Bye Bye Amex ?

[TiredOldFlyer]

Sorry if this is a duplication but couldn't find similar thread.

Received today :

"At American Express we're constantly striving to deliver value to our Cardmembers"

Your Platinum Business Card is currently linked to Ascent Premium Membership rewards..........................As of July 1 2012 all points earned
will instead accrue to the new Business Ascent program"

"Now 3 membership rewards points = 2 Airline Partner points."

Same for our Gold Card.

The cards are a part of an Industry program. But we have enjoyed $1 per point for years.

A 30% reduction in points = value ?

 

[nlagalle]

Is that the Charge card or Credit card?

 

[LordGarlic]

This is bad news!!!

 

[kpc]

Sorry if this is a duplication but couldn't find similar thread.

Received today :

"At American Express we're constantly striving to deliver value to our Cardmembers"

Your Platinum Business Card is currently linked to Ascent Premium Membership rewards..........................As of July 1 2012 all points earned
will instead accrue to the new Business Ascent program"

"Now 3 membership rewards points = 2 Airline Partner points."

Same for our Gold Card.

The cards are a part of an Industry program. But we have enjoyed $1 per point for years.

A 30% reduction in points = value ?

Just the other day I was thinking of applying for the AMEX Platinum Business Card...this ends all thoughts of that!!:evil:

AMEX seem to be really cost cutting at the moment...I read somewhere earlier that their profits last financial year were dismall!

 

[cove]

Tired Old Flyer I should be able to help you with my Amex manager so you can say Hello Amex.
She has helped several on AFF that I have referred to her. I guess they were helped because they seem to be very active travellers. Privacy rules apply so I have to presume success.

 

[Moopere]

I read somewhere earlier that their profits last financial year were dismall!

I don't track these things but gee that makes me wonder. I've seen Amex acceptance skyrocket in recent years and the instances of surcharges is falling in my experience ... part of this would be my own subconscious selective shopping but I'm pretty sure that things are getting better out there.

Even today I stopped into a previously unknown (to me) corner lunch type shop and ordered something trivial with bread around it and without even thinking pulled my Amex ... which they accepted without batting an eyelid.

Unless I'm misreading things, I would have thought that this greater acceptance would surely translate into great revenue and profitability. Unless they are suffering just as retail in general is suffering because we're all saving instead of spending.

 

[Moopere]

Hmm, something seems wrong in the OP, or I'm about to get a rude shock. I'd be annoyed for sure at being dropped from Ascent Premium where I could transfer to QFF down to Ascent where I can't ... one would expect a discount on the annual premium for the cards? (hehe, I'm only half joking).

But once in Ascent, surely redemption rates are all even across your different earning cards? Meaning that I generally get 1FF point per MR point from my Ascent membership. I'll be mightily miffed if we're suddenly seeing Ascent reverting back to 3:2 MR:FF

 

[kpc]

AMEX seem to be really cost cutting at the moment...I read somewhere earlier that their profits last financial year were dismall!

I don't track these things but gee that makes me wonder. I've seen Amex acceptance skyrocket in recent years and the instances of surcharges is falling in my experience ... part of this would be my own subconscious selective shopping but I'm pretty sure that things are getting better out there.

Even today I stopped into a previously unknown (to me) corner lunch type shop and ordered something trivial with bread around it and without even thinking pulled my Amex ... which they accepted without batting an eyelid.

Unless I'm misreading things, I would have thought that this greater acceptance would surely translate into great revenue and profitability. Unless they are suffering just as retail in general is suffering because we're all saving instead of spending.

Found the article:

AMERICAN Express Australia is in danger of making a respectable profit when its credit card joint venture with David Jones reverts to a profit-sharing arrangement from next year. According to Amex Australia's just-filed results with the Australian Securities and Investments Commission, the local business made a net profit of just $8.2 million in calendar 2011 from turnover of $1.15 billion. Sad as that might look, it made only $2 million in 2010 and before that had not earned a profit here since 2005.

Amex at last to profit from DJs joint venture

 

[lovestotravel]

I don't track these things but gee that makes me wonder. I've seen Amex acceptance skyrocket in recent years and the instances of surcharges is falling in my experience ... part of this would be my own subconscious selective shopping but I'm pretty sure that things are getting better out there.

Even today I stopped into a previously unknown (to me) corner lunch type shop and ordered something trivial with bread around it and without even thinking pulled my Amex ... which they accepted without batting an eyelid.

Unless I'm misreading things, I would have thought that this greater acceptance would surely translate into great revenue and profitability. Unless they are suffering just as retail in general is suffering because we're all saving instead of spending.

