AmEx expects growth spurt from T-2 markets as it expands footprint

As rising incomes change consumption patterns and a new breed of affluent class is dominating demand, world payments systems giant American Express is gung-ho about India, especially tier II cities.

According Manoj Adlakha, CEO, American Express Banking Corporation, India , many of the cities where Amex has witnessed growth are tier 2 cities like Hyderabad, Pune, Surat, Ahmedabad, Vadodara, Indore, Coimbatore, Jaipur and Chandigarh.

Taking its cue, the world’s largest credit card firm is focusing on these markets and is banking on the next growth spurt to come from them. “We have seen significant growth on our new card acquisition and billings from cities like Hyderabad, Kolkata, Pune, and Coimbatore,” said Adlakha to Express.

The card issuer is currently present in 14 cities in the country, with Delhi, Mumbai, Bengaluru, and Chennai being its traditional key markets. It has also been expanding geographically to look at markets like Ahmedabad, Surat, Vadodara, Indore, Chandigarh, Jaipur, Pune, Kolkata, Hyderabad and Coimbatore.

According to RBI data, American Express card members spend on an average five times more than non-AmEx cardholders. AmEx’s plans for India gain significance as the Indian market is undergoing an evolution. According to KPMG-FICCI’s 2015 report, India is expected to become the world’s fifth largest consumer market by 2030 with a five-fold projected rise in absolute consumer spending. Additionally, exponential growth in the e-commerce space has prompted a surge in digital payments.

This provides the firm with ample opportunities to increase penetration online as well as offline. Today India is the fastest-growing online payments market for American Express.

“We want to be where are customers are. We have the largest integrated global payments platform. We bring together users, card members, and merchants, and the data is incredibly valuable. We know where they spend online and offline. We want to deliver benefits and services when our card members want it, where, and how they want it,” Adlakha pointed out.

“We already have good coverage in the South. About 85 per cent of our card member needs are met by our wide merchant network. Having said that, we are working towards further expanding our coverage and acceptance net. In Bengaluru all the major fine dining restaurants, leading retailers, supermarkets and hypermarkets are part of our network,” he added.

At the end of March, 2016, AmEx had issued 837,960 cards. According to data from the RBI, credit card transactions at

POS (points of sale) in March 2016 saw transactions worth about Rs 2,797.06 crore, with the number of transactions a little less than 3.3 million.