On the one hand, this created an inconvenient situation for merchants, who couldn’t simply use the same processor for all card brands. Unlike companies that would follow, Amex handled all issuing and processing chores themselves: the only way a merchant could accept American Express payments was to use Amex for processing. This is where Amex first established themselves in the world of financial services.Īmerican Express later offered one of the first credit cards on the market. Originally an express mail service, the brand introduced the concept of traveler’s cheques around the turn of century. When American Express was founded in 1850, however, it wasn’t even a credit card company. Those brands were built on an extensive association of issuing and acquiring banks that interact with cardholders on behalf of the network.Ĭonfused by Differences Between Card Networks? But, if we look behind the scenes, American Express-and it’s newer rival, Discover-differ considerably from Visa and Mastercard. Why is American Express Different?Ĭonsumers often think of their various credit cards as being interchangeable. With that in mind, let’s take a closer look at how American Express chargebacks differ from those sustained by other major card brands. Thus, when it comes to chargebacks, there’s still a good chance merchants will have to deal directly with Amex. That said, Amex is still one of the largest issuers of Amex-branded cards. Select banks have been granted the ability to issue Amex cards, while certain merchants are now permitted to use the same processor for American Express transactions that they use for processing other cards. The company softened this stance within the last few years, though. No other US banks were allowed to offer Amex cards, and merchants who accepted Amex had to use American Express processing exclusively. At one point, in fact, American Express transactions could only be processed through Amex.Īmerican Express held strictly to that all-inclusive business model for a long time. At the same time, the company is able to process payments for merchants. The reason is simple: unlike larger rivals like Visa and Mastercard, American Express serves as an issuing bank in addition to providing card payment-processing services to merchants.īy operating as both the card network and the bank, Amex can directly issue its own branded cards to customers-or “card members”-without relying on third-party issuers. The process is different, though, in that it is typically more straightforward.
Why American Express Chargebacks are DifferentĬhargebacks on American Express (Amex) cards serve the same function as chargebacks on other credit cards.
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