1 year of business swipes; V/MC/AX/DISC data:

[14Fiesta]

I compiled all the data given for the restaurants owned by BBS and KIB and organized them in a spreadsheet.

It's clear that while Visa does take the cake for most transactions and $ spent, Amex lives up to their reputation of having cardholders that spend the most money. Guess it really is worth those "higher" transaction fees 

[IgnatiusReilly]

Both great data posts!

20 years ago when I worked for AmEx, Merchant Services (the guys who sold accepting AmEx) had a McKinsey study showing that our customers spent more than V/MC customers and that was why it made sense to accept a card with a higher discount fee.  Some of this data bears that out but I am sure the low utility (lack of usage) bothers AmEx.  

I have AmEx cards and no animus toward them but I have to wonder if Millenials give a **bleep** about any "prestige" AmEx used to have.  I really wonder how AmEx will relate to younger demographics.  Thus far the answer seems to be: not well.  

I will say that my BCP gets its category usage but my PRG is used rarely.  Chase gets 90% of my spend now.  And I am a "at the very end of the Baby Boomer" guy.  

[Anonymous]

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@Anonymous wrote:

I think the reason why most of them are visa is because in upstate NY, at least from what I've seen, people tend to be poorer and not have good jobs, and lousier credit therefore not enabling them to qualify for premium charge cards like amex etc.

Also, is your profit high on that 4M or not. Restaurants are by far the hardest business out there to make money with. Had many friends lose EVERYTHING over the years due to not doing well with franchised and non-franchises restaurants.

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I'm not in a poor area of NY.  While I said "upstate NY" where I live is only about an hour and a half north of NYC which is considered by most people in NYS to be downstate for the most part.  People living in NYC would consider me "upstate" but the vast majority of the state wouldn't as I can travel 3 hours north and still be in NY and I'm a 6 hour drive to Buffalo, for example.  The area I live in is Dutchess County, which if you look at a map isn't far from Westchester County which is a very expensive area as many may be aware.

To answer your profitability question, for the year we hit 28% operating profit on those $4.1M in sales, so a little over $1.1 was left for the owners.  Restaurants are extremely hard to be profitable in though, no doubt and those margins are shrinking every year.  That $1.1M today would have easily been $1.8M in the late 90's, which makes it scary to think what will happen in another 20 years...

[Anonymous]

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@IgnatiusReilly wrote:

Both great data posts!

20 years ago when I worked for AmEx, Merchant Services (the guys who sold accepting AmEx) had a McKinsey study showing that our customers spent more than V/MC customers and that was why it made sense to accept a card with a higher discount fee.  Some of this data bears that out but I am sure the low utility (lack of usage) bothers AmEx.  

I have AmEx cards and no animus toward them but I have to wonder if Millenials give a **bleep** about any "prestige" AmEx used to have.  I really wonder how AmEx will relate to younger demographics.  Thus far the answer seems to be: not well.  

I will say that my BCP gets its category usage but my PRG is used rarely.  Chase gets 90% of my spend now.  And I am a "at the very end of the Baby Boomer" guy.  

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With the demise of the Costco-AmEx relationship I wouldn't be surprised if most places eventually stop accepting it.

[IgnatiusReilly]

which makes it scary to think what will happen in another 20 years...

I have friends who own a lot of McDonalds.  They are slowly migrating to kiosks to reduce labor costs and looking at the machines being developed to aid in if not entirely take over food prep.  As the minimum wage has gone up, it has hard to pass that cost on to consumers.  People will find alternatives when a Big Mac meal is $10.  

I have also noticed at casual dining (Appleby's as an example) one can order from a table-based tablet that runs ads (revuenue for the owner) and cuts out the need for some labor.  I agree, it will be interesting.

Maybe we all go retro and return to the Automat?

[IgnatiusReilly]

tmiw:

They are in a pickle.  When I was there, in the 90's, they really pushed CIF, cards in force, to show how merchants how many people carried AmEx.  (This was when they were not in the revolving market, post Optima debacle.)  So on the Corporate Card side, salespeople were paid on how many cards a particular company signed up for.  Bad idea. Yeah, it got cards out there but smart salespeople convinced companies to give cards to EVERYONE.  Receptionists, janitors, filing clerks,  The reps did very well but it did not increase charge volume.  So a couple years after that, we paid them on annual charge volume.  In the 90's the sales comp plan was changed at least every other year.  That was a real joy.  

Even then, AmEx had issues with utility...

It seems like they are in a rough patch and Chenault's heir, Ed Gilligan, a good guy, dying last year at 55 undoubtedly created some succession issues.  I hope they find their way but their "revamp" of the Plaitnum card was not encouraging.    

[Anonymous]

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@Anonymous wrote:

I've only banked at 4 places in my lifetime (Comerica, Bank of America, PNC and a Credit Union) and I've never noticed that they have all been Visa's. Do banks even do Mastercard debits?

The distance between Visa and Mastercard is pretty grand. Nice datapoints 

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My CU uses debit MasterCard. 

[longtimelurker]

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@IgnatiusReilly wrote:

I have AmEx cards and no animus toward them but I have to wonder if Millenials give a **bleep** about any "prestige" AmEx used to have.  I really wonder how AmEx will relate to younger demographics.  Thus far the answer seems to be: not well.  

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I've seen a few posts here over time where people want Amex cards, particularly the green one, because it's iconic, it's what their parents had (usually the father in those times!) etc    I suspect many of these people have a late generation smartphone though, rather than relying on the Princess or earlier models of the phones their parents had!    So I guess at least for those, Amex marketing was successful.,,,,

(Yes, I know that ccs haven't advanced at anything like the pace of telecomm....)

[Anonymous]

My altura cu is a mastercard debit

[redpat]

MC now has Capital one cards so 2017 should look a little different w/ one of the largest CCC switching from Visa.

If Chase did this I would think MC would lead.