American Express Trainwreck

Since the launch of Apple Pay in the UK, there has been a new focus on contactless payments and excited consumers are increasingly reaching for their iPhone whenever they see the contactless logo. Along with contactless payments, Apple Pay has also brought a new way for iOS users to make payments to retailers in apps without having to enter all their card details. However, American Express cardmembers who have added their cards to Apple Pay are quickly discovering that it’s not as quick and easy as they’d hoped; finding difficulties in many places that they expected their cards to work.

American Express in the UK

Despite the name, American Express cards are becoming increasingly popular in the UK. Retailer acceptance – especially with national chains – is excellent and many smaller businesses are seeing the benefits of ‘Saying Yes to American Express’ too. With American Express cards leading the market in card rewards, airmiles, and cashback, it’s no surprise that they’re the preferred plastic of many savvy consumers.

Even though acceptance is improving, cardmembers are used to the ocassional time when their card is not accepted, and tend to have a backup. With the launch of Apple Pay, however, cardmembers are facing a renewed challenge and discovering that there’s more to the puzzle than a retailer simply accepting American Express.

Contactless Acceptance

One would expect that any retailer accepting American Express that has working contactless readers would accept your American Express card for contactless transactions. This is, unfortauntely, not the case.

Large retailers such as Starbucks and IKEA accept American Express and have invested in the technology to accept contactless payments. Hover an American Express card over their contactless readers, however, and you’ll get the all too familiar double beep of failure, and a message to insert your card. Your Chip and PIN transaction will work just fine.

This problem seems widespread. Before starting this blog I was only aware of Starbucks having this issue. As I’ve tried more and more retailers, there are a staggering number who have not configured their hardware properly to work with American Express ExpressPay (their name for contactless).

It’s unclear whose fault this is. Do retailers simply not want to accept Amex via contactless? It seems strange that this would be the case, with companies like Starbucks eager to take payment in any way that’s convenient for the customer. It seems unlikely to be an oversight, as the problem has existed for years.

It also seems unlikely that the problem is the fault of American Express themselves; they’d surely be keen for their cardmembers (who often pay a sizeable annual fee to use the card) to have the best experience possible.

Visa and Mastercard each have slightly different standards for contactless; payWave and PayPass respectively, however all retailers seem to work with these popular card schemes - every time.

Apple Pay Acceptance

Apple and American Express have said in press releases that you can use Apple Pay anywhere you see the contactless acceptance mark. This makes a lot of sense, as the technology is the same. Theoretically this puts the UK ahead of the US as we already have a significant contactless infrustructure.

Despite all of the issues with American Express contactless, at least cardmembers can be assured that they can use their iPhone to pay anywhere they’d normally use their contactless American Express card… actually, no!

Incredibly, some retailers who accept American Express contactless do not accept American Express via Apple Pay. These aren’t small retailers either, with many branches of big chains like McDonald’s and Co-operative Food having the issue.

Even more incredibly Post Office, who are one of very few retailers featured on the American Express Apple Pay web page, also seem to be having widespread problems, though not in all branches.

In-App Payments with Apple Pay

One of the great features of Apple Pay is the ability to securely pay for physical goods in apps on your iPhone or iPad. With this system, consumers don’t need to make an account, enter all of their details, or trust their credit card information to companies they may not trust, or want to use again in the future.

For some reason American Express have decided not to enable this feature for their cardmembers, instead advising that the feature launches with iOS 9. Not only are they arbitrarily holding this back, but they are also implying that the feature is unavailable to anyone until the launch of iOS 9, as if the service is part of the forthcoming iOS update.

The implications

American Express should be worried about this, and should be focussing their efforts on fixing the issue. I spoke earlier about being unsure who was at fault, but in reality it doesn’t matter. It reflects badly on American Express, and they should be trying to fix it.

I would suggest that they should have a small team of people who are tasked with collecting reports from cardmembers and liasing with retailers to ensure that each problem is fixed.

They also need to provide a clearer message to their cardmembers, who have been active on Twitter letting the @AskAmexUK team know there are problems. Despite this being a well-known issue, the Twitter team are offering contradictory and varied advice to users. Some say that not all retailers accept American Express contactless (even when the retailer in question does); some advise looking at their Apple Pay FAQ’s (which don’t answer the question at all); while others actually acknowledge the issue but without indicating when or if it wil be resolved.

I have already chosen to use my Visa card instead of my American Express card for some contactless and Apple Pay transactions, even when I know the retailer accepts American Express - I simply don’t want the hassle & embarassment. My partner has replaced the Amex with another card as the default in Passbook - something issuing banks were fighting for when Apple Pay launched in the US.

If American Express aren’t careful, more cardmembers will do the same and forfeit the rewards offered by Amex in exchange for the confidence of using a card that always works.