"...EXAMINE FEES ASSOCIATED WITH YOUR BUSINESS FROM THE "ACTUAL" COSTS OF THE FEE RATHER THAN THE "PERCEIVED" COST OF THE FEE. IT MAY SURPRISE YOU."
With ALL businesses there are significant costs associated with accepting, processing, tracking, bookkeeping, and accounting "money." Money...you know that thing that we pour our blood, sweat and tears (mostly tears) into earning everyday? Tour and activity businesses are no exception.
We had an independent analysis run on our merchant service expenses, and below are the results as it relates to accepting American Express credit cards:
- For statement periods Apr 2015 and May 2015, American Express transactions were 17% higher (dollar for dollar).
- The difference in merchant charged rate was 0.5%
We work with customers on a regular basis who don't accept American Express in the name that they are "saving money by avoiding the higher rates of American Express credit cards!" Internally we aggressively look to control costs and minimize fee assessments every chance we get. This is NOT one of those instances. We will gladly take a 17% higher average transaction for an increased fee of .5%...ALL DAY!
Of course the math might be different for your business. The point that should be understood about calculating fees is to examine fees associated with your business from the "actual" costs of the fee rather than the "perceived" cost of the fee. It may surprise you:)
Our recommendation: If you are looking to attract corporate clients, large groups, or your average transaction is greater than $100.00 we would recommend that you consider accepting American Express.
Below are a few other interesting stats from American Express:
- Average household income of card holders is $95,000 (1.4X higher than non-card holders)
- Average transaction size is 70% higher than competitors.
- 79% of small business use credit cards American Express is the leading provider.
- 61% of business card members surveyed in 2011 report that their employers prefer or even require they use AMEX for business expense.
Check out this previous post on: Why Tour Operators Need a Reservation System.