Amex OptBlue: What It Is and How to Lower Your Rates

Amex OptBlue: What It Is and How to Lower Your Rates

It wasn’t always easy for merchants to accept American Express cards. Until recently, it used to be more expensive to process American Express payments than other major card brands. But in 2015, Amex rolled out OptBlue with some big promises for small to mid-size retailers.

Amex OptBlue claims to help retailers save on payment processing costs, to boost pricing transparency throughout the payment process, and even to hook retailers up with free marketing materials.

As a retailer, you never want to turn a customer away because they don’t have the accepted payment method. Accepting every major card network is just good business.

However, in the past, accepting American Express was too expensive for many SMBs. Merchants were paying 3% or more in processing fees, which was a rate that most small business owners couldn’t accept. But OptBlue was a game changer for American Express and Amex is now accepted at 99% of businesses that take credit cards.

Let’s explore the bare bones facts about what Amex OptBlue has to offer merchants, including its benefits, rates, who is eligible, and how to take advantage of OptBlue without falling prey to hollow marketing strategies.

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Why did Amex roll out OptBlue?

American Express is a well-known name among small to mid-size business owners.

Amex founded Small Business Saturday, shining the spotlight on small businesses across the nation. But it used to be way more expensive to accept Amex than other mainstream card brands, such as Discover, Visa, or Mastercard. Amex also used a closed system loop system that processed transactions on a different schedule/bill than other card payments — creating more paperwork for retailers that used it.

American Express transactions were also more expensive for retailers to process than other mainstream card brands. Historically, Amex charged 3% or more for credit card processing. As a result, Amex cards were less widely accepted than their competition. But this has been changing ever since Amex rolled out OptBlue in 2015.

What is American Express OptBlue?

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OptBlue is Amex’s Express merchant account pricing model. It lets small to mid-size retailers accept American Express credit cards alongside transactions from other major credit card companies without paying higher fees. OptBlue offers lower processing fees and a level of pricing transparency that wasn’t previously available from Amex.

American Express’ OptBlue program is for businesses that accept $1 million a year or less in Amex payments. It lets you process payments directly through their credit card company, instead of only allowing credit card processing through American Express. Large businesses can also accept American Express, but if you process over $1 million a year in transactions you have to go through the American Express ESA direct processing program.

OptBlue is similar to Visa and Mastercard’s merchant account programs in that it allows payment processing companies to add their own markup to OptBlue’s base rate. The base rate that’s paid to Amex remains the same, but you’ll pay a different rate on Amex transactions depending on which credit card processing company you use.

What are the advantages of the OptBlue program?

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Amex is throwing their hat in the ring for small to mid-size business market share with OptBlue. Amex now offers many of the same rates and benefits of other large credit card companies. However, it has a few distinct advantages when it comes to merchant services:

  • Next day payment processing: Your money is in your account the next day.
  • Wholesale rates for payment processors: Your payment processing company sets their own rates, instead of requiring you to pay a higher fee directly to Amex.
  • Personal assistance: Amex helps to promote small businesses through its OptBlue program, by offering a small discount for cardmembers at included retailers.
  • Free marketing materials: It comes with the package. Paper and digital signage, placement on the Shop Small Map, floor mats, and more.
  • One statement: The convenience of one bundled statement for all of the credit cards your business accepts.

What are the rates that come with Amex OptBlue?

Amex has taken its merchant services pricing structure to the next level with OptBlue. On average, American Express charges about 1.58 – 3.30% per transaction.

While Amex traditionally charged a different amount for card present and card not present transactions, OptBlue charges the same amount for each. However, pricing for each transaction does vary, based on the following factors:

  • Average transaction size: Amex transactions fees vary by the size of each customer purchase. Businesses with an average ticket size of $300 will be categorized/charged differently than those with an average ticket size of $30.
  •  Your merchant category code (MCC): This is a 4-digit pin that you choose to classify what type of business you operate. MCC’s are explained in more detail here.
  • Cross-border fee: Amex tacks a cross-border processing fee of .40% onto international transactions.
  • Assessment fee: Like other major card networks, Amex tacks on as assessment fee for all transactions. American Express’s assessment fee is .15% per swipe.

Since Amex charges a flat percentage fee per transaction and your payment processing company determines the additional charges, your best bet at getting a discount rate is through your payment processor. More on this in a minute.

Does OptBlue only work with Amex credit cards?

Yes. But if your customer forgot their Amex card at home, OptBlue also has contactless payment options and can be keyed in during process card-not-present transactions.

Who is eligible for OptBlue?

