Where Is American Express Accepted?

AmEx says it's reached 'virtual parity' in the U.S. with Visa and Mastercard through partnerships that have gotten small and locally owned businesses on board.
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Written by Sara Rathner
Senior Writer/Spokesperson
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Edited by Erin Hurd
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Co-written by Lindsay Konsko

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If you’ve become accustomed to leaving your American Express credit cards in your wallet when shopping at small or locally owned businesses, you may now find that you can put that card back into service.

According to an American Express representative, 99% of U.S. merchants who accept credit cards also now accept American Express. Thanks to an initiative to increase its acceptance rates among U.S. merchants, AmEx announced that it has achieved “virtual parity” with Visa and Mastercard, according to its internal data.

Why American Express was lagging

American Express is one of the four major U.S. payment networks, along with Visa, Mastercard and Discover. And for many years, AmEx lagged behind all of them in terms of merchant acceptance. As a shopper, may have heard the phrase, "I'm sorry, we don't take American Express."

Compared with the other payment networks, AmEx tended to charge merchants higher interchange fees, aka 'swipe fees.'

The main reason: Compared with the other payment networks, AmEx tended to charge merchants higher interchange fees, aka "swipe fees." When you swipe (or dip or tap) a credit card, the store pays a fee to ensure that you get charged and the store gets paid for the sale. Part of that fee, known as "interchange," goes to the credit card issuer and typically ranges from 1% to 3% of the transaction. This varies depending on multiple factors, including card type, merchant type, and transaction volume and value.

Unlike with debit card interchange fees, which are capped, federal law does not regulate or limit credit card swipe fees. They are typically set by the payment networks, and American Express in the past has been more expensive for merchants to accept, with swipe fees as much as one percentage point higher than the competition as recently as 2017.

That may not sound like much, but it can make a big difference for small businesses operating on extremely thin margins. Not coincidentally, small businesses often were precisely the kinds of places that didn't accept AmEx — until recently.

🤓Nerdy Tip

Why have AmEx swipe fees historically been higher? It has to do with its business model. Typically, credit card companies make much of their money via interest charges. But many of American Express’ most popular products are charge cards rather than true credit cards, meaning cardholders pay their bills in full every month and do not incur interest. AmEx's card business has relied largely on fees, including annual fees and swipe fees from merchants.

More retailers are now accepting American Express

According to AmEx, a large factor in its increased acceptance over the past few years has been its OptBlue program, which allows small businesses (defined as having an estimated American Express charge volume of less than $1 million per year) to accept American Express cards through one of the third-party payment processors that partner with the issuer.

In a shift from the traditional system, those payment processors set the swipe fee rates they charge businesses, so merchants can shop around for a more competitive rate.

According to an American Express representative, 99% of U.S. merchants who accept credit cards also now accept AmEx.

It certainly seems to be making a difference. The Nilson Report, an influential industry newsletter, confirms that third-party partnerships have helped boost AmEx acceptance, based on 2020 data.

Additionally, merchants may have a possible incentive to accept American Express: Their cardholders apparently spend more. On average, consumers carrying an American Express card spend three times more than consumers who don’t, and their average transactions on those cards are 1.7 times higher, according to data provided by American Express.

Where American Express still lags

While the AmEx acceptance gap may have virtually closed in the U.S., it's still common to run into acceptance issues from merchants in other countries.

International acceptance data wasn't immediately available, but the gap with Visa and Mastercard is big enough that AmEx has made closing it a priority. The issuer is working to increase acceptance worldwide by partnering with local banks abroad that will acquire merchants on AmEx's behalf. According to an AmEx representative, they have more than doubled worldwide acceptance since 2017.

Still, AmEx specifically excludes most of its cards from earning dining rewards outside the U.S. Cards like the American Express® Gold Card once earned 4 points per $1 spent worldwide, but as of Feb. 3, 2022 now only earns those rewards at U.S. restaurants.

What's next?

All information about the American Express® Green Card has been collected independently by NerdWallet. The American Express® Green Card is no longer available through NerdWallet. To view rates and fees of the American Express® Gold Card, see this page. To view rates and fees of the Delta SkyMiles® Blue American Express Card, see this page.

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