Merchant accounts has been a hot topic on the Global From Asia blog. It has lead into merchants in Hong Kong being able to receive American Express credit cards. From one of the hottest topics is Stripe coming to Hong Kong, and when? It has gotten quite a few comments and stays active with news and updates.
One of the comments was a nice business woman who is struggling to get her merchant account to accept American Express.
Hi Michael, Great Article, this has been such a BIG pain point for my website. It’s amazing that a place like hong kong is dealing with 20th century problems :)– So far I LOVE working with Braintree, they are great, the only problem is they are approved for Mastercard and Visa only, so if I want to accept Discover, Amex, or any other card type I have to apply for an SC # on my own. For over a month now I’ve been dealing with AMEX Merchant Services, they have been a nightmare – I really hope either Braintree or Stripe has a solution soon.
I dug into my merchant account (I’m using Stripe now, was using Braintree at the time of writing this post) and realized Braintree doesn’t have the option to add AMEX and need to apply.
So I did, and today I’ll share some of the research and discoveries I found while going through the process.
Is Accepting American Express Worth the Hassle?
First, is it worth going through the hoops to get an account. The best way is to see if your customers have an American Express card. Then see if they prefer to use it. It is more common among business owners – so if you’re selling to business executives who are putting the charge on their company it may be worth the trouble.
Still, I feel while a customer may prefer using American Express, they must be used to seeing sites and merchants who don’t accept AMEX. While those TV commercials I saw in USA as a kid showing a vendor in the streets of the Middle East happily swiping the tourists American Express card, I don’t believe that is the reality.
Visa and MasterCard still dominate.
Yet, let’s look a bit more
And another comment from Matt on the Stripe post:
I am also curious about this. The FAQ says: “All merchants in Singapore, Hong Kong and Malaysia can accept PayPal and cards on the Visa and MasterCard networks as long as the cards are enabled for online use. Currently, American Express is only available for merchants located in Hong Kong.”Matt
Doesn’t Come In As Default in Merchant Accounts
So when I started investigating if I could accept American Express with my Braintree merchant account, their customer service replied pretty quickly with the following:
I hope you are well! Your Global From Asia merchant account is definitely eligible to accept American Express.
In order to accept AmEx, we will need for you to set up a Service Establishment Number (SE#) with AmEx for each presentment currency you would like to accept Amex with. They can be contacted at: 2277 2277. Additional information can be found on their website here.
Once you’ve set up your account, we’ll need for you to fill out the attached pricing sheet for each currency with your SE number and business information.
You will be able to accept payments from AmEx cardholders with this connected, but please note that our support for this card type is currently in “beta”. As such, we are not billing you for these transactions at present (aka fee-free AmEx processing!). However, we’ll reach out to let you know when you can expect to begin seeing transaction charges for AmEx transactions.Braintree Customer Support
Well then, time for me to apply! Seems a lot of other merchant accounts are like this as well. I had a merchant account in my USA business (back in the day!) and also remember having to apply for American Express separately. My buddy Andrew Moran from Merchant Solutions LLC also mentioned Amex doesn’t share any of their commissions with the merchant account vendor. Jeez, why not share a bit on the clients these vendors bring them?
Also it’s worth noting, Braintree Hong Kong supports American Express integration, but other Southeast Asian businesses cannot integrate, as of this posting.
Apply For An American Express Account Directly
So there are 2 ways to apply – via phone or by filling out their online form. I opted to fill out the form first, and completed my company information. After completing the form they told me they would contact me within 7 days.
I also called, just to help Christina out on the blog comment, not thinking I’d need to apply. Their client service rep seemed pretty nice and was ready to help me apply over the phone. She looked up my account by various keywords and couldn’t find an existing one (as before I thought Braintree had American Express automatically). But I told her I’d ask my merchant account first before applying.
Maybe I should have called instead of filled out the form online, as it has been about a week and no reply yet.