Business owners that process under $1 million a year in Amex transactions are eligible for OptBlue. With that said, your American Express rate may be less or greater depending on your business’s MCC and Amex doesn’t work with certain classifications of retail businesses. You’ll have to reach out to your payment processor directly to find out if your business qualifies.

Is OptBlue credit card processing right for small businesses?

OptBlue was built for small businesses. There’s nothing more frustrating to in-store customers than realizing a retailer doesn’t accept their preferred payment method at checkout. Since the rollout of OptBlue, consumers have begun expecting retailers to accept Amex. You don’t want to be the outlier in this regard. If your customers have ever asked to use an Amex card, you should contact your payment processor to ensure you’re enrolled in OptBlue.   

How can you enroll in the OptBlue program?

A big portion of the price you pay with OptBlue depends on your payment processor. When OptBlue was rolled out, some of the shadier payment processors didn’t notify merchants of the rate change. They kept charging merchants the same amount instead of the new low rate and pocketed the difference. See why pricing transparency is essential in the payments industry?

Most retailers are charged a markup from the payment processor to start accepting Amex payments through OptBlue. But it’s a challenge to get many payment processors to divulge the rate they’re charging and how they come to that number. In many cases, merchants will be quoted one rate by the payment processor (the base percentage paid to Amex) and charged a much higher rate on their bill once the payment processor’s rate is factored in.

Transparency is key to your ability to make informed decisions about credit card processing, and Payment Depot gives you total pricing transparency every step of the way.

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Payment Depot automatically sets people up with OptBlue unless they do over 1 million in AMEX sales annually. When we quote you credit card processing rates for Amex OptBlue transactions, we factor their processing fee into the rate you’re quoted. So you know exactly what you’ll be paying on Amex transactions and there are no nasty surprises on your monthly bill.

Take the stress out of payment processing and experience firsthand how Payment Depot’s membership-style payment fee structure helps merchants like you save $800 or more a month on credit card processing. Contact Payment Depot’s award-winning customer service team to get a quote for your unique business today!

FAQs about Amex OptBlue

Q: What is Amex OptBlue?

Amex OptBlue is an express merchant account pricing model by American Express. It was introduced to make it easier for small to mid-size businesses to accept payments made through American Express cards. Before OptBlue, it used to be quite expensive for businesses to process these payments.

Q: How does OptBlue work?

OptBlue allows small to mid-size retailers to accept American Express credit card transactions alongside those from other major credit card companies without having to pay higher fees. The program is available for businesses accepting $1 million or less per year in Amex payments.

Q: What are the major benefits of using Amex OptBlue?

The major benefits of Amex OptBlue include lower processing fees, increased pricing transparency, the provision of free marketing materials, next-day payment processing, and personalized assistance to promote small businesses.

Q: What is the eligibility criterion for using the Amex OptBlue program?

The OptBlue program is aimed at businesses that process under $1 million a year in American Express transactions. However, a business’s Merchant Category Code (MCC) and classification might affect its eligibility.

Q: What are the transaction charges when using Amex OptBlue?

On average, American Express charges about 1.58 – 3.30% per transaction using OptBlue. However the pricing for each transaction can vary according to factors like the average transaction size, your merchant category code (MCC), cross-border fee, and assessment fee.

Q: How does Amex OptBlue differ from Amex Direct?

Amex Direct is a separate merchant account specifically designed for businesses processing $1 million or more annually in American Express transactions. OptBlue, on the other hand, is meant for businesses accepting $1 million or less annually in Amex payments.

Q: How does Amex OptBlue contribute to pricing transparency in payment processing?

Amex OptBlue contributes to pricing transparency in payment processing by letting payment processing companies add their own markup to OptBlue’s base rate. This allows businesses to have a clear understanding of what they’ll be paying for every transaction.

Q: How does Amex OptBlue help promote small businesses?

Amex OptBlue helps promote small businesses by offering a small discount for cardholders at included retailers. This also includes free marketing materials such as paper and digital signage, placement on the Shop Small Map, floor mats, and more.

Q: Is it possible to make contactless payments with Amex OptBlue?

Yes, OptBlue provides contactless payment options and functionality to key in during card-not-present transactions.

Q: How does Amex OptBlue ensure retailers don’t fall prey to hollow marketing strategies?

OptBlue ensures that retailers don’t fall prey to hollow marketing strategies by promoting pricing transparency in payment processing. Retailers can clearly see the base rate and any additional markup applied by their payment processor. This transparency enables businesses to make informed decisions about credit card processing.

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