Understanding Merchant Amex Options: Direct vs. OptBlue

It’s no secret that American Express tends to do its own separate thing regarding credit card processing. Due to them doing their own thing, Amex has been an outsider in the industry for many years. Among the most well-known card brands such as Visa, MasterCard, and Discover, they are unique in the way they approach business. 

For example, looking at the United States, American Express is accepted by an estimated nine million locations, which seems like a lot, until you look at its main competitors Mastercard and Visa. They are both accepted at more than ten million places.

Furthermore, the main reason for the merchant’s hesitance on accepting Amex is that their rates are higher than those in other brands. To paint a picture, the average fee for Visa and MasterCard (two of Amex’s most significant competitors) is only 2.17%, while American Express has a transaction fee of 2.33%.

Despite this vast difference, American Express has recently been trying to increase its presence in the market by increasing the number of locations where Amex is accepted. As a result, they have opted to become more accessible and work with a new group of qualified merchants, introducing the Amex OptBlue and the Amex Direct, which we will break down in this article.

What is AMEX OptBlue?

Amex OptBlue is a processing service that Amex released back in 2014. Before OptBlue, American Express cards were only through specific and separate merchant accounts from other care providers. This merchant account was managed by Amex, which would result in more intermediaries and higher rates for the businesses that used Amex.

Similar to how their competition works, American Express used OptBlue to change the way they did business. Amex transactions opened its processing service to other accounts other than the ones managed by Amex. This change was made due to multiple reasons that are listed below:

  • Faster Payment

Now, all of the deposits, whether from Amex, Discover, MasterCard, or Visa, have the same payment schedule, increasing the rate at which the payment is made.

  • Greater Reconciliation

Since there is only one deposit provider, the different businesses’ systems have become unified, making it easier to work with. 

  • Fewer Billing Statements

All of the Amex deposits made with OptBlue can be listed alongside other well-known card brands. This will come in handy, especially when all credit statements come together at the end of the month. 

  • Better and Shared Support

Thanks to the integrated system, your account provider will now be capable of providing you with answers and assistance with any questions or doubts you might have. This will also be regardless of the card’s provider, whether Amex, Visa, or others. 

  • Improved Rates

Now, Amex cards’ rate structure is not decided by the sole discretion of American Express. Account providers now have access and can control the rate structure as they see fit. They have a more extensive array of possibilities and a lot more opportunities to participate in negotiation than they had when the American Express flat-rate plan was in place.

If you are in charge of a business and want to organize your credit card processing while saving some money efficiently, these new changes will do wonders for you. This option makes card processing a more straightforward process and makes it way more appealing to accept American Express cards from a financial standpoint. 

Moreover, Amex these aren’t all of the merchant account profits Amex has to offer. There still is one card that has a lot of advantages as well: Amex Direct.

How Can You Negotiate OptBlue?

After learning all of the things this new option has to offer, you may have already realized that this is the card for you, and you are starting to wonder what you must do to get one. Well, you are in luck because negotiating OptBlue pricing is not very different from negotiating the price for any of the other card brands you might have used in the past or even using at the moment. 

To begin with, the biggest thing you have to keep in mind is to make sure that you already have interchange-plus pricing for all of your cards. That way, if a particular processing company insists they can only offer a tiered pricing system for American Express, then the best thing you can do is to go somewhere else. Doing this would be similar, if not even higher, than going to Amex Direct. 

Moving on, once you have already secured the interchange-plus pricing for all of your cards, it is essential to get the same markup for all four card brands. A significant number of processing companies are likely going to offer a markup a lot higher for Amex transactions, which to them is just another profitable category. 

What is Amex Direct?

Contrary to OptBlue, the merchants under Amex have to offer the same rates as before while their competitors offer the new rates. This is because, as an exclusive account, they are subjected to the old rules. Sadly, this results in higher processor rates. 

Amex Direct is a merchant account created especially for the big businesses processing over $1 million at a minimum every year in Amex transactions. This option follows American Express’s old flat-rate merchant account structure before the debut of the updated OptBlue service. Plus, because Amex is not integrated with other card provider systems, it can impose this rule, especially if they desire to accept Amex cards at their locations. 

To add on, merchants with an exclusive merchant account have to continue operating under Amex’s standard rates, which are severely harsher than other card processing providers. This is typically significantly greater than the other card providers’ processor rates. 

Furthermore, businesses part of Amex Direct have third-party systems to make their lives easier and more comfortable! Thanks to their system, businesses part of Amex Direct can reconcile their deposits.

Conclusion

Navigating through the world of processors, rates and rules is a tiresome and challenging job. Still, by looking at the main qualities of either the Amex OptBlue or Amex Direct, you should be able to make the best possible decision for you and your business. Still, as long as you have the right provider under your belt and the new OptBlue platform, accepting Amex cards should be more accessible even for businesses mandated to have an Amex Direct account.

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