Policy Change / the Gateway Access Fee:
Over the past year, Visa U.S.A., Inc. (“VISA”) and MasterCard International (“MasterCard”) started charging American Express transaction fees for any and all American Express Card authorizations that either the merchant (“You” or “Your”) or its third-party processor (“Processor”) route through the VISA or MasterCard processing gateways (“Gateways”) to American Express for authorization. To date, American Express has subsidized these transaction fees, and will continue to do so through March 31, 2003.
Beginning April 1, 2003, subject to specific rules set forth below, you may be charged a “Gateway Access Fee.” The fee is the exact same fee charged to American Express by Visa and/or MasterCard.
Will You Be Charged the Gateway Access Fee?
You will be impacted if 50% or more of your American Express Card authorizations for a particular merchant account number (“SE#”) are routed through the Gateways within a given month. In this case, we will simply pass on the VISA/MasterCard access fee to your merchant account for those transactions that pass through these Gateways.
American Express will monitor your processing activity on a SE#-bySE# basis. If you have multiple SE#s, such as a chain, and only some of the SE# use the Gateways, then you will only be assessed the Gateway Access Fee for those SE#s that use the Gateways for routing 50% or more of the American Express Card authorizations within a given month. The measurement is made at the individual SE# level. Therefore, you may incur Gateway Access Fees for some SE#s, but not for others.
You will not be impacted if less than 50% of your American Express Card authorizations through an SE# are routed through the Gateways within a given month. In this case, American Express will subsidize the fees charged by VISA and/or MasterCard.
All Gateway Access Fees will be charged to your merchant account and will be clearly reflected on your monthly account statements.
How Can You Avoid the Fee?
American Express urges you to take advantage of one of the following alternatives to avoid being assessed the Gateway Access Fee. Here are you options:
A. Route Authorizations Directly to American Express to Avoid the Gateway Access Fee:
Plural Interface Processing (PIP) — Your point-of-sale (POS) terminal/software may be capable of being programmed to dial direct to American Express for authorizations and settlement.
Split-Dial Authorizations — Your POS terminal/software may be capable of being programmed to dial direct to American Express for authorizations, but settlement would continue through your Processor.
Direct Connection — If you businessdoes 200,000 American Express authorizations and settlements combines on an annual basis, then it may be more cost effective for you to establish a direct connection to American Express for all American Express business. To discuss this option, please contact your American Express business. To discuss this option, please contact your American Express Representative or call our toll-free American Express Representative or call our toll-free merchant services number at 1-800-528-5200.
B. Contact/Change Your Processor:
Cease Processing Through the Gateways — Your Processor has full control over how your American Express Card transactions are directed to American Express for authorization. Accordingly, you should instruct your Processor to immediately cease processing your American Express Card authorizations through the Gateways and process American Express Card authorizations through alternative means, such as routing your American Express authorizations through the Processor’s direct connection to American Express.
Consider Alternative Processors — You may want to change your Processor. The Gateway Access Fee will not be assessed on transactions that flow through third-party processors that do not utilize the VISA/MasterCard Gateways to route American Express authorizations. For a complete list of the more than 50 such third-party processors, please contact your American Express Representative or call our toll-free merchant services number at 1-800-528-5200.