction fee of 0.30%

These are just the charges Amex charges. You still must consider the payment processor’s markups. This can be confusing sometimes, depending on the payment structure they use. For example, if they use a tiered pricing model, it can get confusing.

First, most payment processors aren’t as transparent as you’d like when determining your tiers. You may not know until you receive your bill what tier each transaction falls under, which could mean much higher prices than you expected.

At Host Merchant Services, we always use interchange-plus pricing. It’s much more transparent and you can predict your costs. With interchange-plus pricing, you pay the regular American Express rates plus a predetermined percentage (plus a flat rate in some cases). For example, you may pay the Amex rates plus 2.0% + $0.10.

Merchant Types and Categories

Like any credit card transaction, the rates you pay depend on your merchant type and category.

American Express has about 130 merchant categories. A few of the most common include:

In those merchant categories, though, are individual categories for each store. The merchant category code is what drives your interchange rate. The riskier your business is, based on your MCC, the more the interchange rate costs. Each credit card processor charges its own markup based on your MCC, so shop around to find the one that fits your budget the best.

What Really Affects Your American Express OptBlue Pricing?

You’ll pay the same wholesale rates for American Express OptBlue pricing no matter which payment processor you choose. It’s the payment processor’s markup that makes a difference in what you pay and is where you should focus.

American Express made the pricing more affordable, making it easier for more merchants to accept American Express, but only if they choose the right payment processor. You will really only save money if you find a merchant processor that doesn’t have a high markup.

Knowing the base costs is the first consideration. Before you shop around, memorize what American Express charges. This gives you a good baseline when determining if a payment process is price gouging. The payment processor has the final say and could potentially charge higher than necessary prices if you aren’t careful.

Accepting Amex OptBlue can be great for your business, as long as you watch your bottom line. Don’t let excessive fees eat away at your profits just so you can accept American Express at your business. Host Merchant Services offers the best rates for OptBlue and you’ll increase your bottom line while ensuring the happiness of your customers that prefer American Express.

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