⚠ Surcharging Puts a Price Tag on the CardModerate threat

The discount rate is only safe while the cardholder never sees it. Surcharging breaks that. In its 2025 annual report Amex wrote: "In jurisdictions allowing surcharging, we have seen an increase in merchant surcharging on American Express cards, particularly in certain merchant categories"¹.

A surcharge turns the merchant's cost into the cardholder's cost at the moment of payment. A customer who sees an extra charge for Amex and none for a Visa card has a reason to reach for the other card in the wallet, and many Amex cardholders carry one. The merchant then gets the sale at a lower fee without refusing anyone.

Amex has already lost two network markets to regulation. It exited its network business in the European Union and in Australia "as a result of regulation in those jurisdictions"², and the Australian central bank opened a consultation in July 2025 on removing surcharging on designated networks³. That last proposal would help Amex if it removed surcharges only on the regulated networks; it would hurt if the rule treated all cards alike.

The danger is gradual. Surcharges appear first in the categories where margins are thinnest and card fees matter most, and they rarely go away once customers have accepted them.

Amex does not disclose how much of its billed business now carries a surcharge. The number that would reveal the damage is the one it does disclose: discount revenue as a share of billed business, 2.24% in 2025⁴. If it fell faster in the markets that allow surcharging than elsewhere, the cardholder would have started to pay the merchant's fee, and the premium would be under pressure from both sides of the counter.