American Express (Amex) is launching a new merchant acquiring program, OptBlue, which aims to significantly increase acceptance of Amex across Australia.

Thousands of small merchants will be onboarded to the Amex Network through two of Australia’s leading merchant acquirers, Fiserv and Tyro Payments, who are first-to-market with the new program.

With OptBlue, small businesses will be able to process Amex transactions at a competitive rate to other card schemes, with both acquirers providing a one-stop-shop servicing solution for all card types including a single statement and settlement process, plus a single onboarding journey and servicing contact.

A recent Amex commissioned survey found two in three card members say it’s important that businesses accept Amex and 48% of card members say they tend to abandon in-store purchases if they can’t see that Amex is accepted.

In a sit down interview with Retailbiz, American Express Australia and New Zealand vice president of merchant acquisition, Stacey Rylands said OptBlue is part of the company’s global mission to end the question: ‘do you accept American Express?’

“This strategy started in the US with the aim to close merchant acceptance gaps, which has successfully been done by launching the OptBlue program. Now in the US, 99% of merchants that accept credit, also accept American Express,” she said.

“We’ve accelerated the strategy by rolling out OptBlue into both Canada and Mexico, but we’ve now turned our sights to international markets and are pleased to confirm that Australia is the first launch market outside of the Americas.

“We recognise that merchants want convenience and a cost-effective self-servicing solution. The value of OptBlue is to ensure that American Express is accepted in more places, but it’s a bold strategy to enable merchant acquiring partners, such as Tyro and Fiserv, to provide a seamless offering to micro and small businesses.

“Under OptBlue, small businesses can accept Amex at a competitive rate that is 100% set by our partners, who can ultimately offer a simple one-stop shop for businesses to operate more efficiently.

American Express headquarters in Sydney.

“There’s been a lot of work done to ensure that Amex is competitive and resonates with small businesses. OptBlue is a deliberate effort to ensure that Amex can be accepted at more places and one of the historic barriers was cost. Amex has never been more affordable than it is today.”

Tyro Payments chief product officer, Dominic White explained that there were a number of barriers for merchants to accept Amex prior to the launch of OptBlue.

“Historically, a small business would approach us about Amex and we could enable acceptance through our infrastructure. However, they needed a separate contract and separate setup. Sometimes we could do a referral, but other times the business would need to contact American Express directly, which was an immediate barrier,” he told Retailbiz.

“There is also a misconception that Amex is more expensive – or too expensive – but it’s not always the case. Pricing varies by individual business, but we can now treat Amex the same as we do Visa or Mastercard with the OptBlue program.

“From a business owners’ point of view, they don’t need to worry about a different process. It’s all included and enabled in near real-time. Previously, there were some cases where there was a three-to-five-day delay before Amex could be enabled. Now it’s the same time as the other card schemes – one process, one price and one settlement.

“Reconciliation is a huge issue for small businesses because many of them still accept cash and cheques, in addition to different card types. Having a separate settlement from an Amex facility was another hassle, especially for small businesses, who are often time poor and doing their reconciliation after-hours.

“It’s automatically enabled for all Tyro customers – both existing and new customers. When you want to work with us to facilitate payments, it will include Amex as a standard inclusion across all payment packages.

OptBlue is part of the company’s global mission to end the question: ‘do you accept American Express?’.

“With Tyro’s strength in the hospitality sector, there’s a lot of corporate expense accounts that use Amex so there’s a risk for businesses that don’t accept Amex – they could be losing big group bookings or larger sales, especially this time of year with Christmas parties and get togethers.

“From our point of view, we want to enable as many businesses as possible to accept payment methods that their customers would like to use. Tyro is aiming for 100% of our customer base to opt into OptBlue.”

Commenting on the program, Fiserv general manager for Australia, New Zealand and the Pacific, Gavin Jones said, “Our clients are always looking for ways to streamline their operations, and we are committed to enabling them to do so. Fiserv has a long-standing partnership with American Express to enable acceptance of Amex Cards around the globe, and the expansion of this partnership through the OptBlue program will provide our merchant clients a better way to accept Amex Card transactions.

“Merchants will benefit from access to funding, reporting and billing directly with Fiserv. As a result, merchants can get paid faster for their Amex transactions and simplify reconciliation, facilitating improved cashflow and simpler reporting.”

Tapping into more affluent and more loyal customers

The recently released Amex Trendex global research found Australians across all generations are adopting creative spending strategies to continue enjoying experiences and purchases they love, despite cost-of-living pressures. 

This includes booking off-peak dinner reservations, cashing in loyalty points to pay for vacations, and renting (rather than purchasing) luxury goods.

Three-quarters (75%) seek out deals and promotions at restaurants when choosing where to dine out. Among families, 77% of Australian parents agree that they seek kids-eat-free venues and 62% agree they are happy to cover the cost of group bookings to rack-up more rewards points. 

Almost all (98%) Australians say they plan to take a holiday with 92% having used a ‘travel hack’ in the last six months such as having a credit card that can earn points to be cashed in for travel rewards (66%), which increases to 72% among Millennials. 

Australians are also choosing to rent rather than purchase luxury items outright (28%) with more than half (52%) selling a luxury item to upgrade to a newer style. 

On average, Amex card members spend 3.4 times more annually than non-card members and 2.4 times more per purchase. In Australia, over 136,000 new places were added to the American Express network in the last 12 months with retail and dining seeing the highest gains. Recent signings include AirTasker, Temple & Webster, Oscar Wylee and the largest council in Australia, Brisbane City Council.

“We have high spending, loyal customers that ultimately want to be able to use their card. We’re being aggressive and bold with our ambitions to close merchant acceptance gaps, bringing new merchants onto the network and giving our card members more places to be able to spend, which is ultimately fueling our success,” Rylands said.

“We’re also attracting Millennials and Gen Zs at record levels, which is exciting because it’s bringing in a whole new generation of card members, which will also facilitate future growth.”

According to Amex’s Q3 financial results, Millennial and Gen Z consumers remain the company’s fastest-growing consumer cohort, attributed to investments in value propositions.

Spending by these customers was up 18% in the US from a year earlier, and they accounted for more than 60% of all new consumer account acquisitions globally. Demand for Amex premium products remains high with acquisitions on fee-based cards accounting for more than 70% of all new account acquisitions in the quarter.

“We’ve reached our ambition for the US market and we’re turning our attention to international coverage, focusing on achieving strong acceptance in key priority cities and industry verticals. We have more than tripled the number of locations that accept AMEX since 2018 and from an Australian perspective, year-on-year growth is exponential,” Rylands added.

Feature image: Dominic White (Tyro) & Stacey Rylands (American Express).