American (Express) Hegemony?
November 27, 2011 3:48 PM
Why is the corporate credit card space seemingly dominated by American Express?
Every corporate card I can remember seeing/using has been an Amex. But I know Amex charges merchants more than Visa/MC and is accepted in fewer places. So what do they offer corporate customers that has enabled their seeming dominance in the space? Or is this just my limited personal experience? Thoughts on why Visa/MC have been unsuccessful in challenging this market?
Every corporate card I can remember seeing/using has been an Amex. But I know Amex charges merchants more than Visa/MC and is accepted in fewer places. So what do they offer corporate customers that has enabled their seeming dominance in the space? Or is this just my limited personal experience? Thoughts on why Visa/MC have been unsuccessful in challenging this market?
Probably marketing for the most part. Visa/MC have not been as successful because they put more of their marketing towards individuals with higher interest rates, smaller limits, etc
Also the "prestige" or at least presumed prestige of Amex over other cards, and of course Amex's no-limit cards probably have a lot to do with it.
posted by 2manyusernames at 4:00 PM on November 27, 2011
Also the "prestige" or at least presumed prestige of Amex over other cards, and of course Amex's no-limit cards probably have a lot to do with it.
posted by 2manyusernames at 4:00 PM on November 27, 2011
lollusc - I've noticed the same thing with my company. I brought this up to my manager, and was told that at the of the year AmEx will reimburse the company based on the $$ volume that they book at their "preferred vendors" for air/car travel.
posted by skwm at 4:08 PM on November 27, 2011
posted by skwm at 4:08 PM on November 27, 2011
My stepdad's last company used it to manage expense accounts because of the no limit thing, I think. When he was traveling internationally on a moment's notice, that was surprisingly helpful - or rather, he was surprised at how much easier it was never having to deal with calling to get a big charge approved. I'm sure there were months he was charging well over $10,000, flying to Venezuela twice in a month, living in hotels, etc.
I was also under the impression that their terms were very slightly easier to deal with, at least at one point - something like "you don't accrue interest as long as you pay when your statement shows up" versus "you accrue interest starting 21 days after the charge occurs" or whatnot. The original model with AmEx was that you paid everything off in full and never carried a balance over - it was rather like outsourcing the bulk of your accounts payable duties, rather than taking out a credit line. I know they also have really great customer service and lots of services specifically focused on the corporate market, and my dealings with other big companies (though not any of the banking services types) through my job make me think this could be really, really important.
posted by SMPA at 4:13 PM on November 27, 2011
I was also under the impression that their terms were very slightly easier to deal with, at least at one point - something like "you don't accrue interest as long as you pay when your statement shows up" versus "you accrue interest starting 21 days after the charge occurs" or whatnot. The original model with AmEx was that you paid everything off in full and never carried a balance over - it was rather like outsourcing the bulk of your accounts payable duties, rather than taking out a credit line. I know they also have really great customer service and lots of services specifically focused on the corporate market, and my dealings with other big companies (though not any of the banking services types) through my job make me think this could be really, really important.
posted by SMPA at 4:13 PM on November 27, 2011
AmEx offers automatic travel insurance on plane flights, car insurance on rental cars, it's own refund policy above and beyond vendors' policy, price match guarantees, etc.
posted by Jacqueline at 4:23 PM on November 27, 2011
posted by Jacqueline at 4:23 PM on November 27, 2011
I used to be the credit card program administrator. We had an American Express program and we had a MC program.
American Express did not run individual credit checks on each employee I wanted to open a card for. MC did, and the process when someone was declined was annoying. If I called I was talking to someone at Amex within 3 rings, MC had me on hold for 10 minutes +. Amex has amazing travel deals, we would get rebates at the end of the year from American, United and Continental because we put enough money on the Amex cards with them. The only real "perk" to our MC program was they would send us one bill to pay every month.
We only had the MC cards for people who traveled internationally extensively, Amex is not widely accepted outside the US.
Also remember American Express is one company but for MC you have to go with a specific bank, not many of the banks want to run a corporate program.
posted by magnetsphere at 5:12 PM on November 27, 2011
American Express did not run individual credit checks on each employee I wanted to open a card for. MC did, and the process when someone was declined was annoying. If I called I was talking to someone at Amex within 3 rings, MC had me on hold for 10 minutes +. Amex has amazing travel deals, we would get rebates at the end of the year from American, United and Continental because we put enough money on the Amex cards with them. The only real "perk" to our MC program was they would send us one bill to pay every month.
We only had the MC cards for people who traveled internationally extensively, Amex is not widely accepted outside the US.
Also remember American Express is one company but for MC you have to go with a specific bank, not many of the banks want to run a corporate program.
posted by magnetsphere at 5:12 PM on November 27, 2011
I work for a large company and we use MC. We have alot of international travel every year, and most people don't even apply for the corporate card unless they travel, so maybe it was easier to just have MC for everyone.
posted by cabingirl at 6:32 PM on November 27, 2011
posted by cabingirl at 6:32 PM on November 27, 2011
tagging on to what magnetsphere said, MC and VC really don't do proper corporate cards, meaning they are really personal CCs with a company billing address. The perks are also much better because they charge the merchant 1 more point, on average, compared to bank cards.
posted by randomkeystrike at 8:17 PM on November 27, 2011
posted by randomkeystrike at 8:17 PM on November 27, 2011
I can tell you a little bit about this from the merchant side of things and why corporate business loves using Amex with us.
