Is there a policy regarding the acceptance of American Express cards?
On December 15, 2006, OSC issued a policy entitled, “Types of Merchant Cards Accepted.” The policy addresses the types of cards that may be accepted, to include proprietary cards. American Express is considered a proprietary card under the policy. The policy can be viewed at: http://www.ncosc.net/SECP/SECP_Policies.html
Does the State have a master agreement with American Express?
On December 15, 2006, OSC entered into a master agreement with American Express, allowing electing participants to accept American Express.
Does an entity desiring to accept American Express cards have to execute an Agency Participation Agreement?
Yes, participants desiring to accept American Express cards must execute a separate Agency Participation Agreement with American Express. Note that the Master Service Agreement (MSA) the State has with Fiserv/First Data Merchant Services (FDMS) allows for participants to accept cards issued by Visa and MasterCard, without the participant having to execute any additional agreements, other than the Agency Participation Agreement with FDMS.
Are there any additional forms needed to be completed to enroll with American Express?
In addition to the Agency Participation Agreement, an entity should complete:
- Amex Participation Setup Form
- Amex Outlet Setup Form
What is the primary difference between American Express and Visa/MasterCard?
The primary difference is when settlement of the transaction will occur. In the case of Visa and MasterCard, if Wells Fargo is the depository, the funds are received the next banking day after the transaction is authorized. In the case of American Express, regardless of the depository bank used, historically the funds were received two banking days after the transaction was authorized however, American Express has rectified this and participants should receive funds the next banking day after the transaction is authorized.
What involvement does Fiserv/First Data Merchant Services play?
All authorizations are routed through FDMS. However, FDMS is not involved in the settlement of the funds, as the funds are received directly from American Express via ACH credit.
Does American Express provide an online reporting system?
Various reporting is available through Amex’s Online Merchant Services. This online reporting can be used in addition to the reporting available through FDMS’s Commerce Control Center/Clientline. See the following link for enrollment information. AMEX Online Access (external link).
Does American Express assign a chain number and outlet numbers?
American Express will assign each participant a unique chain number, as well as assigning an outlet (establishment) number to each outlet. These Amex-assigned numbers are different than the chain and merchant numbers assigned by FDMS. FDMS will associate the Amex assigned outlet number to the outlet number assigned by FDMS. OSC will convey the Amex outlet number to FDMS as each outlet is enrolled with Amex.
What are the fees charged by American Express?
The discount fee is 2.15% for most transactions, and 1.80% for prepaid cards. This fee is in addition to the $.015 per transaction charged by FDMS.
What are the effective fee rates of the various cards?
American Express charges a discount fee, while Visa and MasterCard charges both an interchange and an assessment fee. FDMS levies a $.015 fee for each transaction, regardless of the type card. Assuming a transaction qualifies for the best government rate from Visa or MasterCard, on a typical $100 transaction the “effective fee rate” for each would be as follows: Visa – $1.61; MasterCard – $1.79; American Express – $2.19. The effective rate for Visa and MasterCard would be higher if the transaction does not qualify for the best interchange rate (e.g., corporate credit card). The effective rate would be lower if the transaction was for a debit card.
Who determines if an entity will accept American Express?
Each participant makes it own determination as to which cards it will accept (e.g., Visa, MasterCard, and American Express). Guidelines contained in the OSC Policy entitled, “Types of Merchant Cards Accepted” should be used in making the determination.
Can a participant be selective as to what types of receipts will accept American Express?
Yes, the participant may accept American Express for only certain types of receipts, taking into consideration the nature of the receipt, including:
- Beneficiary of the receipts
- Ability to fund the cost of the fees
Can any one card brand be preferred over another card brand?
No. If a particular card is accepted for a particular type of receipt, the entity must not promote any one card over the other, or do anything that discriminates against either card.
What is the retention requirement for American Express transactions?
While each card company has different retention requirements, OSC policy requires the transactions for all types of cards to be kept for 18 months.
Does American Express have a guide for authorization procedures?
Yes. See Merchant Regulations – U.S on the American Express website.
Does American Express have a guide for chargeback procedures?
Yes. See Merchant Regulations – U.S on the American Express website.
Does the PCI Data Security Standard apply to American Express?
Yes, American Express requires all Merchants and Service Providers to be Payment Card Industry Data Security Standard compliant. Also see OSC’s policy entitled, “Security and Privacy of Data.”
Can governmental entities not participating in the State Controller’s MSA with Fiserv/First Data Merchant Services participate in the master agreement with American Express?
No. In order to participate in the master agreement with American Express, the governmental entity must be a participant in the MSA with FDMS. American Express may elect to offer the same pricing structure to local units of government, but under agreements directly with the government.