[Nutcase]

The NAB Amex deal is a very smart piece of marketing and product management. As some of you have clearly stated, the RBA cut the interchange fees for Mastercard and Visa significantly (for personal cards) which has impacted the revenue base of the cards business for all banks in Australia.

As a way of clawing back some of this revenue, NAB, ANZ and Westpac decided to issue AMEX (and Diners club in the ANZ instance). Both AMEX and Diners are "closed" systems and do not rely on interchange for revenue. By issuing AMEX, NAB has been able to regain some of the lost interchange by sharing revenue with AMEX. AMEX provide the payments system (not part of the RBA ruling) and NAB provide the credit, reporting and marketing.

The NAB Ant AMEX card is offering 2 points per dollar until mid year, when it reverts to 1 point per dollar. This is a significant advantage over all other cards in the market.

NAB is trying to placate its high spending customers who have been negatively impacted by the changes of the RBA. The watering down of Rewards programs was due to the changes referred to above. By using AMEX, NAB has sidestepped the interchange issue, and provided a product to its customers that is in demand.

Yes, Amex is not as widely accepted as Visa, however, as recent events in the USA have shown with a partnership between AMEX and Citibank, AMEX are very aggressive when it comes to Visa and Mastercard customers. It shouldnt be too long before Amex is almost as widely accepted as Visa/mastercard.

Hope this clarifies the situation