# Amex
Foreign Exchange Risk
\
Foreign exchange exposures arise in four principal ways:
(1) Card Member spending in currencies that are not the billing currency,
\
(2) cross-currency transactions and balances from our funding activities, \
(3) cross-currency investing activities, such as in the
equity of foreign subsidiaries, and \
(4) revenues generated and expenses incurred in foreign currencies, which impact earnings.
These foreign exchange risks are managed primarily by entering into foreign exchange spot transactions or hedged with foreign
exchange forward contracts when the hedge costs are economically justified and in notional amounts designed to offset pretax
impacts from currency movements in the period in which they occur.
PROBLEM
Payment cannot occur until the Transactions are submitted. Submitting Transactions daily is
encouraged even though the Merchant has up to seven (7) days to do so.
Payments cannot occur until the Transactions are Submitted, received, and processed by us.
\
Depending on the business model, the Transactions will be Submitted directly to us or through
\
your Processor.
In many cases, a Merchant’s POS System automatically processes the Transactions in Batches
\
at the end of the day.
On busy days, a Merchant’s Transaction volume may be greater than its POS System’s storage
\
capability. Merchants should work with their Terminal Provider to determine storage capacity,
\
then determine if Transactions will need to be submitted more than once each day (e.g., submit
\
a Batch at mid-day and again in the evening)
12.2.1 Card Acceptance Discount Fees\
12.2.2 Authorization Fees\
12.2.3 Submission and Settlement Fees
Amex forbids Dynamic Currency Conversion on its payment network which to me is a key positive differentiating factor vs Visa and MasterCard.
SOLUTION
Stablecoin RTGS for no read fees , programmatic merchant charge submission.
Closed-Loop Network
FLOW
* Cardmember pays Merchant with Amex card
* Merchant requests Authorization from Amex
* Merchant submits Charge for Settlement
* Amex settles net USD to Merchant
* Cardmember later receives billing statement
* If issue, dispute case is opened
COUNTERPARTIES
Cardholder \
Merchant \
USD \
American Express Network
PREPAID DEBIT
1. Amex holds $10 prefunded account for Cardholder
2. Cardholder initiates $5 payment
3. Amex debits $5 from Cardholder account
4. Amex credits $5 to Merchant account
5. Merchant receives settled USD
***
RESOURCES
[Amex Merchant Reference Guide Canada April 2021](https://www.americanexpress.com/content/dam/amex/ca/en/merchant/pdfs/CAN_RefGuide_Apr2021_FINAL_EN_20210324.pdf)
[Amex to pay $230M to settle deceptive marketing, fraud probes](https://subscriber.politicopro.com/article/2025/01/amex-to-pay-230m-to-settle-deceptive-marketing-fraud-probes-00198831)
[American Express 2024 Annual Report](https://s26.q4cdn.com/747928648/files/doc_financials/2024/ar/v2/American-Express-2024-Annual-Report.pdf)
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