American Express Card Not Present Surcharge

Let’s break that down a little further.

Defining Card Not Present

The term “card not present” can be a little tricky. It covers any transaction where you don’t run the card through a credit card machine using the magnetic strip or EMV chip. This means that in addition to ecommerce transactions, any transaction where you “key in” card details is considered a “card-not-present” transaction, even if your customer is standing in front of you and hands you the card. Recurring billing transactions are also considered card-not-present (CNP) even if you swiped a customer’s card the first time they paid.

However, contactless transactions (such as Apple Pay) are considered “card-present” transactions if the customer “taps” their phone or device to the credit card machine. Here’s a quick reference list.

Card-Present Transactions

  • Swiped cards (magnetic stripe)
  • “Dipped” cards (chip)
  • “Tapped” phone, Apple watch, or contactless card (contactless)

Card-Not-Present Transactions

  • Customer enters card details into an online checkout page
  • Your staff enters card details into a web portal/computer interface
  • Customer agrees to a recurring billing plan with their card charged automatically

Common ways that businesses accept card-not-present payments outside of a typical ecommerce website include payment links in invoices and accepting payments over the phone. Read more about card-present vs. card-not-present transactions.

What is OptBlue?

OptBlue is an American Express pricing model available to businesses that process less than $1 million/year in Amex transactions. It was rolled out in early 2015, and most small businesses that take American Express are now on that model.

Prior to OptBlue, there was no standardization of American Express fees. Rather, American Express itself set pricing for each business. With OptBlue, American Express created set rates and fees, similar to the structure of Mastercard and Visa’s pricing.

One of the fees Amex set is the card-not-present surcharge.

Card Not Present Surcharge

Now, back to the the Amex Card-Not-Present Surcharge. If your business is on the OptBlue pricing model AND accepts card-not-present transactions, American Express will impose the card not present surcharge.

As of 2018, the card-not-present surcharge is 0.30% of the total transaction volume for card-not-present Amex transactions. If your business only takes card-not-present transactions, that means you’d be charged on the total of your Amex card transactions. If you take some card-not-present payments and some card-present payments, you will only pay the fee on the card-not-present transactions.

The image below shows how some processors list the Card Not Present Surcharge.

card not present surcharge

In this statement, the business processed $5,494.31 in card-not-present American Express payments. This processor is passing along the CNP surcharge at Amex’s stated cost of 0.30%. If you wanted to check the math on the total charge, you would multiply the transaction volume by the rate. 5,494.31 * 0.003 = 16.48293, which rounds to $16.48 – exactly what the processor charged on this statement.

CardFellow clients don’t need to check their statements to ensure accuracy. As a client, you benefit from CardFellow’s free statement monitoring, where we check all your rates and fees to ensure your processor doesn’t overcharge.

Do all processors impose the Card-Not-Present Surcharge?

Unlike some other assessment fees, not all processors charge the Amex card-not-present surcharge. It’s unclear why some processors do and some do not.

However, just because a processor doesn’t list the card-not-present surcharge doesn’t automatically mean you’re paying less than you would with a processor that includes the CNP surcharge. It’s important to compare all of your costs.

Additionally, even though most processors set up businesses on OptBlue pricing, there’s no guarantee that the processor is charging you at the rates set by Amex. Processors can still “bundle” your Amex transactions into flat rates. OptBlue also gave processors the ability to charge a markup on Amex transactions, which Amex previously prohibited. While markups are not inherently bad, you’ll want to make sure that you secure a low markup so as to not pay exorbitant costs to accept American Express.

If you think you’re overpaying for American Express acceptance, try CardFellow’s quote request tool to see what pricing you’re eligible for. It’s free and there’s no obligation. Be sure to check off that you’d like to accept American Express for the most accurate price details. Try it here!

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