Magazine article American Banker

Trouble for American Express in U.K.; Restaurants and Hotels Threaten Boycott over Costs

Magazine article American Banker

Trouble for American Express in U.K.; Restaurants and Hotels Threaten Boycott over Costs

Article excerpt

Trouble for American Express in U.K.

Restaurants and Hotels Threaten Boycott over Costs

LONDON -- American Express Co. has another rebellion on its hands.

Britain's hard-pressed restaurants and hotels, struggling in a recession that has bitten deeply into revenues, are threatening to boycott American Express Co. unless it reduces its sales commissions.

The protest echoes one in Boston earlier this year. American Express conceded there by reducing the discount - the percentage of a sale it collects from a merchant accepting the card - on certain transactions.

Chef Leads the Fight

Meanwhile, the British bank card companies, Access/MasterCard and Visa, are waiting to reap the benefits as merchants begin to shift transactions to those lower-priced systems.

Some British businesses are refusing to advertise their acceptance of American Express cards, which are carried by 1.3 million people in Britain. Many encourage customers to use other but will accept American Express as a last resort.

Michel Roux, owner-chef at the prestigious Waterside Inn in Berkshire, west of London, is leading the burgeoning boycott campaign among businesses that in effect pay commissions of up to 4.5% to the card company.

Difference Can Be Large

That compares with the 1.5% to 2% rates common on Access/MasterCard and Visa card sales. On a $100 charge, a merchant or restaurateur could thus save up to $3 by switching an American Express sale to a bank card. …

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