American Express unlike MasterCard and Visa does not act like intermediary parties, forming a link between major banks, financial companies and credit unions. The Visa or MasterCard named cards are issues by the credit unions. Merchants have to pay a fee to be part of the Visa or MasterCard network through the credit union.
A series of steps are initiated when a customer uses MasterCard or Visa for transaction and involves multiple parties. American Express is quite different than MasterCard or Visa; it is like a one-stop shop.
American Express cards are issued by the American Express company itself and do not act as an intermediary organization between the merchant and the consumer like Visa and MasterCard. AMEX being their own bank is able to give a better customer service to its customers and able to sort out any dispute between a merchant and customer without going back and forth or freezing any account.
For example, you go to a restaurant and get charged for something you did not order. The blame game will be on, where wither the merchant will blame the credit card company or vice versa. In case of AMEX, the company will help you out either by refunding or crediting that amount to your account immediately while settling the dispute with the merchant.
The other reason why one should choose American Express card over the others is that you pay less than the others with AMEX card. Often AMEX users say jokingly that they would like the merchants to pay a bit more for the products that AMEX holders buy.
This joke as well as the reason that some places do not accept AMEX cards needs to be explained a bit. Well, AMEX charges 3-4% of the purchase amount compared to 1-2% charged by Visa and MasterCard to the merchant. Hence AMEX is expensive for the merchants. But how does that benefit you as an AMEX cardholder?
AMEX charging more to the merchant basically means that every time a customer swipes a Visa or MaterCard or pays by cash you are getting a subsidized rate. But how? Those paying cash will pay for example $50 for a $50 item, but when you are paying with AMEX you will be actually paying $47. Though your bill will show $50 and be credited to you card, but you will get that $3 back either as a reward point, some other benefit and most important of all a beater customer service.
This brings to the third reason on why American Express Card is better than other. They give their customers extra benefits and exceptional reward programmes. For example, if you use AMEX to buy any product worth $1000 or more and it gets stolen, AMEX will buy you that exact item. This falls under their ‘American express – Purchase Protection’. It is just one of a kind service that AMEX offers in the industry.
There are many more such benefits, offers and services provided by AMEX. People who use AMEX are often quite loyal to the company; it’s not because of the brand name, but because of the benefits and the business model that caters to its customers.