American Express credit cards will be rendered invalid in Cyprus and the rest of the European Union as of Sunday 31 March.
In an SMS sent out to card holders on Friday, the Bank of Cyprus (BoC) told 100,000 American Express holders that they will not be able to use their cards past March 31, 2019.
BoC had initially announced that it would stop issuing Amex cards following the US-based company’s decision to effectively pull out of Europe after changes to the EU’s banking regulations, while analysts hint that pressure from alternative payment methods may have played its own role in Amex’s decision.
A BoC source had told the Financial Mirror that the EU has decided on changes regarding regulations of the banking system, which no longer allows Amex’s model of exclusive cooperation with one bank in each country.
Amex had announced in the past that it would be discontinuing all of its bank licensing partnerships within the European Union due to regulatory developments in the EU.
Furthermore, the EU has decided to introduce a ceiling of 5% on charges applied for the use of any credit card but Amex fees are nearer 8% for Cyprus.
It is understood that in terms of costs, Amex will not be able to compete with Visa and Mastercard through cooperation with banks. So, American Express decided to abandon the model on which it was operating in Europe whereby it was granting exclusive cooperation to only one bank in each country. In Cyprus, this was Bank of Cyprus.
BoC clients holding American Express cards have to opportunity to switch to Mastercard or Visa cards.
“Those who have cards connected also to a Visa card, as Amex is not accepted in all parts of the world, will receive a Visa card. The rest are to receive a Mastercard,” the BoC source said.
Current holders of American Express cards should not be concerned over the switch and that the new cards will not be more expensive.
Meanwhile, Amex is to continue issuing its cards in large European countries directly to interested individuals, as it will no longer be cooperating with any banks.
Amex is to leave most European countries but will maintain a physical presence in large countries such as France.
