‘Owning premium segment is a strategic imperative for American Express’

India is clearly a growth market and it has been recognised by American Express globally and it has been identified as one of the strategic markets. We operate in 170 countries and India is right up there in the few markets identified as strategic. India has found its way into the top seven markets.

In the past 2-3 years, the journey has been one of building scale and within that our foray into online has substantially increased. Ninety per cent of our card members transact digitally. Today, one out of two transactions done with our products is online — 55 per cent, to be precise, is online. Online transactions contribute 55 per cent to our total number of transactions and 47 per cent to total value. Three years ago it was only 25 per cent. Eighty per cent of our customers have asked us not to send paper statements. So, that’s a fundamental change.

Earlier, what we used to do in the whole year, is what we do today in one month. That’s the kind of customers we acquire. Over the past 2-3 years, the number of new customers we are bringing into the franchise has increased significantly. In calendar year 2018, 60 per cent of all the new customers that we brought in were below the age of 35. So, we are also mindful of the fact that these are the people who are going to be the high spending consumers of tomorrow. As much as 45 per cent of all customers that we acquired in 2018 came in digitally.

We believe that the opportunity is so big, and the government is totally propagating less cash-- and that’s the word you use as cashless-- and it’s fuelling digital growth. Only 10 per cent of the payments are digital. So, there is enough headroom for all of us to grow. So, competition is really cash… . NITI Aayog had estimated that the total digital payments in India in calendar 2018 stood at about $330 billion. That number is expected to go to $1 trillion as an industry.

In India, the strategic imperatives are to own the premium segment, be essential to every customer we deal with, but definitely in the premium segment, and we would love to have a situation where aspirationally the premium customer should be holding an American Express card. So, our key focus is how do we make sure that our product offerings and services resonate with every premium prospect in India. We would also continue to focus on the millennial side while going deep on the premium segment. Besides expanding leadership in the premium consumer space, we want to build on our strong position in commercial payments. The whole idea is to make American Express an essential part of our customers’ lives.

We have already made significant inroads in this, but given the strategic importance, given the growth, the amount of spending opportunity that these customers have, and the brand resonates very well with them, it is just the right thing to do from a strategic imperative viewpoint. It is the right thing to go deeper and deeper into the segment and over a period of time have as much of their share as we can, both in terms of the number of customers and their share of wallet.

It is a journey we are on. We want the customer to, in all cases, decide where they want to spend and what they want to spend on.

Not only are more customers coming in, especially through digital medium, we have also substantially scaled up our merchant network. In the last two years alone, we have added 340,000 new merchant locations in India that warmly accept our cards.

We have expanded our base from 5 cities to 15 cities. Over the last five years, we have focused heavily on adding small merchants, including everyday spend categories onto our networks.

We have made great progress in expanding our merchant network in places such as retail, fuel stations, grocery stores, fast food restaurants and online merchants and solidifying a broader presence among small and mid-sized merchants across India is the next step.

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