American Express Pass-Through Transactions Explained
American Express pass-through transactions are Amex sales reported on a merchant processing statement even though American Express may separately control the pricing, settlement, funding or billing associated with those transactions.
These transactions can make statements confusing because the sales volume may appear on one statement while the related deposits or fees are handled through a separate American Express relationship.
What Are American Express Pass-Through Transactions?
American Express pass-through transactions are Amex payments that appear on a merchant processor’s statement for reporting or reconciliation purposes while some or all of the actual Amex settlement relationship is handled separately.
The merchant’s processor may transmit the transactions, include the sales volume in statement totals or provide reporting, but American Express may separately determine the discount rate, deduct fees or fund the merchant.
Depending on the merchant’s setup, the processor may also charge additional authorization, gateway, transaction or service fees connected to those Amex payments.
Plain-English Definition
The processor is showing American Express activity on its statement, but Amex may be handling some or all of the money and fees separately.
The merchant may therefore need more than one statement or report to understand the full cost of accepting American Express.
How American Express Pass-Through Processing Works
Customer Uses American Express
The merchant accepts an American Express card through a terminal, website, virtual terminal, invoice or integrated payment system.
Processor or Gateway Routes the Payment
The merchant’s processor or gateway transmits the authorization and transaction information.
Amex Handles the Relationship
American Express may control the merchant pricing, settlement, funding or fee deduction.
Activity Appears on Multiple Reports
The merchant may see Amex sales on the processor statement while deposits or fees appear elsewhere.
How Amex Pass-Through Transactions May Appear
Transaction Descriptions
- Amex Pass-Through
- American Express Pass-Through
- Amex Transactions
- Amex Sales
- American Express Volume
Funding Descriptions
- Funded by American Express
- Amex Funded Separately
- Separate Amex Settlement
- Third-Party Amex Funding
- Net Settlement by Amex
Fee Descriptions
- Amex Authorization Fee
- Amex Transaction Fee
- Amex Processing Fee
- Amex Access Fee
- Amex Service Fee
Pass-Through Reporting vs. Direct Processing
| Feature | Amex Pass-Through | Amex Processed With Other Card Brands |
|---|---|---|
| Statement reporting | May appear on processor and Amex reports | Usually appears primarily on the processor statement |
| Funding | May be deposited separately by American Express | May be included with other processor deposits |
| Pricing | May be controlled through a separate Amex agreement | May be included in the processor’s pricing arrangement |
| Processor fees | Processor may still charge authorization or transaction fees | Processor fees may be bundled with other card-brand activity |
| Reconciliation | Often requires multiple reports and deposit records | May be easier to reconcile through one statement |
What Fees May Apply to Amex Pass-Through Transactions?
American Express Pricing
- Amex discount rate
- Amex transaction pricing
- Industry-based pricing
- Card-product pricing
- Cross-border charges
Processor Charges
- Authorization fee
- Transaction fee
- Gateway fee
- Statement or reporting fee
- Processor markup
Technology Charges
- Gateway transaction fee
- Virtual terminal fee
- Software transaction fee
- Tokenization fee
- Fraud-screening fee
“Pass-Through” Does Not Always Mean No Markup
The term may simply describe how the transaction is reported or funded. Merchants should not assume that every related charge is a direct cost from American Express.
Processor-controlled fees, gateway charges and technology markup may still apply.
Why Amex Costs Can Be Easy to Understate
Separate Fee Reports
The processor statement may not show the full American Express discount cost.
Net Deposits
Fees may be deducted before the Amex deposit reaches the merchant’s bank account.
Processor Add-On Fees
Separate processor transaction or authorization fees may be overlooked.
Technology Fees
Gateway and software charges may be billed on an entirely different invoice.
Different Reporting Periods
Sales, fees and deposits may fall into different statement cycles.
Incomplete Effective Rate
Amex volume may be included in sales while some Amex fees are omitted from the cost calculation.
How Separate Amex Fees Affect the True Processing Cost
Example
Assume the processor statement reports:
Processor Statement Fees: $11,000
Based only on the processor statement, the apparent effective rate is:
But assume American Express separately deducted another $2,500 in fees:
The merchant’s actual effective rate is 0.50 percentage points higher than the processor statement alone appears to show.
How to Reconcile American Express Pass-Through Transactions
Documents to Review
- Primary processor statement
- American Express statement or report
- Gateway statement or invoice
- Software-provider invoice
- Settlement reports
- Bank deposit records
- Signed processor agreement
- American Express pricing agreement
Items to Match
- Total Amex sales volume
- Number of Amex transactions
- Refunds and credits
- Chargebacks and adjustments
- Gross settlement amount
- Fees deducted before funding
- Net deposit amount
- Processor and gateway fees
Do Not Calculate Amex Cost From One Statement Alone
When American Express is funded or billed separately, the processor statement may show the sales volume without showing every related fee.
