“American Express is at the forefront of digitalisation, providing customers and merchants with ease and convenience. Most of our terminals are also contactless-enabled,” says Anurag Gupta, Vice President and Head of Global Merchant & Network Services at American Express. In an interview with Navneet Dubey of BT Money Today, Gupta explains how they are innovating and working with fintech firms and merchant partners to improve customers’ payment journey. Edited excerpts:
BT: With the increasing digitalisation trend, how does American Express aid merchants in adopting and utilising contactless payment methods?
AG: American Express leads digital transformation, offering customers and merchants seamless convenience. Most of our terminals also support contactless payments for added ease of use. Some ways in which we are adopting new payment methods are:
• PayByLink: Payment capability through an SMS or email link to support small and medium-sized businesses.
• Contactless: Increased penetration of contactless PoS from 50% to 80% of the base.
• Tap & Pay: Tap & Pay is a capability on Amex Terminals whereby card members can pay for transactions above Rs 5000 with a PIN by tapping on the terminal.
• SoFT PoS: Use the merchants’ Android devices as a certified payment terminal. The card can be tapped on the NFC-enabled Android phone of the merchant to do the transaction.
We are continuously innovating and working with fintechs and merchant partners to improve customer payment journeys, leading to enhanced shopping experience.
BT: What are some collaborations Amex has done with merchants to enhance the overall payment experience?
AG: American Express works closely with its merchant partners to enhance the overall payment experience. We have evolved our merchant partnerships beyond just acceptance. This is done by providing merchants with best-in-class offers and marketing opportunities, providing access to our high-spending card members, strategic tie-ups for business growth, increase in payment options, and providing competition and business analytics and insights for business growth.
BT: How does this value proposition differentiate American Express from other payment service providers?
AG: In a market saturated with various credit card options, each catering to different consumer needs and preferences, the ability to stand out through a unique and compelling value proposition is a strategic imperative for American Express.
We work closely with our merchant partners and have strong support and service systems. This helps us ensure that any challenges or issues are quickly resolved and that our merchants access new and innovative offers and marketing opportunities.
The strength of Amex is the closed-loop network, which gives us a wealth of data. We issue cards and are also a network and an acquirer, so we have valuable insights into card member behaviour and preferences. We can provide merchants with information on lean / most profitable periods for their business, the demographics of customers, and high-spender characteristics - information they can use to increase sales.
BT: Are there any targeted programs or initiatives to assist these merchants in their growth?
AG: We have developed specific programs to increase acceptance in everyday spending categories and improve the payment experience for our card members and merchants. We offer best-in-class fraud protection using our closed-loop advantage and insights.
We work closely with small businesses, providing marketing support, valuable offers, and assistance expanding their reach. Whether offline or online, we support merchants in reaching more customers and contribute to their growth journey through various campaigns, offers, and channel expansion.
BT: What strategies do American Express employ to ensure effective outreach to merchants at the grassroots level?
AG: The evolution of financial services has prompted credit card companies to adopt comprehensive strategies to connect with merchants in local communities, fostering mutually beneficial relationships. American Express employs a mix of direct signing and partner channels, ensuring coverage across India. Strategic bank partnerships with key players and fintech partners expand our offline and online coverage. This comprehensive approach helps us reach merchants at the grassroots and provide them with the necessary tools for success.
BT: Can you share some key strategies and initiatives that American Express has implemented to foster the growth of the Global Merchant Services business in India?
AG: The Global Merchant Services (GMS) division of American Express manages Amex acceptance with millions of merchants globally who accept American Express Cards. GMS is pivotal in American Express’s broader business strategy, spearheading the growth of Card acceptance across diverse channels. American Express aims to aggressively sign up more merchants, increase coverage and address demographic and geographic shifts. Expanding coverage in Tier 2 and Tier 3 cities is also a priority to tap into new opportunities. While continuing to focus on travel and entertainment, we are strategically shifting attention to everyday spending categories like supermarkets, dining, fuel, retail, healthcare, and departmental stores. The goal is to meet the evolving needs of card members while supporting our merchant partners.
Also read: Mutual funds versus fixed deposits: Where should you invest?
Also read: ITR 2024: Last-minute income tax-related hacks for more money in hand
Also read: I'm 45 and plan to invest Rs 25 lakh for 5 years. Where should I invest?
BT: What factors contribute to American Express premium card members generating value for partners through increased transaction sizes?
AG: With their higher disposable incomes and willingness to buy premium products and services, premium card members drive higher transaction sizes. Their purchasing power and the value proposition offered by American Express premium cards lead to more substantial transactions. The perks associated with premium cards, such as rewards, travel benefits, and access to exclusive events, incentivise larger transactions. These offers include 10X reward points for premium merchants, best-in-class hotel rewards, super dining offers across thousands of places, and exclusive offers at airlines / online travel agencies and luxury retail outlets.
BT: What are some recent additions to your portfolio in terms of new merchant signings?
AG: Some of our recent merchant signings include duty-free shops at new international airports, cab transport, upcoming tourist locations, hospitals, regional supermarkets, and educational institutes. These additions demonstrate our ongoing efforts to increase coverage and acceptance across India, providing card members with diverse spending options.