PayPal UK and Amex

We were recently shocked to learn that our payment provider (PayPal UK) is unable to process Amex cards for us.

Our subscription and 3 day pass services currently rely on PayPal UK Website Payments Pro for payment and collection of fees both by PayPal and credit card. We selected PayPal primarily as it supported “major credit cards” inlcluding Amex (or so we thought). PayPal UK acceptance logos and other documentation show Amex is supported for payment.

Customers Can’t Pay With Amex?

We received an email from one of our customers complaining that they were unable to pay for our service with Amex. The payment screen (hosted by PayPal) gave no clue as to why their Amex credit card was being declined. As far as our customer was concerned, there was nothing wrong with the card.

Amex in the UK? The Real Truth.

We were puzzled by the problem and undertook to investigate and resolve the billing problem. After many hours on the phone to PayPal and other payment providers we found that the situation is fairly unsatisfactory for merchants operating out of the UK.

The Problem with Amex in the UK

On phoning PayPal to investigate the reasons why we were unable to setup recurring payment in Virtual Terminal, we were told that PayPal does not support Amex for native (i.e. Non PayPal accounts) because of a “dispute” between PayPal UK and Amex over the high fees being charged by Amex. We were told that Amex support would be coming “soon” but no commitment of dates could be made.

We also found that Google Checkout (UK) does not support payment by Amex to UK merchants, presumably for the same reasons (fee) as PayPal.

PayPal UK + Amex = Lost Opportunity

Learning that PayPal UK did not support Amex has been a shock to us. Had it not been for the fact that a customer had taken the time to complain, we would have continued to be blissfully unaware that there was a problem at all. We would have happily carried on with PayPal but how many lost opportunities would we have no knowledge of as customers go to checkout but then have to abort as their Amex card cannot be processed.

Having researched the PayPal UK /Amex problem extensively, we believe that PayPal is not making it clear enough to merchants that Amex is not supported. It is indeed the case that much of PayPal’s own material (e.g. implementation guides and acceptance logos) leads one to the conclusion that Amex is supported. For example, on the PayPal payment screen for credit cards, there is even a drop down option for Amex which then does not work (no helpful errors, just “card declined” – Nice!).

Our findings certainly raise some interesting questions for anyone considering using PayPal as a viable payment provider if you are based in the UK and having international customers wanting to pay by Amex.

UK Merchant? Your (Limited) Options Exposed

So, PayPal and Google are out of the running if you need to accept Amex.

Your options seem to be fairly limited. We found some possibilities:

• Up sticks and move our business to the US (Yes, we seriously considered this)
• Open a US subsidiary, open a US PayPal account
• Tell our customers that they can’t use Amex (an absurd idea & not even an option)
• Use RBS WorldPay (who have not been exactly speedy answering our enquiry)
• Use our bank

Ultimately, we opted to use the merchant services provided by our business bank (HSBC). There are many hoops to jump through in terms of compliance, integration work (just what we need;)) and more fiery hoops with Amex UK (who need a separate application process and yet more integration work). On top of this is the added expense (setup fees and operating costs) but what can we do?

One thing is for sure though, when we complete the HSBC integration work, we will seriously look at dropping PayPal as a payment provider on the basis of:

a) It doesn’t make financial sense to maintain 2 providers

b) We feel let down by PayPal UK merchant services. Why can’t PayPal just be transparent and honest? Up until today, we would have recommended PayPal as a decent payment provider without hesitation. How things can change so quickly huh?