What Can High Risk Merchant Account Holders Expect From AMEX in The Future

Feb 20, 2016

American Express has recently talked about its quarterly results. The company is going to cut its expenses by nearly $1 billion within 2 years.

American Express’ Results

In 2015, MPD CEO Karen Webster said American Express could probably benefit by closing out everything except for Amex’s commercial card portfolio. The latter counted for fewer acceptance limitations, high transaction values, and less regulatory pressure.

In fact, the corporate card portfolio had been quite successful for the company. Today, the recent report by Amex shows the strength of the commercial card security net is arguable.

Amex’s net income has registered a 38% year-over-year decline. On the other hand, the dollar’s recent strength against foreign currencies hasn’t been beneficial to the company. Currently, American Express’ product portfolio doesn’t appear to be as resilient as it was.

All the factors, including foreign exchange unpredictability, regulatory effects, and the urge for innovation and new payments technologies, play an important role in this regard.

Corporate Card Segment

Ken Chenault, CEO at American Express, mentions that the corporate segment has recently been the most disappointing. T&E has proved to be the most easily reducible category from the aspect of expenses. In fact, T&E cutbacks indicate abatement.

Over the years, Amex’s Global Commercial Services unit witnessed a 3% decrease in card billing in Q4 2015, thus counting for $45.5 billion.

In 2015, net income for the unit accounted for $666 million. In 2014, it was $1.5 billion. From 2014 to 2015, the revenue net of interest dropped 32% to $3.5 billion.

Global Commercial Services had a net income of $132 million for Q4, which is 78% down from the previous year’s same period. It should be mentioned that Amex’s 2014 statistics included profits gained after its investment in T&E firm Concur.

Concerning 2015 earnings, Campbell said they had also reduced their fuel and travel costs.

What To Expect

Merchants in the high-risk industry shouldn’t be concerned about their business. Choosing EMB, the #1 high-risk processor in the US, you can secure and grow your business. EMB offers a high risk merchant account to all businesses in the high-risk industry. EMB boasts A+ rating with the BBB, and provides fast and easy approval.

American Express has recently introduced new features for its corporate card products. Also, the company will support Apple Pay for commercial cards to new markets, such as the Canadian market and the Australia one. The European and Asian markets are going to be included this year.

This year, Amex’ commercial card accounts have been supplemented by Apple Touch ID capabilities, and a new small business card product called “SimplyCash Plus Business Credit Card” has been launched. The latter enables SME owners to use the card even when their credit limit is over. Time will show what to expect.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.