Amex cards virtually never decline. If an Amex declines, it's almost always either due to corporate putting a limit on the employee's per-day charges or they're on the phone immediately because the card has been compromised. This is more than just accounts without limits, it's Amex being able to keep their systems straight. Due to the fragmented nature of Visa and MC, I've seen cards that won't work in an entire state due to fraudulent charges there before. No amount of escalation will fix the problem. Amex? Oh yeah, they'll fix things on the spot for you unless you have done something wrong, and even that is negotiable.
Amex cards are very, very good about chargebacks. Was there a charge for a service and it was not previously agreed upon, signed for, and proven delivered? You can contest it successfully. Smoke in a hotel room? That charge won't hold on your Amex. Charged 18% gratuity automatically on a ticket for 7 when they charge for parties of 8 or more? One call and it's fixed on your word alone. Amongst merchants, Amex chargeback policy is known as "Refund now, ask questions later but it won't matter, you'll still refund." There's a reason that a lot of businesses still won't take American Express even past the higher service charges.
Amex offers Centurion cards to the top end customers. A business owner who covers expenses through Amex exclusively can easily spend enough to count as top end, same goes for executives in larger businesses. Suddenly, the people in charge can have a card that grants them elite status with several airlines and hotels without stringent loyalty requirements, they have personal and travel concierges to take care of business that a personal assistant may not have the time or expertise to take care of properly, and quite honestly, it's a major status symbol. If there's no clear disadvantage to choosing Amex for company business, this is certainly a nice nudge in their favor.
Short end of it, Amex offers customer service above and beyond what Visa, MC, or Discover do or even can. In the corporate world, it's worth paying extra to save time and frustration. For merchants, they put up with Amex because if they don't, they could easily lose a lot of business. I wind up more surprised when corporate cards aren't Amex. International travel makes sense, and some places still won't take Amex so it can be a bit of an expense account hassle at times, but it's pretty heavily weighted in favor of them in almost every other way.
posted by Saydur at 12:07 AM on November 28, 2011
Amex cards virtually never decline. If an Amex declines, it's almost always either due to corporate putting a limit on the employee's per-day charges or they're on the phone immediately because the card has been compromised. This is more than just accounts without limits, it's Amex being able to keep their systems straight. Due to the fragmented nature of Visa and MC, I've seen cards that won't work in an entire state due to fraudulent charges there before. No amount of escalation will fix the problem. Amex? Oh yeah, they'll fix things on the spot for you unless you have done something wrong, and even that is negotiable.
Amex cards are very, very good about chargebacks. Was there a charge for a service and it was not previously agreed upon, signed for, and proven delivered? You can contest it successfully. Smoke in a hotel room? That charge won't hold on your Amex. Charged 18% gratuity automatically on a ticket for 7 when they charge for parties of 8 or more? One call and it's fixed on your word alone. Amongst merchants, Amex chargeback policy is known as "Refund now, ask questions later but it won't matter, you'll still refund." There's a reason that a lot of businesses still won't take American Express even past the higher service charges.
Amex offers Centurion cards to the top end customers. A business owner who covers expenses through Amex exclusively can easily spend enough to count as top end, same goes for executives in larger businesses. Suddenly, the people in charge can have a card that grants them elite status with several airlines and hotels without stringent loyalty requirements, they have personal and travel concierges to take care of business that a personal assistant may not have the time or expertise to take care of properly, and quite honestly, it's a major status symbol. If there's no clear disadvantage to choosing Amex for company business, this is certainly a nice nudge in their favor.
Short end of it, Amex offers customer service above and beyond what Visa, MC, or Discover do or even can. In the corporate world, it's worth paying extra to save time and frustration. For merchants, they put up with Amex because if they don't, they could easily lose a lot of business. I wind up more surprised when corporate cards aren't Amex. International travel makes sense, and some places still won't take Amex so it can be a bit of an expense account hassle at times, but it's pretty heavily weighted in favor of them in almost every other way.
posted by Saydur at 12:07 AM on November 28, 2011
When I worked for a Fortune 500 company my corporate card was a MasterCard. I routinely charged $50-$100k each month and had no issues.
Interesting to see some experience from card administrators as to why they would prefer Amex.
posted by Coffeemate at 8:16 AM on November 28, 2011
Interesting to see some experience from card administrators as to why they would prefer Amex.
posted by Coffeemate at 8:16 AM on November 28, 2011
I don't know if this is a peculiarity with our card processor or what, but we manually key in a lot of CCs for phone orders, and on the AMEX cards, we are given an extra field to enter an invoice or sales order number, and on the other cards we are not. So that extra field (this charge is for this order number) may be all the difference from the corporations perspective, settling the accounts every month.
posted by xedrik at 10:16 AM on November 28, 2011
posted by xedrik at 10:16 AM on November 28, 2011
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posted by lollusc at 3:57 PM on November 27, 2011