(Update) So it was a bit slow doing this as I did it right before the Chinese Lunar New Year holiday. I got a nice personal reply from their Senior Manager of Strategic Acquisition. After a few emails back and forth, he felt it was best to meet me in my office to discuss. I have a feeling it was also a prerequisite that they visit my company’s office to very I have a “real office” and not a virtual one?
I was really amazed he came to meet me in TST! Their office is in Taikoo Shing so it is a bit of a distance for him.
We talked for some time and he explained the whole process. I did my best to take down notes, so here is how it works, from my understanding.
To apply, you need to provide audited financial statements of your last audit.
Once they review this and your company documents (CI, BRC) as well as your passport, they will let you know if they accept you or not.
Once accepted (hopefully), you can then process American Express cards! But only in Hong Kong dollar (HKD) currency.
Now, lucky for you, I made sure to ask him how to get a USD merchant account. It is a bit more complex.
Once you get the HKD account and account number, you may never need to use it, but you do need to have it in order to next apply for a USD account.
You will talk to their multi currency account team, a different department than their standard HKD account. They will also now ask you for more information, and especially if you’re American they will ask for a W8-BEN form to be completed.
If you’re then approved for a USD account, it will be a new account and new account number. You then take this SE account number and put it into Braintree gateway or any merchant gateway you have in order to accept American Express.
How much is the processing rate? He said that of course it depends on the risk assessment team’s evaluation, but in the range of 3.5%.
But that fee is just for AMEX. You also need to pay your merchant account provider and/or gateway some fees as well. I looked at Braintree and they currently don’t have fees for American Express, but it is in beta here and it may change. This is because American Express’s business model is different from Visa and MasterCard. The model is they don’t do revenue sharing on their 3.5% to merchant account providers like Braintree or Stripe. They insist they keep all the money and that it is a “privilege” for the merchant account to have a relationship with them. Something like this. So this makes merchant accounts a bit reluctant to accept them, because they don’t make any, or just a flat fee per transaction, on American Express transactions.
Some Merchant Accounts You Simply Can’t Integrate Amex
So other merchant accounts simply can’t process American Express, even if you get a direct account with Amex. Not sure why, maybe a technical reason, or maybe a business reason? I don’t think there is any other way to accept Amex then without a merchant account who supports it.
Why? Because the Amex account itself isn’t a processor. They can’t securely capture the customer’s credit card information and pass it to Amex for processing. That is what your merchant gateway does, and they would just add in Amex as one of the “channels” or cards that it can process.
While it may be technical, I have a feeling it is a business reason. From what I mentioned earlier, American Express doesn’t seem to be willing to share any of its fees with third parties. Therefore some of these merchant gateways just say, “fine, we won’t support Amex at all then”. Guess this is a business decision that makes our life, as a merchant, more of a headache.
Paypal Accepts American Express By Default
So we have a full guide on Paypal HK here. Another cool thing about them is you don’t need any complicated applications. You just setup the buy now button on your site and you’re done. The customer can checkout without having a Paypal account and put in their American Express card (the same as any of the cards Paypal supports).
Some have said then why doesn’t Braintree support American Express? That’s because Paypal recently bought Braintree. Maybe it just takes time after the merger and all the integrations and programming. Let’s hope so – as it is a bit of a hassle.
Stripe Also Supports American Express Out of the Gate
And good ol’ Stripe – they accept American Express without you needing to apply for a separate account with Amex. Guess this is why so many people are begging them to open up in Hong Kong.
Yet as of the time I write this, they’re still not in Hong Kong – but am told it was a 2015 event so maybe just a little bit behind schedule.
So for those people with companies in other countries, if you have Stripe you can collect American Express and skip this article (too bad you had to read all of this post to find that out!)
What Is Your Experience Receiving American Express?
So now it’s your turn. People love leaving comments about their experience with finding the right merchant account. Let’s help each other. I tried my best to cover every angle of this American Express “wrestle” and maybe in a year or two this post will be irrelevant!
But for now, it is a problem so let’s all put our hands together and help one another out. The first step, which is an easy one, is to leave a comment below with your tip or feedback!
To our mutual global business success!