Credit Card Processing, Legal

American Express Anti-Steering Supreme Court Case

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You may have heard that a case involving American Express went to the Supreme Court. The case, Ohio v. American Express, determined whether businesses are allowed to suggest customers use lower cost credit cards when paying for purchases.

The court heard arguments in early 2018 and ruled in late June. Let’s look at the arguments on both sides and the results of the case.


Ohio v. American Express

American Express’ merchant agreement includes an “anti-steering” clause that prohibits businesses from encouraging customers to use a lower cost card when they try to pay with an American Express card. That rule is at the heart of the case. 11 states, led by Ohio, are challenging the rule on the grounds that it violates antitrust laws, which are designed to ensure fair competition. Previously, the Department of Justice has been involved in the lawsuits on the side of the states, but did not join the states in the appeal to the Supreme Court.

The States’ Argument

The states claim that American Express charges higher fees than the other credit card companies and that the anti-steering rule prevents competition by prohibiting businesses from suggesting that consumers use a card with cheaper fees.

American Express’ Argument

American Express argues that its rule ensures that businesses don’t discriminate against Amex cardholders. The company further explains that it uses the fees businesses pay to fund consumer rewards programs.

In late summer 2017, the Department of Justice asked the Supreme Court not to take the Amex case, arguing that it needed to be addressed more fully in lower level courts. Despite that, the Supreme Court agreed to hear the case and will determine whether the American Express anti-steering provision violates federal antitrust rules.

History of the Case – Lower Court Rulings

In 2015, a Brooklyn federal court sided with the states. It found that Amex violated antitrust laws in enforcing the anti-steering requirement. However, the US Court of Appeals for the Second Circuit later reversed that ruling, stating that Amex must balance businesses and cardholders as its clients and that the lower court had erred in not taking the cardholder side into account. Circuit Judge Richard Wesley, quoted by Reuters, wrote, “Though merchants may desire lower fees, those fees are necessary to maintaining cardholder satisfaction.” Many cardholders are drawn to American Express due to the robust rewards programs the company offers; such programs are partially funded by the fees businesses pay.

Bloomberg further clarifies that the court claims that the states failed to prove that American Express’ rules harmed cardholders.

How Ohio v. American Express Could Affect Your Business

The outcome of the case primarily affects businesses that want to steer customers to other credit cards. For businesses that accept Amex but prefer that a customer use Visa or Mastercard, the Supreme Court’s ruling can affect whether you’re able to encourage customers (either verbally or through discounts) to utilize a different card. If the Supreme Court rules in Amex’s favor, you would not be able to encourage the use of other cards in place of Amex. However, if the Supreme Court rules in the States’ favor, you would be able to suggest a different card.

However, there’s no requirement to accept American Express. If the costs are too high for your business, an option would be to simply not accept American Express at all.

If you’re in an industry that takes a lot of American Express cards – such as B2B services, dining or entertainment with lots of corporate clients, etc. – then forgoing Amex may not be your best business decision. In those situations, it would make sense to focus more on ensuring that you’re getting the lowest possible Amex pricing for your business.

Results of Ohio v American Express

In late June 2018, the United States Supreme Court ruled in American Express’ favor. The 5-4 decision found that the states did not make a case that American Express’ anti-steering rules harm cardholders in addition to businesses. The Court agreed that American Express funds their robust rewards program in part through higher swipe fees.

As a result of the decision, Amex can continue to enforce its anti-steering clause and businesses are not permitted to suggest (through words or offering discounts) that a cardholder use a less expensive card.

American Express naturally praised the ruling, stating that it’s good for cardholders and encourages competition in the credit card space, while retail groups have expressed disappointment in the decision.

Is Amex really that much more expensive?

American Express has a reputation as the “expensive” credit card to take, a reputation that does have some validity. The cards have typically cost more to accept than Visa or Mastercard. However, in 2015, American Express rolled out a new pricing model, called OptBlue. OptBlue attempts to combat higher fees and bring the cards closer in cost to other brands.

There’s a problem, though. Many businesses aren’t aware of OptBlue, which has allowed some processing companies to continue to charge higher fees and pocket the difference.

Related Article: OptBlue Pricing Backfires for Businesses.


When a business on the OptBlue model has a competitive markup, fees are closer to Visa’s and Mastercard’s. Amex is still likely to be more expensive, but it’s not as large of a difference as it once was.

Reducing Cost to Accept American Express

If you accept American Express and think you’re paying too much, the first thing to do is identify if you’re eligible for OptBlue pricing and if your processor charges accordingly. Businesses that process less than $1 million/year in American Express transactions are eligible for OptBlue. (Businesses processing more than $1 million/year in Amex will need a direct account with American Express.)

Once you determine if you’re eligible for OptBlue, you’ll need to find out if that’s the pricing model you’re on and what you’re paying for a markup. Most processors have switched businesses over to OptBlue or have the ability to do so. Check your processing statement to locate the costs you’re paying for American Express transactions, and compare them to the costs for Visa and Mastercard transactions. A big difference between them could indicate you’re overpaying for Amex acceptance.

Need help determining if you’re paying too much for Amex? Get baseline pricing to see where you should be, and give us a call for expert analysis. Start here.

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Ellen Cunningham

BY Ellen Cunningham

Ellen has a degree in English, which she puts to work every day researching and writing articles, processor reviews, and social media posts. She enjoys the challenge of explaining complex topics - making her a perfect fit for credit card processing - and strongly believes in CardFellow's mission of empowering business owners through education.When she's not busy following the latest industry news, Ellen can be found cycling the beautiful trails of southern New England, narrowly losing at pub quizzes, or practicing her trapeze skills in aerial circus class.

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