If you’re new to traveling abroad, it can feel like a shock when you discover that your American Express card isn’t accepted at certain places. After all, the Amex symbol is displayed proudly on storefronts in the United States and Canada, making it seem like such a shame for such a massive corporation to not be able to make its way into some of the world’s biggest markets. Luckily for you, there are a lot of reasons why American Express cards aren’t accepted everywhere, and some of them are more valid than others.
The first thing to understand is that American Express is not accepted everywhere because they have made it so. It used to be that American Express was considered a premium credit card that was issued to those with the biggest incomes and best net worth, but this idea has changed a lot over time. In recent years, banks have been selling American Express credit cards to just about anyone who can pay their monthly bills on time, which has greatly increased their consumer base.
However, it’s also made them less desirable to certain merchants. As American Express has acquired more and more customers, they’ve also become less desirable to foreign merchants who want to sell in the United States but can’t afford Amex’s high fees. Sometimes banks will even refuse to do business with particular companies that only accept Visa, which makes it very difficult for an Amex cardholder to complete that transaction.
One of the reasons American Express credit cards are not accepted everywhere is because they’re simply not as widely used outside of America, and even if they are, merchants have less incentive to accept them. This is especially true in Europe, where many countries use a chip-and-pin system for accepting payment rather than the swipe method.
This is a result of the Europay, MasterCard and Visa (EMV) being widely adopted in most European countries. While this method isn’t foolproof, it makes it much harder for criminals to create fake credit cards using stolen information or swiping a card with its details encoded onto a magnetic strip several times. The downside to these systems is that many American Express cards cannot be processed in this way. However, these problems are mostly fixed with the cardholder’s signature.
Some merchants believe that American Express credit cards are not accepted everywhere because they charge higher fees than other companies. This is true for most merchants outside of North America, where Amex tends to charge between 3-4% in foreign transaction fees for each transacted dollar. Depending on the country in question, these fees can add up quickly.
For example, a British cardholder may only be paying £5 for a £100 purchase at first, but once 3-4% is added on by American Express and then another 1-3% from Visa or MasterCard, that purchase suddenly costs over £6. Merchants hate these fees because it means they’re not only losing money on the sale itself, but also to credit card companies as well. When you consider that some merchants will charge a higher price to those who use American Express anyway, it’s easy to see why this is such a big issue.