The true cost can only be determined after all Amex, processor, gateway and software charges are combined.
Common Amex Pass-Through Problems
Incorrect Sales Volume
The Amex volume reported by the processor does not match American Express settlement records.
Duplicate Transaction Fees
Both the processor and another provider charge a fee connected to the same Amex transaction.
Hidden Processor Markup
Processor-controlled charges are described in a way that makes them appear to come directly from American Express.
Missing Deposits
Separately funded transactions are delayed, short-funded or difficult to match.
Incorrect Transaction Counts
Declines, retries, refunds or duplicate attempts may be included in billed quantities.
Incomplete Effective Rate
The merchant calculates processing cost without including separately deducted Amex fees.
How to Audit American Express Pass-Through Transactions
1. Identify the Amex Relationship
Determine whether American Express pricing and funding are handled directly, through the processor or through another arrangement.
2. Collect All Reports
Obtain processor statements, Amex reports, gateway invoices and bank deposits.
3. Match Sales Volume
Compare Amex transaction totals across every reporting source.
4. Reconcile Deposits
Confirm that gross sales, deducted fees and net deposits balance.
5. Identify Every Related Fee
Separate Amex pricing from processor, gateway and software charges.
6. Calculate the True Effective Rate
Include every Amex-related cost, regardless of where it is billed.
Questions to Ask About Amex Pass-Through Transactions
- Who controls our American Express pricing?
- Who funds our Amex deposits?
- Where are Amex fees reported?
- Does the processor charge an Amex transaction fee?
- Does the gateway charge separately for Amex?
- Are declined Amex attempts charged?
- Are processor fees added to Amex pricing?
- Are any Amex charges marked up?
- Why is Amex volume shown as pass-through?
- Do reported sales match funded transactions?
- Are fees deducted before deposit?
- What is our true Amex effective rate?
Ask for the Complete Amex Cost
A provider should be able to identify every American Express cost, including direct Amex pricing, processor charges, gateway fees and software-related fees.
A partial answer does not provide the merchant’s true cost of acceptance.
American Express Pass-Through FAQ
What are American Express pass-through transactions?
They are Amex transactions reported by a merchant’s processor even though some or all of the pricing, settlement, funding or billing may be handled separately.
Why does Amex appear as pass-through on my statement?
The processor may transmit or report the transactions while American Express separately controls the merchant relationship, settlement or funding.
Are Amex pass-through transactions funded separately?
They may be. Some merchants receive separate American Express deposits rather than having Amex sales combined with Visa, Mastercard and Discover funding.
Does pass-through mean there is no processor markup?
No. The processor may still charge authorization, transaction, gateway, service or reporting fees.
Why do I have both Amex fees and processor fees?
American Express and the processor may perform different functions, allowing both companies to charge fees connected to the same transaction.
Can my gateway charge separately for Amex transactions?
Yes. A gateway may charge a transaction or authorization fee each time it transmits an Amex payment.
Can Amex fees be deducted before funding?
Yes. American Express may deduct fees from gross settlement before sending the net deposit to the merchant.
How do I calculate my true Amex effective rate?
Add all Amex, processor, gateway and software fees related to American Express, then divide the total by the Amex sales volume.
Can Amex pass-through transactions create duplicate fees?
Yes. Multiple providers may charge transaction-related fees, so every charge should be identified and verified.
Why does my processor statement show Amex sales but not all Amex fees?
The processor may report Amex activity while American Express separately bills or deducts its fees.
How do I reconcile Amex deposits?
Compare Amex sales reports, settlement reports, deducted fees and bank deposits for the same reporting period.
How can weAudit help?
weAudit reviews processor statements, American Express reports, gateway charges and deposit records to identify the complete cost of accepting Amex.
Related Merchant Processing Pages
About weAudit
Educational content provided by weAudit.com, America’s #1 Credit Card Processing Audit Firm. Since 2009, we have helped businesses uncover hidden fees, verify pricing accuracy, negotiate fair processing agreements and protect their profits through independent merchant processing audits. Unlike credit card processors and sales organizations, we work exclusively for merchants. Protecting Merchants’ Profits Since 2009.
Do You Know the True Cost of Accepting American Express?
weAudit reviews processor statements, American Express reports, gateway charges, software fees and deposits to identify hidden markup, duplicate charges and costs that may not appear on your primary merchant statement.
No processor switch required. No percentage of savings. Independent, confidential statement review.