Amex Shoots Down OptBlue Rumor

  • JJ Hornblass
  • August 11, 2016
  • 2

American Express today dispelled market rumors that it would expand its OptBlue program.

The program, launched in May 2014, allows merchants who charge less than $1 million a year through American Express, to use one of 18 merchant processors to secure a lower discount rate. Market participants tell Bank Innovation that demand for the program, which can save merchants around 70 basis points, in some cases, has been on the upswing.

nyfed-cards-by-score-lgThe rumor in the payments sector is that Amex will increase the threshold to $2 million to expand the scope of the program. But an Amex spokesman communicated to Bank Innovation that “we are not planning to change that criteria.”

OptBlue is interesting because it addresses a weakness in American Express’s business: card acceptance. It is generally smaller merchants that forgo accepting Amex cards, because the discount rate can be too high — perhaps 3.5% for merchants that don’t produce much annual Amex volume. That compares to discount rates for smaller merchants in the mid 2% range for MasterCard, Visa and Discover.

But OptBlue counters that weakness, opening Amex to more smaller merchants. Expanding the OptBlue charge threshold would bolster that effort.

Amex declined to share transaction volume through the program. Among the merchant processors supporting OptBlue are First Data, Heartland Payments Systems, TSYS and Vantiv.

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at or 212-564-8972.

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