Well yes, but you need to remember and you have mentioned it...

Decreasing surcharges = Getting less revenue from lower merchant fees!

It's really only the smaller businesses that are starting to accept Amex now, and why ? Because more people have bank issued Amex's than ever & the much lower merchant fees!

More people are using cash and more people buying overseas...... More people using debit cards/visa debit cards..... I am sure someone can find the actual figures....

Sad times Amex, but at the end of the day they are a business and with turnover of 1.15 Billion and only a $8.2 Million profit you have to wonder why they bother....

 

[Moopere]

Thanks for the link. Really interesting article - though brief.

I had to giggle at the end of the Amex blurb where there is some pondering if we consumers have all gotten a bit smarter and now pay off our cards rather than run with a balance at 22% - the banks probably don't like us paying off cards, but Amex has always strenuously encouraged full balance payment each month. Although the CC Amex cards seem to accept a running balance, one is in serious danger of ones account falling out of "good order" if you don't make your payments.

I know nothing about the Amex business of course, but I have to say, I smell a rat whenever the local arm of a business that is overseas owned show massive revenue (1.15 billion) yet turns tiny tiny profits or even losses... I may be completely off base, in this case, but I've worked at more then one global company where the parent, being overseas, will 'strip' the local operation of any hint of a profit due to our local taxation laws (too high apparently whether perceived or real depends on your persuasion)

 

[JohnK]

Not good news.

There appear to be a number of letters circulating from Amex at present regarding one "enhancement" or another. I am assuming this is just for the business card and not for all Amex cards.

 

[markis10]

Found the article:


Amex at last to profit from DJs joint venture

Cannot help but think the poor performance of Amex locally is more to do with transfer pricing and it's implications in terms of the local tax regime.

 

[Ricardo]

Cannot help but think the poor performance of Amex locally is more to do with transfer pricing and it's implications in terms of the local tax regime.

Yes maybe that had already counted the 1% cut to company tax that Jules and Swanny had 'promised' then wound back ......

 

[TiredOldFlyer]

The change has been advised only to our Business Charge Cards - part of a "Group Deal" by our major supplier.
And yes, I believe it to be revenue driven particularly in view of the poor performance of Amex in the USA caused by the GFC.
However in saying that their shares on the US exchange are climbing back after reaching an all time low after the GFC and have
produced large capital gains for many clever investors.

 

[Stephen65]

I was also wondering if Amex Australia's tiny profit in comparison with revenue had more to do with transfer pricing than incompetence.

 

[cove]

We might get a second chance to buy those Amex shares with Greece not recognizing the world does not owe them anything but rather vice versa.

 

[koonyaflyer]

Well yes, but you need to remember and you have mentioned it...

Decreasing surcharges = Getting less revenue from lower merchant fees!

It's really only the smaller businesses that are starting to accept Amex now, and why ? Because more people have bank issued Amex's than ever & the much lower merchant fees!

More people are using cash and more people buying overseas...... More people using debit cards/visa debit cards..... I am sure someone can find the actual figures....

Sad times Amex, but at the end of the day they are a business and with turnover of 1.15 Billion and only a $8.2 Million profit you have to wonder why they bother....

A quick look at the RBA website will show the growth of Amex billings over the past few years, whilst some of the larger cards have seen a decline in billings. One would have to hope we can trust the RBA data, which shows a positive picture for Amex.

Dont understand your comment linking decreasing surcharges = lower merchant fees. The merchant keeps the surcharge, not Amex....so if you are suggesting that Amex has dropped their merchant fees by such an amount to justify removal of surcharge I would think that is highly unlikely, and is not reflected in their average merchant fee they state on their website.

In a glass half full world it could be suggested that as businesses see more cards they understand the value of customers like us, who want to use their card freely.

 

[lovestotravel]

Dont understand your comment linking decreasing surcharges = lower merchant fees. The merchant keeps the surcharge, not Amex....so if you are suggesting that Amex has dropped their merchant fees by such an amount to justify removal of surcharge I would think that is highly unlikely, and is not reflected in their average merchant fee they state on their website.

Less surcharges/lower surcharges = Lower merchant fees = Less revenue for Amex

I don't have the time to look quickly but recently Amex changed the points earning for council bills and a few other areas, that would also suggest lower merchant fees

Fact is as a small business I only pay 1.8% now for Amex, a few years ago the best we could get was around 3%

 

[TonyHancock]

A cynical man may suggest that Amex's Australian profit will be whatever Amex want it to be.

 

[kamchatsky]

Maybe Amex is still paying for the mass issuance of points after the 5000 points per 5 transactions uncapped "promotion"?